Metallurgical Corp of China 1618

[winston]

Opened down 14% in HK. I've good company though:-

The five cornerstone investors are CITIC Pacific (0267), Bank of China (3988), China Construction Bank (0939), China Communication Construction (1800), and China Overseas (0688), ...

Win some, lose some ..

[-dol-]

I think Mr Lee Shau Kee committed HK$10m to this, just to give some token face.

[winston]

MCC fall spurs tycoon's wrath by Mandy Lo and Alfred Liu

Metallurgical Corp of China (1618) slumped as much as 15 percent in the worst trading debut this year on the local stock market.

The firm raised HK$18.23 billion - the largest initial public offering in the SAR in more than a year - but its first-day performance dismayed investors including billionaire Lee Shau-kee, who was alloted US$3 million (HK$23.4 million) worth of MCC shares.

It is estimated that the chairman of Henderson Land Development (0012) posted a paper loss of HK$2.74 million.

Lee poured cold water on recent IPOs, saying that most of them are "meatless bones."

"They are tasteless but it's wasteful to discard them," Lee explained using a Chinese proverb. He said he did not subscribe for any of the listing candidates which are opening retail books.

"Friends ask you to support them, you have to buy some. Otherwise, they will be angry at you," he said.

But Lee said he picked China Resources Cement on his own and was not influenced by friends. He is seeking US$100 million worth of shares in CRC.

"Only buy quality ones ...If you subscribe to shares every time there is an IPO, you will be in deep trouble," Lee warned.

Those who bought MCC shares had a paper loss of HK$740 per board lot of 1,000 shares as the engineering and construction firm plunged 11.7 percent from its offer price to close at HK$5.61. "I won't treat them [MCC shares] as a long-term investment. I hope they will improve and I will sell them when they become profitable," said Lee.

More than 6,000 retail investors in pool B, who subscribed for more than HK$5 million worth of MCC shares, made a paper loss of HK$8,880 to HK$796,980 from their allotments of between 12,000 shares and 1.077 million shares.

MCC opened down at HK$5.52, 13.5 percent lower than its offer price of HK$6.35.

About 1.22 billion shares changed hands and trading volume totaled HK$6.89 billion.

http://www.thestandard.com.hk/news_deta ... 90925&fc=8

[winston]

DJ MARKET TALK: Citi Starts Metallurgical Corp Of China At Hold

1401 [Dow Jones] STOCK CALL: Citigroup starts Metallurgical Corp. of China (1618.HK) at Hold with target price of HK$5.50. Tips company to register robust growth in FY09-11, but believes stock valuation is fair.

Expects 12% and 30% revenue and earnings CAGR over FY09-11, mainly from diversifying into higher-margin businesses and into international markets.

Notes key risks include any decline/positive surprise in metallurgical construction fixed asset investment and thus to metals companies' profitability; raw materials & commodities price fluctuations.

Source: Dow Jones Newswire

[winston]

Engineering play reaps windfall from infrastructure demand


Building and engineering firm Metallurgical Corp of China (1618) said it earned a net profit of 1.4 billion yuan (HK$1.58 billion) in the third quarter under Chinese accounting standards.

Revenue for the nine months to September was 119.8 billion yuan. Newly listed in Hong Kong and Shanghai last month, the firm is not required to give comparative year-on-year data.

MCC said on Wednesday it signed contracts worth 12.6 billion yuan for infrastructure projects in Zhuhai. The building of municipal roads, pipeline network and seawalls in the city will take three years to complete. The value of the contracts equals 8.2 percent of its 2008 revenue, the company said.

Source: DEREK YIU, The Standard HK

http://www.thestandard.com.hk/news_deta ... 91030&fc=8

[winston]

Please note that MS was one of those managing the IPO but I'm sure that there's a Chinese Wall between their Research people and their IBD...

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DJ MARKET TALK: MS Starts Metallurgical Corp At Overweight

1217 [Dow Jones] STOCK CALL: Morgan Stanley starts Metallurgical Corp. of China (1618.HK) at Overweight, target at HK$6.40, based on strong position in steel/nonferrous engineering and construction along value chain, and moves diversifying into building and infrastructure E&C, property and resource development with global footprint.

Notes, in addition to dominating metallurgical E&C industry in China, MCC has strong presence in non-metallurgical E&C with secular growth (24.8% revenue CAGR in FY09-FY11), while metallurgical E&C remains stable at 2.8% CAGR.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: Citi Rates Metallurgical Corp Hold,Target HK$5.50

1607 [Dow Jones] STOCK CALL: Metallurgical Corp. of China's (1618.HK) 9M09 net profit came in at CNY3.453 billion based on A-share GAAP, marking 70% of Citigroup's 2009 forecast; views as in line due to 2H usually stronger than 1H.

Notes 9M09 revenue at CNY119.8 billion on A-share GAAP, CNY117.1 billion on international GAAP, slightly below house's forecast but attributes to 4Q usual time for payment settlements, property-project recognition; expects FY09 revenue also to be in line. Estimates year-to-date new contract value at CNY143 billion, marking 75% of house's FY90 forecast, broadly in line.

Keeps at Hold, target HK$5.50. "MCC is a leading integrated China industrial group with robust growth powered by diversification - but we believe the current valuation (at a premium to CCC (1800.HK) but a discount to CRG (0390.HK)) is fair."

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: CICC Rates Metallurgical Corp Of China Accumulate

1547 [Dow Jones] STOCK CALL: CICC keeps Metallurgical Corp. of China (1618.HK) at Accumulate, with target HK$6.03. Says, upbeat on MCC's earnings growth due to business structure improvement after IPO, growth potential in resource development, property segments, along with macro recovery, though 3Q result shows sluggish growth in metallurgical engineering and construction business.

Keeps earnings forecast at CNY3.94 billion (+54.4% on year) for 2009, CNY6.31 billion (+27.8% on year) for 2010, CNY7.86 billion (+24.4% on-year) for 2011.

Source: Dow Jones Newswire

[winston]

Ha Ha ...

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SOUTH CHINA MORNING POST

-- A small Hong Kong-based privately-owned engineering contractor Far East Aluminium Works has launched insolvency proceedings against China state-owned China Metallurgical Group Corp to recover unpaid debt, in an unusally aggressive legal move by a local companies against a state giant. China Metallurgical Group is the majority shareholder of Metallurgical Corp of China

[winston]

Small position from IPO

DJ MARKET TALK: Metallurgical May Rise On CNY33.75B Project Deals

0933 [Dow Jones] Metallurgical Corp. of China (1618.HK) may rise after company says 2 of its units have signed framework agreements with county and municipal governments of Anhui province to build construction projects worth combined total of CNY33.75 billion.

"The news should support some buying interest in the stock, especially as it is still trading far below its IPO price," says ICBC International's Ernie Hon. Stock listed on HK Sept. 24, with IPO price of HK$6.35, vs ending Monday +4.1% at HK$4.53. Hon tips stock to rise by around 3% today.

Source: Dow Jones Newswire