South Locomotive jumps 77 pct in Shanghai debut
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SHANGHAI, Aug 18 (Reuters) - Shares in China South Locomotive rose 77 percent in their Shanghai debut on Monday, buoyed by a low IPO price and the firm's dominant position in China's train manufacturing sector, after it raised $1.5 billion in a scaled-back Hong Kong and Shanghai IPO.
Local-currency A shares in China South Locomotive & Rolling Stock Corp (601766.SS), the country's largest train maker, opened at 3.86 yuan versus a Shanghai initial public offering price of 2.18 yuan.
A Reuters survey of six industry analysts last week gave a median forecast of a 60 percent rise in the stock to 3.5 yuan on its first trading day, with a wide range of 2.8 yuan to 4.2 yuan.
South Locomotive's dual Hong Kong and Shanghai offering was Asia's third-largest this year.
The Shanghai offer of 3 billion A shares, or 30 percent of its expanded share capital, attracted huge demand of 2.27 trillion yuan ($330 billion).
Its A-share oversubscription ratio was one of the highest for a big IPO in the past two years, despite a steep drop in the stock market. The Shanghai Composite Index .SSEC is down 60 percent from last October's peak.
The Beijing-based firm accounts for around half of China's railway and subway rail vehicle market. It has said it would use the funds to upgrade technology, expand capacity, build factories and make acquisitions overseas.
South Locomotive's Shanghai IPO was priced at just over 16 times forecast earnings per share, compared with 28 times for China Railway Construction Corp (601186.SS) in February and 21 times for China Railway Group (601390.SS) last November. ($1=6.87 Yuan) (Reporting by Lu Jianxin; Editing by Edmund Klamann)
