China Railway Materials Co (中國鐵路物資), a state-owned logistics firm and steel supplier, aims to raise as much as 6 billion yuan (US$943 million) selling shares in Shanghai to fund expansion.
The Beijing-based company will probably sell no more than 2.77 billion shares in Shanghai, according to a prospectus posted on the China Securities Regulatory Commission’s Web site. It may also offer as many as 1.44 billion shares in Hong Kong, including any over-allotment, the company said.
Proceeds from the Shanghai sale will go mainly to expand the company’s domestic logistic bases and operating networks and to replenish working capital. Funds raised in the Hong Kong offering, which is subject to regulatory approval, market conditions and investor confidence, will be used to set up overseas outlets, repay bank loans and boost capital, according to the prospectus.
Selling shares may be a challenge in a market where investor appetite has weakened amid Europe’s debt crisis and China’s economic slowdown. Initial public offerings on the Shanghai and Shenzhen bourses in the first half of the year raised 77.5 billion yuan, PriceWaterhouseCoopers said this month. That compares with 286.1 billion yuan in all of last year, the auditing firm said, which forecast 200 to 250 billion yuan worth of China Railway share sales this year.
China Railway Materials highlighted risks, including uncertainties about investment in China’s railway industry, slowing demand for steel and competition, according to the prospectus. The company boosted profit 47 percent to 1 billion yuan on revenue of 207 billion yuan last year, according to the prospectus.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
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