Asia Cement (China) Holdings Corp (亞洲水泥中國控股), the Chinese unit of the Taiwan producer, rose as much as 62 percent in its trading debut in Hong Kong, buoyed by anticipated demand after the earthquake in China last week.
The stock gained 44 percent to HK$7.15 at the 12:30pm break on the Hong Kong stock exchange. The company sold 375 million shares at HK$4.95 each in an initial public offering, a statement said, raising HK$1.86 billion (US$238 million).
The unit, whose profit almost tripled last year, resumed shipping and production at its factory near the epicenter of the May 12 earthquake in Sichuan Province after a three-day shutdown. Demand will rise with reconstruction efforts, a company executive said.
“We’ll have a hard time to keep pace” with cement demand, Douglas Hsu (徐旭東), chairman of Asian Cement Corp (亞泥), parent of the Hong Kong-listed company, said yesterday. “There’s a lot of construction waiting to be built in the region.”
The affected factory, 100km from the epicenter of the tremor, has an annual capacity of 2 million tonnes, about a fifth of total production. The unit will add two kilns a year to double capacity to 20 million tonnes by 2011, Hsu said.
Asia Cement would use part of the share sale proceeds to acquire rivals in China, Hsu said. Rising raw costs will have minimal effect on earnings, he said.
“We always have a reserve capacity of coal and other materials for two to three months,” he said.