Chinese giants on course for stock flotations

Market volatility will not hold back $5 billion Hong Kong IPOs

Sany made $900 million in the first six months of 2011.
Sany made $900 million in the first six months of 2011.

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Continued disruption in the world's financial markets is not preventing two of China's biggest construction companies from issuing IPOs (initial public offerings) worth $5 billion between them.

Sany Heavy Industry and XCMG Construction Machinery will apply for listings on the Hong Kong stock exchange within the next two months, according to local media reports.

Sany's IPO is predicted to raise $3 billion via a listing handled by BoA Merrill Lynch, Citi and Citic Securities.

Meanwhile XCMG is also aiming to raise up to $2 billion with its offering arranged by BNP Paribas, CICC, Credit Suisse, HSBC, Macquarie and Morgan Stanley.

Both companies are now among the world's top ten biggest construction companies. Sany posted a net profit of $900 million in the first half of 2011, an increase of 106%. XCMG is also claimed to have seen its profits increase by 61% in the same period.

With both Sany and XCMG enjoying sizeable revenue fuelled by domestic demand, they could be seen as desirable investments in an increasingly risk-averse and volatile market.

 

 

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