Fri, Dec 27, 2019 - Page 10 News List

Chinese high-speed rail firm launches IPO

MORE OPENING UP?The listing, approved in a record 23 days, added to indications that China is further opening up industries dominated by state-owned companies

Bloomberg

The operator of China’s high-speed rail line between Beijing and Shanghai began its initial public offering (IPO), which will for the first time allow investors to buy shares in what is the world’s largest such network.

Beijing-Shanghai High-Speed Railway Co (京滬高鐵), a unit of state-owned China Railway Corp (中國國家鐵路集團), plans to sell as many as 6.3 billion new shares, or 12.8 percent of its enlarged capital, through the listing in Shanghai, according to its prospectus released on Wednesday.

Book building for the IPO is to begin on Jan. 6, it said.

The company did not say how much it aimed to raise through the sale.

The listing adds to signs that China is pushing to further open industries dominated by state-owned companies.

Beijing on Sunday outlined plans to allow private-sector businesses to enter industries including energy, telecoms and rail, and on Tuesday, Chinese Premier Li Keqiang (李克強) pledged to give foreign investors greater access to service sectors, including finance and healthcare.

Those steps have come as a campaign to rein in China’s shadow banking industry has sapped financing for many non-state companies and the trade dispute with the US has led some multinationals to reassess their investments.

With economic growth at the slowest since the early 1990s, Beijing has sought to reassure these contingents and spur more capital spending.

Proceeds from Beijing-Shanghai High-Speed Railway’s IPO is to be used to help finance the acquisition of a 65.1 percent stake in a domestic railway operator for 50 billion yuan (US$7.1 billion), according to the prospectus.

The IPO was approved in a record 23 days by the country’s securities regulator.

China’s high-speed railway network, at 35,000km, is by far the world’s largest.

Beijing-Shanghai High-Speed Railway reported more than a 30 percent net margin for last year, with annual profit of 7.9 billion yuan, 9 billion yuan and 10 billion yuan for the past three years, its prospectus showed.

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