Private machinery maker plans HK listing
By Liu Baijia (China Daily)
Updated: 2004-03-23 11:12

Sany Group, one of the biggest private Chinese machinery manufacturers, aims to list a subsidiary on a Hong Kong stock market next year and play an active role in the restructuring of Northeastern China's industrial sector to achieve explosive growth in the next six years.

Mao Zhongwu, a director with Sany Group and president of its Shanghai-listed engineering machinery arm Sany Heavy Industry Co Ltd, said in an interview in Beijing that his group has set its aim to list Sany Heavy Machine Co Ltd on the Hong Kong stock market next year.

He declined to disclose more details about the initial public offering (IPO).

He said that Sany Heavy Machine, founded last year, is mainly focused on digging and lifting machines. It contributed a little to the group's profits in 2003, but this year, the company is expected to generate 1.3 billion yuan (US$157 million) in revenues this year for the machinery group which is based in Changsha, Hunan Province.

Mao said Sany Group also plans to list one or two more subsidiaries next year, either on a domestic stock exchange or a bourse in New York or Singapore, to accelerate the company's growth with more capital and rising company reputation from listings.

Besides making more IPOs of its subsidiaries, Sany Group will also actively participate in the restructuring of the machinery industry in Northeast China, especially in Shenyang, capital of Liaoning Province.

The machinery group established a new subsidiary, Sany Heavy Equipment Co Ltd, in Shenyang in January to make equipment for railways, mining, and construction material manufacturing.

"We should not only rely on self-development, and so partnerships with large State-owned enterprises in Northeast China will be a major way to develop our heavy equipment business," Mao said in an interview during Sany Group's product roadshow in Beijing.

He refused to reveal the amount that his company intends to spend on acquisitions of State-owned companies, but he said the acquired companies will bring production capacities worth 6 billion yuan (US$725 million).

Automobiles, the other pillar industry for the private group with machinery, will also play a key role in the company's expansion.

Its automobile business Sany Passenger Car Co Ltd will shift its focus to heavy trucks and car components in the future.

Mao said his group has also been talking with some European truck makers on co-operative agreements, including possible joint ventures and introduction of foreign technologies.

"We will make some significant progress this year," Mao said.

All these developments are centred around one goal of Sany Group - to generate 60 billion yuan (US$7.25 billion) in 2010.

"Previously our goal was 30 billion yuan (US$3.62 billion), but we found the goal was too easy, so we raised the target to the present one," Mao said.

He added that with that goal achieved, Sany Group will be able to become one of the top 10 machinery makers in the world.

Last year, the revenues of the group reached 4 billion yuan (US$483 million). This year, Sany Group aimed to sell 10 billion yuan (US$1.2 billion) worth of products and make 1 billion yuan (US$120 million) in profits. Its heavy engineering machinery arm will contribute half of the total revenues.

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