China Rongsheng HK IPO more than 22.6 times subscribed

Final offer price set at HK$8 per share as trading starts 19 November 2010.

China Rongsheng Heavy Industries Group Holdings Limited (“Rongsheng” or the “Group”), a large heavy industries group in China, on Thursday announced the allotment results of its Global Offering, which has received a positive market response, and the Hong Kong Public Offering has recorded an oversubscription rate of 22.6 times. The offer price has been set at HK$8 per share, according to a China Rongsheng report.

Rongsheng issued a total of 1,400,000,000 shares and Fine Profit sold a total of 350,000,000 under the Global Offering, of which 92.5% was for the International Offering and the remaining 7.5% for Hong Kong Public Offering. Net proceeds from the offer, before the exercise of the over-allocation option and after deducting underwriting fees and the estimated expenses relating to the global offering, would be approximately HK$11.6 billion, which makes it the largest PRC privately-owned enterprise IPO in Hong Kong in 2010.

Mr Chen Qiang, Chief Executive Officer and Executive Director of Rongsheng, said, “The strong response from investors demonstrates their understanding of the business strategies of the Group and recognition of the sustained development potential of the industry. Backed by the financing platform of international financial markets, the Group is better positioned to seize the opportunities brought by the booming energy sector by accelerating its development with the aim to become a leading global heavy industries group.”

Established in 2005, Rongsheng is headquartered in Shanghai, with production facilities located in Nantong of Jiangsu Province and Hefei of Anhui Province. The Group’s current business operations span over four segments, namely shipbuilding, offshore engineering, marine engine building and engineering machinery. Its products include bulk carriers, crude oil tankers, containerships, offshore engineering products, low-speed marine diesel engines and small to mid-size excavators and cranes used for construction and mining.

According to Clarkson Research, the Group was ranked first among privately-owned PRC shipbuilders and second among all PRC shipbuilders in terms of total order book in DWT as at August 1, 2010. It was also ranked first globally, in terms of orders for very large ore carriers (VLOC), with about 25.4% of the total global orders for VLOCs of over 300,000 DWT. The orders for Suezmax crude oil tankers accounted for approximately 13.8% of the total global orders as measured in DWT, making it first in the PRC and second globally.

The Group has leveraged its expertise, management experience and deep understanding of the market to integrate its resources effectively, which resulted in the rapid surge of its businesses with a CAGR of 278% from 2007 to 2009. In 2009, the Group’s revenue reached RMB9.47 billion with net profit at RMB 1.3 billion and a gross profit margin of 19.5%. Its after-tax annual profits is expected to reach RMB1.6 billion in 2010.

Mr Chen concluded, “As a leading heavy industries group in the PRC, we have established a solid customer base and strong product R&D capability. Looking ahead, we will ride on our own strength to actively expand the offshore engineering and marine engine building businesses to capture the opportunities arising from the increasing demand for energy and the development of infrastructure in the PRC. This strategy should enable us to further grow our business and generate satisfactory returns for shareholders.”

Trading of Rongsheng shares on the Main Board of HKSE will begin on 19 November 2010 (Friday) in board lots of 500 shares under the stock code of 1101.

Morgan Stanley Asia Limited, CCB International Capital Limited and J.P. Morgan Securities (Asia Pacific) Limited are the Joint Sponsors of the listing. Morgan Stanley Asia Limited, CCB International Capital Limited, J.P. Morgan Securities (Asia Pacific) Limited, BOCI Asia Limited and Deutsche Bank AG, Hong Kong Branch are the Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers.