By Jin Jing (China Daily)
Updated: 2007-11-21 10:44

China Railway, the country's largest construction company, announced yesterday it had set the price range of its A-share initial public offering (IPO) at 4 yuan to 4.8 yuan apiece and had begun the offline subscription.

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The price range is between 22.25 and 26.7 times the projected net profit in 2007, according to the company's statement to the Shanghai Stock Exchange yesterday.

The Beijing-based company plans to issue up to 4.675 billion A shares, 35 percent of which are to be sold to institutional investors, while 65 percent would go to retail investors.

The offline subscription would end and the online subscription would begin today.

According to the company, the proceeds would be used for purchasing equipment, building production lines, developing real estate and investing in railways.

The company is expected to list in Shanghai on December 3 and in Hong Kong on December 7. It would offer 3.326 billion shares in Hong Kong at between HK$5.03 and HK$5.78 per share.

"China Railway will benefit most from China's 11th Five-Year Plan (2006-2010)," Southwest Securities analyst Wang Wanjin said.

China would invest a total of 1.25 trillion yuan in railway infrastructure construction from 2006 to 2010, four times the amount of the previous five years.

The company has constructed two-thirds of the railway lines and more than 95 percent of the electrified railways in China.