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Shanghai SK nodded to list on Shenzhen bourse

By Ding Qi (chinadaily.com.cn)
Updated: 2009-07-20 15:44

Shanghai SK Petroleum & Chemical Equipment Corporation Ltd announced on Sunday that it had been granted final approval by the China Securities Regulatory Commission (CSRC) for an initial public offering (IPO) on the Shenzhen Stock Exchange.

Shanghai SK, an oil exploration and drilling equipment maker, will be the fourth company to float shares on the small- and medium-sized enterprise board of the Shenzhen bourse after the CSRC ended a nine-month suspension of A-share IPOs last month. (A-shares are denominated and traded in renminbi. Chinese stock markets also trade B shares, which are denominated in foreign currencies, but they are much less common.)

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The suspension, originally put in place to keep stock prices from sinking too low, was lifted as the market improved, but it forced Shanghai SK to wait an unusually long time between initial approval for an IPO, which it received nearly a year ago, and the final confirmation of a planned listing.

The company hopes to raise 500 million yuan ($73.20 million) by issuing no more than 46 million shares, which will account for roughly 25 percent of the company's total capitalization after the offering.

Shanghai SK's net profit reached 91.62 million yuan last year, and the company plans to use the proceeds from its IPO to build petrochemical facilities in order to help expand its manufacturing capacity.

China Euro Securities Limited is underwriting the listing and will work with Shanghai SK on three rounds of road shows in Beijing, Shanghai, and Shenzhen from July 21 to 23 to promote the IPO. No firm date for the IPO has been set.

In the past weeks, Guilin Sanjin Pharma, Wanma Cable Co and Your-Mart Co all debuted successfully on the Shenzhen-based small- and medium-sized enterprise board, and all three companies saw their shares trading at nearly double the IPO prices.