Xiamen Port Affairs Co seeking HK listing
By Zhang Jin (China Daily)
Updated: 2004-08-09 09:16

Xiamen Port Affairs Co, a major State-owned enterprise running most of the port business in Xiamen, is seeking to be listed in Hong Kong, sources close to the company said.

The move is aimed at raising more funds from the capital market, helping the company grasp opportunities that are opening up with the ongoing construction spree in the southeastern city of Xiamen, the mainland's seventh largest container port.

"The company has indeed applied to the Hong Kong Stock Exchange," said Wang Yongjun, director of Xiamen Port Administration. "It is currently busy with the listing processes."

The effort follows the company's recent overtaking of 55.13 per cent stake of a Shenzhen-listed company Xiamen Road and Bridge Co Ltd.

However, he did not reveal any details, such as the timetable or how much the company wishes to raise from the initial public offering.

Analysts say the company is seeking a fresh inflow of funds that are presently scarce due to competition from a new host of infrastructure projects to be launched in the city.

According to Wang, the city is focusing efforts on improving its Haicang and Songyu ports and is considering developing a new port in its eastern waters.

In addition, the city will co-operate with neighbouring ports such as Zhaoyin port in Zhangzhou to cultivate deep water cargo routes.

"An enormous market is beckoning," said Zhang Ji, a professor on port economy at Jiangsu-based Yangzhou University. "Undoubtedly, Xiamen Port Affairs Co cannot afford to lose such a big market."

However, to win the bid of these projects, the company must have a fat wallet, Zhang indicated.

According to Wang, some 10 to 14 billion yuan (US$1.3-1.7 billion) are needed for these new projects in the coming six years.

The company's Hong Kong listing is designed to inject it with the funds necessary to go forward with these plans, Zhang said.

The move will also enhance the company's competitiveness and thus boost its status in the city.

Xiamen Port Affairs Co is a major player of Xiamen's port business. However, its local leadership is now being challenged by a string of overseas new comers such as the Hong Kong-based Hutchison Whampoa Limited, Singapore-based PSA Corporation Limited and Denmark-based AP Moller-Maersk Group.

All these overseas players are seeking to make bigger inroads into Xiamen since the central government loosened market access beginning this year.

The booming port economy in China, which is driven by a skyrocketing foreign trade, will provide more opportunities for those involved in port construction and operation, Zhang said.

Major Chinese ports are all seeking to enhance their handling-capacities to sustain import and export businesses.

Xiamen handled 2.3 million twenty-foot equivalent unit (TEU) containers in 2003, ranking the port 29th globally.

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