The mainland's largest cement equipment maker China National
Materials (Sinoma) said yesterday it would attempt to boost its
earnings with greater expansion overseas.
"The overseas and domestic markets currently weight about 65
percent and 35 percent for our cement business, respectively. The
former will continue to enlarge with our foray into Russia, North
America and Africa," the company's chairman and executive director
Tan Zhongming told reporters at its IPO press conference in Hong
Kong yesterday.
Tan said the company intends to merge with the cement arm of its
parent group. The parent group has signaled giving preferences to
support the company going public in Hong Kong.
Sinoma will issue 930 million shares in the Hong Kong exchange
in a bid to collect as much as HK$4.1 billion through the deal.
In response to the central government's tightening monetary
policy, Tan dismissed the measure would put a brake on the cement
business.
"Investment in the industry was overheated in the past, so the
measures could help stabilize the market," Tan said.
As for its glass fiber business, he predicted the annual
production capacity would increase to 400,000 tons in 2008 from
230,000 tons in 2006. That segment contributed 19 percent of
revenue in the first six months this year.
Tan said the company had earmarked 5.1 billion yuan as capital
expenditure in 2008, enough to bankroll the firm's future
expansion.
Among the IPO proceeds, 75 percent will be set aside for
investing in glass fiber, cement and hi-tech materials, while 15
percent and 10 percent will be used for reimbursing short-term
loans and operating capital.
Sinoma will open its order book for retail investors today and
the shares are expected to start trading on Monday.
Sinoma is the largest mainland cement equipment provider with 90
percent market share. The company netted HK$168 million profit for
the first six months this year.
The listing document projected the company would reap no less
than 422 million yuan in net profit for the whole year,
representing a 50 percent growth verses 282 million yuan the
previous year.
Ricky Cheung, vice-president of Enlighten Securities and
Futures, expected hot response.
"The IPO market sentiment is recovering. Coupled with the
Beijing Olympics driving a strong demand for cement, the shares are
predicted to shoot up by 10 to 20 percent in the first trading
day," he said.
(China Daily December 7, 2007)
