Asia Cement Rises as Much as 62% in Hong Kong Debut
Asia Cement (China) Holdings Corp. (743), the mainland unit of Taiwan's second-biggest producer, rose as much as 62 percent in its trading debut in Hong Kong, buoyed by anticipated demand after the earthquake in China last week.
The stock gained 44 percent to HK$7.15 at the 12:30 p.m. break on the Hong Kong stock exchange. The company sold 375 million shares at HK$4.95 each in an initial public offering, according to a statement, raising HK$1.86 billion ($238 million).
The unit, whose profit almost tripled last year, resumed shipping and production at its factory near the epicenter of the May 12 earthquake in Sichuan province after a three-day shutdown. Demand will rise with reconstruction efforts, Hsu said.
``We'll have a hard time to keep pace'' with cement demand, Douglas Hsu, chairman of Asian Cement Corp. (1102), parent of the Hong Kong-listed company, said in a Bloomberg Television interview today. ``There's a lot of construction waiting to be built in the region.''
The affected factory, situated 100 kilometers (62 miles) from the epicenter of the tremor, has an annual capacity of 2 million metric tons, about a fifth of total production. The mainland unit will add about two kilns a year to double capacity to 20 million tons by 2011, Hsu said.
The 7.9-magnitude earthquake, the most powerful in China in more than half a century, damaged power infrastructure and shut coal mines and oil wells. The death toll rose to 34,073 with 245,108 injured, the government said yesterday.
Asia Cement would use part of the share sale proceeds to acquire rivals in China, Hsu said. Rising raw costs will have minimal effect on earnings, he said.
``We always have a reserve capacity of coal and other materials for two to three months,'' he said.
To contact the reporter on the story: Elaine Chan in Hong Kong firstname.lastname@example.org