Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Rongsheng Heavy Seeks $2.3 Billion in Hong Kong IPO

Nov. 1 (Bloomberg) -- China Rongsheng Heavy Industries, China’s largest shipbuilder outside state control, is seeking $2.3 billion in what may be Hong Kong’s third-largest initial public offering this year, according to terms sent to investors.

The company plans to sell 1.75 billion shares at HK$7.30 to HK$10.10, the terms show. China National Offshore Oil Corp., China Life Insurance (Group) Co., China Southern Fund Management Co. and Atlantis Investment Management Ltd. have agreed to buy a combined $155 million of shares, according to the terms.

Rongsheng intends to use the sale proceeds for projects including building a fourth drydock as a rebound in world trade following last year’s global recession revives demand for ships. The company, which raised $300 million from investors including Goldman Sachs Group Inc. in 2007, planned to sell shares in 2008 before the failure of Lehman Brothers Holdings Inc. and the credit crunch triggered a collapse in global stock markets.

“Orders for shipbuilding are improving and the industry is on a rebound,” said Steven Leung, Hong Kong-based director for institutional sales at UOB-Kay Hian Ltd. Still, demand for the IPO will depend on the valuations, which are yet to be announced, he said.

BOC International Holdings Ltd. is arranging the sale, along with CCB International (Holdings) Ltd., JPMorgan Chase & Co. and Morgan Stanley, according to the terms sheet.

Calls made to the office of Chen Qiang, Rongheng’s president, went unanswered.

AIA, AgriBank

The Rongsheng sale will probably only trail IPOs by AIA Group Ltd. and Agricultural Bank of China Ltd. in Hong Kong this year, according to data compiled by Bloomberg. AIA, which raised $17.8 billion in the city’s largest-ever IPO, gained 17 percent on its Oct. 29 trading debut. Agricultural Bank has risen 29 percent since its $10.4 billion IPO in July.

Sixty-one companies have gone public in Hong Kong this year, raising $40 billion, according to data compiled by Bloomberg. More Chinese businesses, possibly including state-owned enterprises, power companies and railways will likely follow Rongsheng in selling shares, said Erwin Sanft, a Hong Kong-based strategist at BNP Paribas SA.

“There’ll still be mega-IPOs,” he said. “China is the biggest emerging market and so you have a flow of money coming in.”

Rongsheng Orders

Rongsheng also plans to use IPO funds to boost marine-engine production and to increase capacity for making excavators. The company had an order backlog of 88 vessels, or 15.9 million deadweight tons, at the end of September, according to Clarkson Plc. That included 11.19 million deadweight tons of dry-bulk ships, or 58 vessels, the second-highest tally worldwide, according to the shipbroker’s data. The shipyard delivered 10 vessels last year.

Guangzhou Shipyard International Co., the largest shipyard listed in Hong Kong, has gained 28 percent this year. It trades at about 11 times estimated earnings.

Yangzijiang Shipbuilding Holdings Ltd., the largest listed Chinese shipyard outside state control, trades at a price to estimated earnings ratio of about 13. The company, which raised NT$3.76 billion ($123 million) selling depositary receipts in Taiwan in September, has risen 58 percent this year in Singapore trading.

China Shipbuilding Industry Co., the nation’s largest maker of vessel equipment, raised 14.7 billion yuan ($2.2 billion) in a Shanghai IPO in December. It’s gained 34 percent this year.

Shipping lines have begun to resume ordering new vessels after a plunge in demand during the global recession. Evergreen Group and Neptune Orient Lines Ltd., Asia’s two biggest container lines, have ordered 32 new ships between them from South Korean shipyards since June.

To contact the reporters on this story: Wing-Gar Cheng in Hong Kong at; Nick Gentle in Hong Kong at

To contact the editor responsible for this story: Neil Denslow at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.