China Shipping Container Lines (CSCL) has cut the size of its initial public offering again by more than 20 percent to US $1-1.2 billion after fund managers pushed for lower pricing, market sources said on Wednesday.
"After the pre-marketing, we come up with a new price range for China Shipping Container Lines, it's definitely worth a second look," its banker BNP Paribas Peregrine said in an e-mail sent to fund managers.
The world's tenth-largest container company had hoped to raise up to US $2 billion but trimmed the size of its planned Hong Kong IPO more than 25 percent to US $1.3-1.5 billion last week in the face of slumping equities markets.
It also lowered its pricing range to seven to nine times forecast 2004 earnings from nine to 13 times.
With the IPO size cut again, the pricing range would decline further to 5.7-7.5 times forecast 2004 earnings of 3.6 billion yuan, according to BNP. Over the past week, shares of Taiwan's Evergreen Marine Corp, the world's third-largest shipping line, have dropped 22 percent to TW$22.60, lowering its price-to-earnings ratio to 7.8 times from 10 times.
CSCL's revised P/E ratio is lower than Evergreen Marine, but still more expensive than Neptune Oriental Lines, which trades at 2.9 times forecast 2004 earnings, and Orient Overseas(International) Ltd's 3.8 times.
In terms of price-to-book ratio, BNP said CSCL's revised price range would represent 0.85-1.01 times 2004 net asset value on back of a US $1 billion unrealised gain from cheaper ship building costs.