(Sxcoal, Apr 12, 2007) Jiangsu Lianyungang Port Co., a port operator in eastern China, may raise as much as 747 million yuan ($97 million) in an initial share sale in Shanghai, tapping demand in a stock market that's almost tripled in the past year.
 
Jiangsu Lianyungang will sell a 33.5 percent stake, or 150 million yuan-denominated shares, at a price range between 4.6 yuan and 4.98 yuan, the company said in a statement to the Shanghai Stock Exchange Thursday. The port operator will start marketing the shares in the city Thursday, the statement said.
 
The company follows larger port operators in Shanghai and Tianjin in raising funds from China's booming stock market as the central government has ordered port expansion. China's CSI 300 Index, which tracks yuan-denominated A shares listed on the country's two exchanges, rose to a record for eighth day in a row Wednesday.
 
"It's a good time to sell shares, as the stock market is hot,'' said Zhu Anping, an analyst at Shenyin Wanguo Securities Co. in Shanghai, before today's statement. "Lianyungang and other port operators will generate stable profit growth on booming trade in the coming years.''
 
China's exports rose 27 percent last year, and imports rose 20 percent. Global trade will probably grow 7.6 percent this year, according to the International Monetary Fund. About 90 percent of the world's trade is moved by sea.
 
China plans to build 639 deep-water berths by 2010, doubling the capacity of coastal ports to keep pace with increasing trade.
 
Profit Growth
 
Profit growth at China's 10 listed port operators averaged 16 percent in 2005 and the year before, according to Bloomberg calculations. Shanghai International Port (Group) Co., operator of China's busiest container port, posted an average 44 percent profit growth for the past three years.
 
China Cinda Asset Management Corp. will arrange the share sale of Jiangsu Lianyungang, the nation's second-largest port for export of coke.
 
Proceeds from the public share sale will be used to build two berths for general use and coke transport with combined investment of 829.8 million yuan ($107 million), Jiangsu Lianyungang said in its prospectus. The company had 22 berths at the end of 2006.
 
Jiangsu Lianyungang is a unit of Lianyungang Port Group Co., which runs the nation's ninth-busiest container harbor in Shandong province through its units. The parent will own a controlling 48.8 percent stake in the listed company after the share sale, compared with its current 73.4 percent.
 
Coke Transport
 
The port operator's net income doubled to 83 million yuan in 2006 from a year earlier, it said in its share sale prospectus. Sales more than tripled to 797.5 million yuan. The company handled 19.3 million metric tons of cargo in the first half of 2006, according to the prospectus.
 
Coke transport accounted for 11 percent of cargo volume at Jiangsu Lianyungang in 2006, trailing coal, which made up a quarter of the volume. Metals excluding steel accounted for 10 percent.
 
China is the world's largest producer and exporter of coke, a raw material used in steelmaking. The country produces more than half the world's coke and exported 14.5 million tons of the material in 2006.
source:Sxcoal