Around 1.4 billion shares worth Yuan 9.18bn were traded on the first day of trading. The shares quickly rose to their ceiling price of Yuan 6.99, representing a 44% increase on the opening price of Yuan 4.88, before dropping back to Yuan 6.77 at the close of trading to achieve a 39% rise in value.
“A 30% gain upon trading debut is a reasonable gain for investors,” Mr Ivan Li, a money manager at Loyal Wealth Management Shanghai, was reported as saying in the South China Morning Post. “As the country’s most profitable railway, it was not a surprise that investors showed keen interest in owning the shares.”
It was originally intended to offer 7.56 billion shares, but this was cut back to 6.29 billion, which represents 12.8% of the share capital. This is the first privatisation of a high-speed line in China.
The new company will use the funds to acquire part of the equity of Jingfu Passenger Specialty Anhui Company and manage high-speed lines serving Anhui province and running south to Fuzhou.
The 350km/h 1318km Beijing - Shanghai line opened in June 2011 and has made a profit for five consecutive years since 2014 reaching Yuan 10.25bn in 2018. It made a net profit of Yuan 9.5bn in the first nine months of 2019.
