Automobile firms may test IPO waters
- Source: China.org.cn
- [10:26 July 30 2009]
- Comments
Chinese automobile firms are making a beeline to the capital market to raise capital for their expansion plans and to cash in on the vehicle boom in the domestic market.
Industry analysts, however, maintain that the automakers market fate would depend largely on their own profitability.
Battery and automobile maker BYD Co said recently that it is planning to raise capital for new projects through issuance of as many as 100 million A shares on the Shenzhen Stock Exchange.
The country's largest private automaker Chery Automobile Co said last week that it was restarting plans for an A-share IPO as "the current global industry slowdown due to the financial crisis provides Chery with the best opportunity to boost expansion plans by raising capital".
The company refused to disclose where and how much it hoped to raise through the IPO, but said Chery was "qualified" to list due to its strong financials.
Other automobile firms like Great Wall Motor Co, Guangzhou Automobile Group Corp, Lifan Industry (Group) Co Ltd and Brilliance Group are also mulling domestic IPOs.
China lifted the ban on new share listings last month after suspending it for almost a year. The Shanghai Composite Index has jumped nearly 80 percent from 2008, a clear signal of a rebound in the domestic stock market.
