Great Wall IPO bid turned down

By Jin Jing  |   2008-7-16  |     NEWSPAPER EDITION

GREAT Wall Motor Co Ltd's proposed initial public offering on China's mainland stock market has been rejected by the China Securities Regulatory Commission.

The nation's top securities regulatory body announced this on its Website late on Monday night without giving details.

Most analysts blamed the rejection on the lackluster stock market and a gloomy outlook for China's automobile industry, preventing the Hong Kong-listed Great Wall from returning to the mainland bourse.

Shares of Great Wall lost 8.7 percent to HK$5.2 (66 US cents) yesterday.

Baoding, Hebei Province-based Great Wall, China's top manufacturer of sports utility vehicles and pick-ups, planned to issue 120 million shares on the mainland stock market in the first half of this year, five years after a HK$1.5 billion IPO on the Hong Kong Stock Exchange in 2003.

The proposal would have made it China's first privately-owned car maker to be dual-listed in Hong Kong and on the mainland.

All the proceeds from the planned A share listing would have been part of a 2.8 billion yuan (US$411 million) investment in developing and producing core spare parts and passenger cars as well as strengthening engineering capability, Wei Jianjun, a board director of Great Wall said earlier.

"The rejection was expected because the timing was not good," said Wang Liusheng, an auto analyst from China Merchants Securities Co Ltd.

Sluggish market

"The government has been slowing down the issue of new share sales as it would worsen the already sluggish market by driving capital out," he added.

The Chinese government has been stepping up efforts such as cutting the stamp tax to help boost market confidence after the main stock market tumbled nearly 50 percent in the first half of this year.

Another five companies also failed to get IPO approval in the latest review.