Word is that China Zhongwang got $1.3 billion from its initial public offering in Hong Kong. That was less than the $1.6 billion it was looking for, but would still make it the first billion dollar IPO since China South Locomotive & Rolling Stock raised $1.6 billion last August.
The IPO market worldwide has been pretty moribund for all the obvious reasons. China Zhongwang is Asia’s largest maker of extruded aluminum products, which investors see as benefiting from Beijing’s stimulus spending, particularly on new rail lines. Transport-related aluminum products typically have fatter margins than those used in construction. Last year China consumed 39% of the world’s output of extruded aluminum.
The IPO price values the company at just shy of $5 billion, 10 times 2009’s estimated earnings. Trading in the stock is due to start May 8.