Wah Kwong Maritime Transport Holdings will offer 125 million shares at a range of HK$7.78 to HK$10.20 per share raising up to HK$1.28 billion.

The price range represents a multiple of 14 to 19 times of 2007 earnings. The retail subscription opens today until June 2.

Even though bulk carriers and tankers' charter rates drop, there will still be growth in the company profits as it is protected by the fixed rates of charter arrangements, said the company's senior executives.

Chief Executive Officer Timothy Huxley said the company's charter arrangements for its 11 ordered bulk carriers have been fixed until 2015 with variable periods for different fleet.

Meanwhile, six of 11 fleet it currently owns will become charter-free in 2009 and 2010. The renewal of these vessels at different times will allow the company to capture considerable upside, he added.

Time charter rates for bulk carrier and tankers had been going up in 2007, but the rates are expected to go down in 2010 as the number of supply will increase by that time.

Vice-chairman Sabrina Chao said since the company has charter arrangement with terms of one to five years, the company can readjust policy more flexibly to reduce the impact of volatile market rates.

Wah Kwong Maritime is engaged in energy and raw-material shipping, using four tankers and seven bulk vessels. The average fleet is just 2.3 years, compared with an industry average of 16 years, as it disposes of old vessels over the years.

Chao said that the company will focus on the charter business and will dispose old vessels only when there are good opportunities.

It will also continue to focus on the Asia Pacific region to capture the strong demands for energy and raw material transportation in China and India, which is not affected by the weakening US economy.

A total of 59 percent of the IPO proceeds will be used to fund the optimization of existing fleet and finance the 11 newly ordered bulk carriers to be delivered from 2009 to 2010. And 35 percent will be used to repay the advances from the ultimate holding company and fellow subsidiaries.

The estimated profits for this year will not be less than $34.7 million, up 6.4 percent due to the reduced number of vessels disposed during the year.

Chao said it will distribute 70 percent of its 2009 profits excluding sales of vessels. But the gearing ratio will remain 50 to 60 percent after the global offering.

Cazenove is the global coordinator. It is the joint sponsors, bookrunners and lead managers with Anglo Chinese Corporate Finance.

Shandong Chenming Paper and Chongqing Machinery are also getting ready for IPO marketing roadshows to raise as much as HK$4.2 billion and HK$1.71 billion respectively.

Meanwhile, Little Sheep's opening date of retail subscription has been postponed.

(HK Edition 05/29/2008 page3)