Northeast China's Largest Oil Terminal Floats On Hong Kong Exchange

by Mary Swire, Tax-News.com, Hong Kong

13 April 2006

Dalian Port on Tuesday launched its US$277 million initial public offering on the Hong Kong Stock Exchange's main board.

The previously state-owned company has offered 840 'H' million shares, one third of the total, at HK$2.175 (US$0.28) to HK$2.575 each, representing a price-earnings ratio of between 15.09 and 17.87 times. UBS AG and BNP Paribas SA are joint bookrunners of the company's IPO.

According to reports, one third of the company's offering has been set aside for a handful of strategic institutional investors including China Shipping Container Lines, Hutchison Whampoa, Singapore ports operator PSA International, and Nippon Yusen K.K, Japan's largest shipping line,

Ten percent of the IPO has been allocated for individual investors, with the remainder going to other institutional investors.

Dalian Port built a 300,000-ton dock specializing in oil shipment in June 2004, which made it the biggest oil transit port in northern China, and it is expected to cash in on China's rising energy demands. China’s oil imports are predicted to increase by about 80% to 225 million tons in 2010, from 127 million tons last year. The port also operates container terminals.

Trading is expected to begin April 28.

According to research by Nomura Holdings Inc., in 2005, Dalian Port reported earnings before interest and taxes of 572.4 million yuan (US$71.4 million), up 22% from 470.4 million yuan the previous year.

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