Zoomlion | China--Changsha Zoomlion Rises 8% on Debut

HONG KONG—Machinery maker Changsha Zoomlion Heavy Industry Science & Technology Development Co. rose 8% on its Hong Kong stock exchange debut, boosted by investor optimism about China's economic growth.

The IPO was the third-largest in Hong Kong in the fourth quarter, after AIA Group Ltd.'s $20.5 billion deal in October, and Chinese shipbuilder China Rongsheng Heavy Industries Group Holdings Ltd.'s US$1.8 billion offering last month, according to Dealogic.

Zoomlion could raise as much as $1.929 billion if an overallotment option amounting to 15% of the base deal is fully exercised.

The stock ended Thursday at 16.18 Hong Kong dollars (US$2.08) from its initial public offering price of HK$14.98 in what was a down day for the broader market. The benchmark Hang Seng Index shed 0.6% to 22902.97.

Core Pacific-Yamaichi analyst Wesley Yu said he is optimistic about Changsha Zoomlion's share-price performance because the company, which makes machinery for construction, energy and transportation projects, is positioned to benefit from China's strong demand.

"China's urbanization rate is expected to increase from 46.6% in 2009 to 50% in 2012," Mr. Yu said. "Transportation infrastructure investment and property supply will increase in the coming years, which will sustain demand for construction machinery."

Changsha Zoomlion, which is also listed on the Shenzhen Stock Exchange, raised $1.68 billion in its Hong Kong IPO after pricing the shares toward the bottom of the indicative range of HK$13.98-HK$18.98.

J.P. Morgan Chase & Co., China International Capital Corp., and Goldman Sachs Group Inc. are the joint global coordinators of its IPO.

Write to Prudence Ho at prudence.ho@dowjones.com

Source: The wall street journal