CSCL plans US$1.3 billion Shanghai listing after 14-fold profit Increase

China Shipping Container Lines (CSCL), Asia's second-largest container line, hopes to raise US$1.3 billion with its forthcoming listing on the Shanghai Stock Exchange, reports Bloomberg.

Share sale money will be used to expand its fleet and repay loans, said the Hong Kong-listed company, which plans to issue CNY1.5 billion (US$198 million) in A-shares or 20 per cent of its capital.

The news came after the company issued first half results, which boasted of a 14-fold increase in profit year on year from CNY81.2 million to CNY1.16 billion. The huge profit was credited to a 20 per cent freight rate increase on Asia-Europe sea lanes.

CSCL's cost per container also fell seven per cent in the first half from a year earlier, as it used larger vessels and paid less for fuel because of a fall in prices, said the company.

Sales on Asia-Europe routes rose 31 per cent to CNY5.39 billion in the first half. On Pacific routes, sales climbed 6.4 per cent to CNY6.8 billion.

"China Shipping's performance will be even better in the second half," said Karen Chan, analyst for Credit Suisse, who forecast a full-year profit of CNY1.84 billion before the earnings announcement.

Credit Suisse also predicts container shipping rates may climb two per cent next year followed by a five per cent rise in 2009.