China CNR Corp. (601299), the nation’s second-biggest maker of trains, said its board approved a plan to seek a listing on the Hong Kong stock exchange.
The company will sell as many as 1.82 billion H shares, representing about 15 percent of its total share capital after the offering, China CNR said in a statement to the Shanghai exchange today. Based on China CNR’s closing price of 5.23 yuan, the listing may raise about 9.5 billion yuan ($1.6 billion).
The timing and pricing of the offering, which still needs approval from shareholders and the securities regulator, have not been set yet, according to the statement. Larger rival CSR Corp. (1766) trades in Hong Kong at 16.5 times this year’s estimated earnings, a premium over the 15.8 times multiple its shares trade at in Shanghai, according to data compiled by Bloomberg.
China CNR is seeking to raise funds as Chinese rail equipment makers seek expansion into new markets overseas and prepare for another round of bidding for high-speed trains in China. Thailand’s Prime Minister Yingluck Shinawatra said in October Chinese trainmakers had expressed interest in developing the nation’s high-speed train system.
Shares of China CNR have climbed 26 percent since the end of September, while CSR’s Shanghai-traded shares have gained 23 percent over the period.
China CNR will use the proceeds from the Hong Kong stock sales to fund overseas projects, equipment purchases and research and development, it said in the statement.
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