Yangzijiang's financing arm makes trading debut on SGX
Yangzijiang Financial Holdings closes down 10% while parent firm Yangzijiang Shipbuilding ends up 1.14%
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The financing arm of Yangzijiang Shipbuilding began trading on the Singapore Exchange (SGX) mainboard at 69 cents yesterday.
Yangzijiang Financial Holdings shares closed the day at 62 cents, down 10 per cent, while Yangzijiang Shipbuilding ended at 89 cents, up 1.14 per cent.
The separate listing of Yangzijiang Financial Holdings, which was backed by 100 per cent of shareholders of Yangzijiang Shipbuilding, was to allow investors to enjoy fairer valuations for each business, said Mr Ren Yuanlin, chairman of the new entity.
No capital was raised during the listing, with Yangzijiang Shipbuilding investors getting shares of the financing firm on a one-to-one basis.
The two businesses will be run by separate management teams, with Mr Ren at the helm of the newly listed entity, and the shipbuilding segment under the control of his son, Mr Ren Letian.
Mr Ren Yuanlin told The Straits Times that it was natural to spin off the financing arm as both businesses have good potential to grow.
Yangzijiang Financial Holdings generates returns from bonds and private equity as well as fee income from funding small businesses and individual proprietors in China.
It will now expand its operations by providing wealth management services to Chinese citizens living overseas, Mr Ren said.
Meanwhile, the shipbuilding firm will channel resources towards producing more fuel-efficient vessels and expanding its bulk shipping business to take advantage of higher freight rates.
Mr Ren said receiving strong support from SGX was a deciding factor for Yangzijiang Financial Holdings in going public in Singapore despite greater volatility in the stock market.
He added that the company is prepared to buy back its shares should the market fail to value the business correctly.
Yangzijiang Financial Holdings' opening price of 69 cents represented a discount of 36 per cent to its net tangible asset per share of around $1.08.
The company intends to recommend a policy of paying out at least 30 per cent of its net profits as dividends over the next three years, listing documents showed.
The two businesses will be run by separate management teams, with Mr Ren Yuanlin at the helm of the newly listed entity, and the shipbuilding segment under the control of his son, Mr Ren Letian.
