Shanghai to Beijing high speed rail operator may be readying for an IPO this year, documents show

Daniel Ren
Shanghai to Beijing high speed rail operator may be readying for an IPO this year, documents show

The operator of the high-speed railway linking Shanghai and Beijing has taken its first step towards a mainland initial public offering after receiving pre-listing tutorial services from a brokerage.

According to a document ­published by the Beijing branch of the China Securities Regulatory Commission (CSRC) on Tuesday, Beijing-Shanghai High-Speed Railway is being advised by CSC Financial on a listing application, which is expected to be completed this year.

On the mainland, a potential listing candidate is required to ­receive training about relevant laws and rules before it formally files an application with the ­regulator. The procedure can take three to 12 months to complete.

The CSRC wants to ensure potential applicants comply with regulations when submitting their documents.

“Given its bulk, the mainland stock market will receive another state-owned giant when the high-speed railway operator is listed,” said Dong Jun, a Shanghai-based hedge fund manager.

“A high-speed railway between Shanghai and Beijing is ­certainly of great significance to the national economy and its ­operator’s listing will draw the attention of the investing public.”

The 1,318km railway linking the mainland’s two most developed cities has carried 940 million passengers since operations began in June 2011, according to its state-owned parent, China Railway Corporation.

China Business News, citing publicly available figures, said the operator had a combined profit of 31.2 billion yuan (US$4.66 billion) between 2014 and 2017.

Beijing has been striving to ­securitise railway assets to raise public capital for further expansion.

Beijing-Shanghai High-Speed Railway has 11 shareholders with China Railway holding 51.7 per cent. Other shareholders include the National Social Security Fund pension scheme and Ping An ­Insurance.

The listing plan comes on the heels of a strong rally on mainland stock markets recently.

The Shanghai Composite Index has jumped 18 per cent this year, closing at 2,941.52 points on Tuesday.

The gauge was likely to breach the important 3,000-point level soon, analysts said.

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