Two Chinese companies, China Shipping Container Lines Co Ltd (CSCL) and Tencent Holdings Ltd, had a mixed debut on the Hong Kong stock market yesterday.

CSCL, China's second biggest container lines, dropped 12 per cent below its offer price, according to Thursday's China Daily. But Tencent, China's largest instant messaging service provider, moved in a different direction as it jumped 12 per cent on its first trading day.

The two companies were also the most actively-traded counters in Hong Kong yesterday, taking up 28 per cent of the total turnover on the main board.

CSCL, based in Shanghai, is the world's 10th biggest container line, with a total capacity of more than 205,000 TEUs (twenty equivalent unit) at the end of last year, company sources said.

It raised US$985 million from an initial public offering (IPO) that kicked off in Hong Kong three weeks ago. Investors had shown strong interest in the stock, as its retail tranche was 53 times subscribed. Some analysts had expected the stock to rally by 5 to 10 per cent on the debut.

But a research report by Citigroup said that the share's offer price, at HK$3.175 (US$0.407) and 1.45 times the company's book value, was over-estimated and initiated a "sell" rating to the stock.

The share ended at HK$2.80 (US$0.358) yesterday.

Investors are most concerned with potential fluctuation of shipping prices, which is closely related to the macroeconomic climate, said an analyst with China Securities Co.

Recent moves by the Chinese authorities to tighten money supply and curb over-investment may have made overseas investors cautious. But the medium- and long-term outlook for China's economy is still rosy and that would add greater momentum to the shipping industry, he said.

CSCL operates 39 international lines and eight domestic sea routes, contributing about two-thirds of the revenue of the China Shipping group, which also operates oil tankers, bulk carriers, passenger ships and terminals.

As for Tencent, its dominant market share in the instant messaging industry in China and comparatively cheap offer price made it more favoured among investors yesterday.

The Shenzhen-based firm sold its IPO shares, which raised US$199 million, at 14.8 times the offer and forecast earnings of at least 444 million yuan (US$53.6 million) in 2004.

More than half of its revenues comes from providing games, news and other services to mobile phone users in China, company sources said.

Shares in Tencent closed at HK$4.15 yesterday (US$0.532), hitting a high of HK$4.625 (US$0.593) earlier in the day.

The stock was largely supported by institutional buying on expectation of rapid corporate growth, traders said.

(China Daily)