Another Chinese supplier opts for IPO

Another Chinese supplier opts for IPO
03 January 2006

China National Building Materials, the mainland’s largest provider of products used in construction, plans to raise up to US$150m in an initial public offering in Hong Kong this quarter, market sources said. CNBM  has 20 billion yuan (US$2.5bn) in total assets and earned 12 billion yuan in net income in 2004, according to its Web site. Morgan Stanley is arranging the sale.

CNBM, one of 200 state-owned companies singled out by the government for support to become global players and to fend off increasing foreign competition at home, is coming to market as growth in the domestic residential property market slows.

The central and municipal governments in cities such as Beijing  and Shanghai took measures last year, including restricting bank lending and raising taxes, to cool what many observers said was an overheated market dominated by speculators as opposed to buyers.

In Shanghai, growth in the property market slowed to under five per cent last year from more than 20 per cent average annual growth earlier this decade. Even so, the construction industry is expected to remain buoyant thanks to an economy expected to maintain growth of about nine per cent and through projects related to the 2008 Beijing Olympics, such as the US$540m Wukesong Culture and Sports Center and US$314m Olympic Green B Conference Center.

The mainland’s growing medical industry, with an increasing number of private hospitals, is another sector expected to fuel construction growth, according to research group BCI Asia Construction Information.

CNBM maintains 200 affiliated companies with 30,000 employees, operating across China in provinces such as Heilongjiang, Zhejiang, Jiangsu and Henan . CNBM exports to at least 30 countries, including to Europe , the Middle East , Japan and the United States.

CNBM designs, manufactures and distributes glass, cement, composite materials, such as glass fibre, and insulation. The group can manufacture up to 15,000 tonnes of composite materials a year, while annual capacity at its cement plants apparently totals 10Mt.

Published under Cement News