First overseas company floats A shares ( 2003-12-31 09:11) (China Daily)
Zhejiang King Refrigeration
Industry Co became the first overseas-funded firm listed on the Chinese
mainland's A-share market, a sign that the mainland is ready to open its stock
market to overseas companies.
Stock in the company ended up 22.19 per cent at 8.92 yuan (US$1.1) on its
debut on the Shanghai stock exchange.
King Refrigeration, which is controlled by King Refrigeration Machinery
Holdings Co, Taiwan's biggest maker of industrial central air conditioners, sold
40 million shares at 7.3 yuan (88 US cents) each in its initial public offering
(IPO).
King Refrigeration is the first company to take advantage of guidelines
approved by the Chinese Government in November 2001 that provide a legal basis
for overseas-funded companies seeking a listing on the domestic market.
Experts believe the listing will become a milestone in the opening up of the
Chinese mainland stock market. It has allowed foreign investors to buy into the
market through a Qualified Foreign Institutional Investor scheme.
The introduction of more overseas companies is billed by the market as a key
move to ensure the quality of listed firms, which are mostly State-owned with
sometimes fraudulent information disclosure and poor performance, said Zuo
Xiaolei with China Galaxy Securities.
The listing opens a way for overseas-funded firms to tap into the mainland's
US$500 billion A share market, she said.
In April, Ningbo Tongmuo New Materials Co became the first company to gain
approval from the examination board with the China Securities Regulatory
Commission, followed by Hefei Rongshida Sanyo Electric Appliances Co. The two
companies, both Japanese-controlled, are yet to get a final go-ahead.
Home appliance maker Tsann Kuen (China) Enterprise Co, in which Taiwan's EUPA
Industry Corp holds a 29 per cent stake, sold foreign-currency-denominated B
shares in 1993.
King Refrigeration was set up by its parent company and four Chinese mainland
partners in 1993. The company made a 16.9 million yuan (US$2.04 million) profit
in the first nine months on sales of 129.7 million yuan (US$15.7 million).
In the wake of the float, H. K. Chen, chairman of Taiwanese King Machinery
Co, now owns 27 per cent of the company, down from 45 per cent.
