一年青春就这样了……

 

UBS ACTS AS JOINT SPONSOR AND JOINT BOOKRUNNER ON US$5.5 BILLION DUAL-LISTING INITIAL PUBLIC OFFERING FOR CHINA RAILWAY GROUP LIMITED

This US$5.5 billion IPO for China Railway Group Limited ("China Railway" or the Company") includes a US$3.0 billion A share IPO then a US$2.5 billion (before the over-allotment option) H share IPO. UBS Securities acts as joint sponsor and joint bookrunner on the US$3.0 billion A share IPO and UBS Investment Bank acts as joint global coordinator, joint bookrunner, joint lead manager and joint sponsor on US$2.5 billion (before the over-allotment option) H share IPO.

On 21 November 2007, China Railway successfully priced its US$3.0 billion (RMB22.4 billion) A share IPO at offering price of RMB4.80 per share. The Company’s A shares started trading on the Shanghai Stock Exchange under the ticker of 601390 CH on 3 December 2007.

On 30 November 2007, China Railway also successfully priced its US$2.5 billion (HK$19.2 billion) H share IPO at offering price of HK$5.78 per share, with an over-allotment option to increase the size of the offering to US$2.8 billion (HK$22.1 billion) on the Hong Kong Stock Exchange ("HKSE"). The Company’s H shares are expected to commence trading on the main board of the HKSE under the ticker of 390 HK on 7 December 2007. The offering price of HK$5.78 per share is at the top end of the price range of HK$5.03 to HK$5.78, representing a 2008E PE ratio of 24.2x (based on the UBS research estimate) before the over-allotment option.

Transaction Highlights:

•       This is the largest equity offering for an infrastructure company in Asia ex-Japan
•       This transaction represents the first simultaneous “first A then H” share offerings ever in history and is also the first contemporaneous “A and H” offering completed  by UBS
•       It is also the third deal UBS Securities had launched into the Chinese A-share market since the launch of its operation in February 2007. UBS Securities maintains as the fourth largest IPO house in China, after completing this deal
•       This transaction has demonstrated the advantage of UBS owning its operating platform both in China and internationally. This is the only dual listing completed by a global investment bank so far in both the Chinese and international markets.

A share offering:

The A share IPO is the largest IPO in China, in terms of subscription money frozen. The online offering was approximately 186.8x covered, with total demand of RMB2.93 trillion (US$397 bn). This is the largest online demand generated ever in the Chinese A-share market. The offline placement was approximately 64.1x covered, with orders from 340 high quality accounts, generating RMB431.6bn (USD$58.4 bn) of demand. The offer price of RMB4.80 per share, at the top end of the price range of RMB4.00-RMB4.80 per share, represents FY07 P/E of 26.7x (based on the Company’s estimates in the prospectus) before the H share offering.

H share offering:

Despite the volatile market conditions during the marketing period, the international tranche of the H share offering was over 48x subscribed on a post-clawback, ex-cornerstones and pre-greenshoe basis, attracting orders from over 560 accounts globally and drawing a total demand of over US$70 billion. Nine cornerstone investors including China Life, GIC, Henderson, Kerry Group, Sun Hun Kai, Wharf, Rocket Capital, Och-ziff and China Investment Corporation were brought into the deal, taking up an aggregate of 16.7% of the transaction (before the over-allotment option).

The Hong Kong Public Offering (“HKPO”) was 209x oversubscribed and triggered a full clawback of 25%. HKPO received significant interests with frozen subscription money totaling HK$406 billion, representing the 4th largest HKPO and UBS Investment Bank’s fifth deal out of the top 10 HKPOs since 2000 in terms of subscription money received. About 760,000 applications were received, the highest number of applications among all of the HKPOs in 2007. It also received the highest number of online application among all of the HKPOs in 2007.

About China Railway:

China Railway is the largest integrated construction group in the PRC and in Asia and the third largest construction contractor in the world, based on total contracting revenue in 2006, and a Fortune Global 500 company. The Company offers a full range of construction-related services, including infrastructure construction, survey and design and consulting services and engineering equipment and component manufacturing, which enables it to provide integrated one-stop solutions to its customers and compete effectively for large-scale and complex projects. The Company has enjoyed a leading market position in the railway construction industry in the PRC since the 1950s. The Company has also established a growing international presence, having undertaken more than 230 projects across more than 55 countries and regions globally. China Railway has also expanded into property development, railway and road investment and operation projects, mining and other ancillary businesses.