Railway firm CNR eyes global growth on back of Hong Kong IPO

Mainland railway equipment manufacturer China CNR says it aims to use its Hong Kong listing this month to expand overseas, but an analyst fears the market will not give the May 22 initial public offering an enthusiastic reception.

CNR and CSR Corp, both state-owned enterprises, are the world's biggest makers of railway equipment including high-speed trains.

CNR's strategy of expanding internationally was one of the reasons it chose to list on the main board of the Hong Kong stock exchange, company chairman Cui Dianguo said in Hong Kong yesterday. "We will build an international management team befitting our aim to be a first-tier global company," he said.

The Shanghai-listed firm aims to increase the proportion of its revenue derived from international sources from 7.8 per cent last year to 20 per cent in two or three years, Cui said.

CNR's overseas revenue fell 21.3 per cent to 7.58 billion yuan (HK$9.5 billion) last year.

"CNR's valuation is not high. It's a good stock, but the market atmosphere is not good, so I don't think it will receive much attention. However, the company's fundamentals are good," said Gary Wong, an analyst with Guotai Junan Securities.