Shares in Hebei-based Great Wall Motors rose 3.2 per cent yesterday after the carmarker finally filed a listing document to Beijing regulators for its long-planned Shanghai share sale.
Great Wall, the mainland's biggest home-grown manufacturer of popular SUVs, said it would to sell up to 304.2 million A shares to fund a host of new investments in production capacity totalling 3.17 billion yuan (HK$3.82 billion).
The Shanghai offering has not been priced and still needs approval from the China Securities Regulatory Commission. But yesterday's closing price of HK$12.14 apiece for the company's Hong Kong-traded H shares implies Great Wall could raise something in the neighbourhood of HK$3.7 billion in a Shanghai offering.
Great Wall has been announcing on-again, off-again plans for a Shanghai listing since 2004, and finally secured approval from Hong Kong shareholders to proceed with the deal in November.
Rival mainland carmaker BYD Auto, backed by Warren Buffett, raised 1.42 billion yuan in June by listing 79 million A shares on the Shenzhen stock market.
The proceeds were about 35 per cent less than the maximum amount that BYD had initially sought to raise. But the firm's shares rose as much as 46 per cent on their June 30 trading debut.
Two weeks later, BYD announced that net profit for the first six months of the year probably fell by as much as 95 per cent, to between 121.06 million yuan and 363.18 million yuan. That represents a decline of 85 to 95 per cent from the 2.42 billion yuan profit the company booked in the same period a year earlier.