Qinhuangdao Port Co. (3369), operator of the world’s biggest coal hub, dropped 6.3 percent in its Hong Kong trading debut as a Chinese government pledge to clean up pollution may curb demand for the commodity.
The company shares fell to HK$4.92 at the close of trading, compared with the initial public offering price of HK$5.25 per share. The Hebei province, China-based firm raised HK$4.36 billion ($562 million) in the sale.
Air pollution in some Chinese cities exceeded hazardous levels several times this year, and Premier Li Keqiang pledged in March to take steps that include cutting coal consumption. Fog shrouding Shanghai this month caused flight cancellations and sent an air quality index monitored by the U.S. consulate in the city surging past 500 to the “beyond index” category.
“Investors are concerned about the port’s long-term throughput outlook as China is restructuring its economy and the proportion of coal consumption will be lowered,” Lawrence Li, a Shanghai-based analyst at UOB Kay-Hian Holdings Ltd., said by phone. “The recent smog in Shanghai has increased people’s awareness of the need for environmental protection, promoting the trend to use cleaner energy in the future.”
Qinhuangdao Port is the world’s largest coal terminal by throughput in 2012, accounting for about 32 percent of the seaborne volume loaded by China’s coastal ports, according to Drewry Shipping Consultants Ltd.
Falling Prices
Coal for immediate delivery at Qinhuangdao fell to 525 yuan ($86) to 540 yuan a metric ton on Sept. 22, the lowest level since December 2008, according to data from the China Coal Transport and Distribution Association, or CCTD.
Qinhuangdao Port also runs terminals in Caofeidian Port and Huanghua Port in Northern China’s Bohai Rim and plans to use about 65 percent of net proceeds from the listing to help pay for construction of two 200,000 ton-level ore berths in Huanghua Port. The 5.49 billion yuan project is scheduled for completion next year.
The company and associates operate a total of 62 berths and handled about 336 million tons of commodities in 2012, according to its prospectus. Net income in 2012 jumped 32 percent to 1.4 billion yuan.
Qinhuangdao’s IPO is the sixth biggest in Hong Kong this year, according to data compiled by Bloomberg. The 30 companies that completed IPOs worth at least $100 million in Hong Kong this year rose on average 3.3 percent at the end of their first day of trading, data compiled by Bloomberg shows.
The port operator and China Cinda Asset Management Co. (1359), which also debuted today, are among Chinese companies seeking to raise funds after a freeze on domestic offerings that lasted more than one year. Hong Kong IPOs have raised about $16.5 billion this year, more than double the amount for the whole 2012, according to data compiled by Bloomberg.