CNR (601299.SS), which along with China South Locomotive & Rolling Stock Corp (601766.SS)(1766.HK) is one of the country's two big train makers, sold 2.5 billion yuan-denominated A shares, or about 30 percent of its expanded capital, at 5.56 yuan a share to raise funds for upgrading its technology.
CNR joined other Chinese firms in a rush to tap buoyant stock markets this year in the mainland and Hong Kong, while China's regulators are speeding up IPO approvals to boost equity supply as part of an effort to prevent asset price bubbles.
Stock market debuts have traditionally attracted feverish speculative buying by mainland investors, although first-day gains by new listings in recent months have been relatively subdued.
A bank lending spree in the first half of the year that pumped up market liquidity has been reined in, while pent-up demand for new shares has been met by a full pipeline of new listings, after a 10-month share sale ban was lifted in June.
Several of this year's new listings have slipped below their IPO prices in recent days, including China Merchants Securities Co (600999.SS), adding to wariness over market debuts.
CNR's IPO price valued the shares at 49 times 2008 earnings on a fully diluted basis, in line with China South Locomotive but well above the overall Shanghai market's .SSEC price-earnings multiple of about 28.
But analysts have said the high valuations of China's train makers may not be excessive, given the rapid development of China's railway network, which is driving demand for new rail vehicles as well as vehicle upgrades and refurbishment services.
CNR hired China International Capital Corp, Huatai Securities and Huarong Securities to underwrite the IPO.
