Dalian Port expects Shanghai listing early next year

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By Wang Xiaotian (China Daily/Agencies)
Updated: 2009-10-17 11:40

Dalian Port (PDA) Co Ltd, China's third largest port operator, is expecting to complete its initial public offering (IPO) on the Shanghai Stock Exchange within the first half of 2010, Chairman Sun Hong told a news conference in Hong Kong on Friday.

Because the company was listed in Hong Kong in 2006, it means it will become China's first port with a dual listing.

It is the biggest port operator in Bohai Bay, northeastern China, and focuses on container and crude oil.

Earlier this month, the company said it planned to issue no more than 1.2 billion A shares in Shanghai and no more than 1.2 billion shares to its parent, PDA Corp, expecting to raise a total of 2.8 billion yuan ($410.14 million).

After the share issue, the holding of its parent will be reduced from 60 percent to 55 percent. Currently, the company has some 3 billion shares.

"Assuming 3.67 yuan per share as the offering price, and earnings of 140 million yuan brought by asset acquisition this year, the dilution effect to H shares may be offset," said Zhang Fengge, executive director of Dalian Port. "Earnings per share will increase 0.7 percent."

Funds raised from the public offering will mainly be used for the construction of dock infrastructure and bulk cargo dock facilities, as well as bank repayments.

Sun said that the port would increase capital expenditure next year to 3 billion yuan after an asset acquisition from its parent PDA Corp, up from 2 billion yuan this year.

Sun also said that after the asset acquisition from the parent company, it would enjoy a bigger market share. "And the net profit may rise to 140 million yuan," he added.

In 2008, Dalian Port accomplished throughput of 185 million tons, an 11.9-percent rise on the previous year, and an 18.1-percent rise in containers to 4.5 million 20-foot equivalent units (TEUs). More than 90 percent of trade containers in northeastern China move through the port to go abroad.

Sun said the port aims to boost throughput by 10 percent next year from this year's expected throughput. Its passenger roll-on, roll-off terminal experienced a 50-percent rise on both throughput and revenue in the first half year of 2009.

Port operators in China have been reporting gradually improving volumes after the deepest slump in global trade because of the economic slowdown.

Ports in China's Yangtze River Delta posted growth in cargo volumes last month compared with a year earlier. Cargo throughput at Shanghai rose 5.8 percent year-on-year to 33.28 million tons last month, according to Shanghai International Port Group.

This week, the Baltic Dry Index reached a seven-month high point, boosting optimism for port business in the fourth quarter and early next year.

Another high rated port on the mainland - Qingdao Port - is also gearing up for its IPO as the seventh largest port worldwide and the largest container transfer port in China.

"We've been preparing for years. We ran for H shares at first but this year we restarted the application for A-share listing, wishing to go to the market as a whole," said Tian Guangwen, vice-president of Qingdao Port.

"It is good news for Dalian. Our IPO will not be for capital raising but for better development."

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