Rongsheng Heavy Gains on Offshore Order: Hong Kong Mover
China Rongsheng Heavy Industries Group Holdings Ltd. (1101) jumped the most in a year in Hong Kong trading as a new manager and an order to build a tender barge stoked optimism about the company’s push into the offshore- equipment market.
The shipbuilder, China’s biggest outside state control, surged 14 percent, the most since Oct. 27 last year, to HK$1.58 at close of trading. There were 24 trades of 1 million shares or more, and the 181 million shares traded were more than five times the stock’s three month average, according to data compiled by Bloomberg.
The tender-barge order marks a breakthrough for Shanghai- based Rongsheng as it’s the company’s first in the offshore- engineering sector, according to Barclays Plc. The shipbuilder has also hired Don Lee, a former Sembcorp Marine Ltd. executive, and formed a dedicated offshore unit in Singapore as it seeks orders from energy companies to offset waning demand for dry- bulk ships.
“Don Lee is very well-known in the marketing and operations of offshore products,” said Shanghai-based UOB Kay Hian Holdings Ltd. analyst Lawrence Li. “The market is expecting that he’ll bring in more offshore orders.”
Ten-day historical volatility on the stock climbed to the highest level since Aug. 9, according to data compiled by Bloomberg.
Lee has worked in the industry for 40 years, and was previously senior general manager at Sembcorp Marine’s Jurong Shipyard, Rongsheng said in a statement yesterday. Singapore- based Sembcorp is the world’s biggest oil-rig maker after Keppel Corp. (KEP)
Rongsheng won the tender-barge order from a Norwegian customer, it said without elaboration. The unit will have a maximum working depth of 2,000 meters and a drilling depth of 6,000 meters, according to the statement.
The company’s first-half net income fell 82 percent to 215.8 million yuan ($35 million) as a global glut of commodity ships depressed orders and prices.
A company controlled by Rongsheng Chairman Zhang Zhi Rong, Wells Advantage Ltd., also last week agreed to pay $14 million to resolve U.S. regulatory claims that it profited from illegal trades before Cnooc Ltd. (883) announced plans to buy Nexen Inc. (NXY)
To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Neil Denslow at email@example.com