Shares of China Communications Construction Co. (601800.SH), a major builder of ports and roads in China, Friday staged a strong debut in Shanghai, on improving sentiment for new listings amid the broader stock-market recovery.
Analysts say, however, they are cautious about the outlook for Chinese construction companies, citing slower investment growth and concerns about their ability to repay debt.
“I’m not surprised by the stock’s performance. With the recovery in the A-share market, almost all the new listings have staged a stellar debut recently,” said TX Investment strategist Qiu Yanying.
According to China Communications Construction, proceeds raised will mainly be used to purchase dredging ships, engineering ships and mechanical equipment. It will also invest in BOT projects, which will help to strengthen its profitability and improve operational efficiency.
China Communications Construction benefits from the synergies of its various businesses, and has played an important role in the construction of the Yangshan Deep-Water Port, including planning the entire construction process, filling the port area, constructing the wharf and Donghai Bridge, and supplying harbour machinery.
Dredging Today Staff, March 9, 2012; Image: ccccltd