China Hongqiao Group, the nation’s largest personal aluminium producer, goals to boost HK$11.68 billion (US$1.5 billion) from a share sale to fund initiatives and repay debt, capitalising on sturdy trade margins and a buoyant Hong Kong fairness market.
The corporate deliberate to promote as much as 400 million present shares for HK$29.20 every, representing a 9.6 per cent low cost to its closing worth on Monday, in response to a submitting to the Hong Kong inventory alternate on Tuesday.
“In view of the present capital market situations, the board considers the inserting and the subscription characterize alternative for the corporate to boost additional capital for the corporate, whereas on the similar time broadening its shareholder and capital base,” the submitting stated.
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Its shares slumped 7.7 per cent to HK$29.80 in early buying and selling, trimming its achieve to 153.4 per cent this 12 months.
Aluminium is presently buying and selling close to a three-year excessive due to strong demand and measured provide. Photograph: AFP alt=Aluminium is presently buying and selling close to a three-year excessive due to strong demand and measured provide. Photograph: AFP>
The positioned shares would account for about 4 per cent of China Hongqiao’s enlarged share capital, in response to the submitting. The corporate added that the provide worth marked a premium of practically 2.2 per cent to the typical closing worth of round HK$28.58 per share over the previous 30 buying and selling days.
The fundraising comes amid rising margins for the metallic, with aluminium buying and selling close to a three-year excessive due to strong demand and measured provide.
“Aluminium stays considered one of our most most well-liked sectors as we anticipate provide to stay tight benefiting from China’s capability cap coverage and the absence of explosive capability addition in Indonesia, leading to higher-for-longer aluminium margins,” Citigroup analyst Jack Shang stated in a word earlier this month.
The US financial institution raised China Hongqiao’s 12-month goal worth to HK$36 from HK$25.20, citing larger margins, superior profitability and a lovely shareholder return coverage, in addition to the administration’s cautious stance on the corporate’s Indonesian challenge growth.
China Hongqiao, Shandong Nanshan Aluminium and Tsingshan Holding Group are among the many Chinese language producers turning to the aluminium trade in Indonesia, Southeast Asia’s largest economic system, with multibillion-dollar initiatives.
