CSSC (Hong Kong) Shipping Company Limited (3877), the first shipyard-affiliated leasing company in Greater China and one of the world’s leading ship leasing companies announced the details of its global offering, The offer price is between HKD $1.34 and HKD $1.42 and the IPO is expected to raise up to HKD $2.178 billion, assuming the Over-allotment Option is not exercised. The proceeds will be mainly used to strengthen the capital base of its ship leasing business and support its sale-and-leaseback projects in respect of marine clean energy equipment. CICC is leading the offering as sole sponsor.
Found in 2012, CSSC (Hong Kong) Shipping Company Limited (the “Company”) is the only leasing company under CSSC Group, world’s second largest shipbuilding group who offers customized and flexible ship leasing solutions that suit our customers’ different needs. According to prospectus, the Company ranked fourth in the global ship leasing industry in terms of revenue in 2018 with a market share of 3.9% and first in the global non-bank ship leasing industry with a market share of 14.8%.
During the record period, the Company achieved rapid growth. From 2016 to 2018, the Company realized revenue of HKD $1.032 billion, HKD $1.330 billion and HKD $2.105 billion respectively, with a compound annual growth rate of 42.8%. The operating profit of the Company recorded HKD $231 million, HKD $360 million and HKD $583 million respectively and net profit was HKD $432 million, HKD $603 million and HKD $707 million, respectively.
“We have a diversified, modern and young vessel fleet. As at 31 December 2018, CSSC (Hong Kong) owned a total of 65 vessels, including 43 vessels under finance lease arrangements and 22 vessels under operating lease arrangements, with an average age of approximately two years. Our vessel fleet as at 31 December 2018 comprised 25 bulk carriers, 14 tankers, 10 container vessels, 9 special tonnage carriers and 7 marine LNG/LPG units.” CSSC (Hong Kong) noted in its filling.
To strengthen the core competitiveness, the Company prudently allocates, adjusts and optimizes the proportion of various types of ships according to the industry situation and customer demand, so that the ship asset portfolio can basically cover the mainstream ship type with strong liquidity and hedge the risk under severe fluctuations.
As the only subsidiary leasing company of CSSC Group, the leading world-class shipbuilding enterprise, the Company endowed with unique advantages. During 2018 CSSC Group together with its subsidiaries built more than 40 types of ships and deliver 9.1 million deadweight tons of new ships, accounting for 11.3% of the global market share.
Rely on the parent company, CSSC (Hong Kong) possesses deep understanding not only in shipping but also in shipbuilding. Accordingly, the Company has got professionality in shipping industry thus make more far-sighted decisions than most of the competitors. “We purchased several newly-built 64,000-tonne bulk carriers in 2013 at low prices, and successfully resold two of them in 2014 at an investment return of approximately 20%.”, the prospectus revealed.
It is also important to note that, for leasing company, credibility of the client is rather important. Client with high credibility and adequate cash flow can somehow reduce the performance risk of leasing company to a certain extent.
The customers of CSSC (Hong Kong) are of high quality and they include a French container transport giant; the world’s largest refined oil transporter, which is a listed company in the United States, one of the world’s largest grain merchants and a Fortune Global 500 company, the largest bulk carrier owner and a listed company in the United States; two transport giants for the oil and gas industries, which are listed companies in the United States; and the largest integrated conglomerate in Singapore. The high-quality clients greatly reduce the credit risk faced by the leasing business and provides an important guarantee for the overall stable and sustainable development of the enterprise.
With a solid fundamental, the Company seems rather confident for the future which can also be proved through its dividend policy mentioned in prospectus “We intend to, after the Listing, adopt a general dividend policy of declaring and paying dividends on an annual basis of approximately 30% of our distributable net profit attributable to our Shareholders.” Such a bold movement somehow indicate strong confident of the Management.
“As the first shipyard-affiliated leasing company in Greater China, the Company is able to seize various industry development opportunities as well as regional and national policies. Leveraging our strong expertise and extensive experience in the marine industry, comprehensive risk management system and continuous optimization of asset portfolio, we are one of the world’s leading ship leasing companies and enjoy wide recognition. Looking ahead, we will cope with changes in the global energy landscape, comprehensively deploy the new energy industry chain, expand our financing channels and stabilize our finance costs, continue to focus on ship leasing, develop professional and high-value businesses and continue to develop our non-ship leasing business.” Yang Li, the Executive Director and Chairman of the Board of Directors of CSSC (Hong Kong) noted during the press conference.
Source: ACN Newswire