BRIEF: Chuangxin Industries launches $700 million IPO
Electrolytic aluminum producer Chuangxin Industries Holdings Ltd. (2788.HK) launched its Hong Kong IPO on Friday, aiming to raise HK$5.5 billion ($708 million) by selling 500 million shares for between HK$10.18 and HK$10.99 apiece. The offer closes on Nov. 19, with trading set to commence on Nov. 24.
The company reported revenue of 7.21 billion yuan ($1 billion) for the first five months of this year, up 22.6% year-on-year. But its profit fell 14.4% to 856 million yuan, as Chuangxin blamed rising raw material prices. That squeezed its gross profit margin, which plummeted 8.3 percentage points to 19.9% in the first five months of this year from 28.2% last year.
The company plans to use about half of the net IPO proceeds to expand its overseas production capacity, including building an aluminum electrolysis smelter. Another 40% will go to constructing green energy power stations and purchasing related equipment, with the remainder set for use as general working capital
By Lau Chi Hang
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