CSMC gets lukewarm response after debut

Shares in China-based chip foundry CSMC Technologies Corp. (0597.HK) saw active trading since it debuted Friday.

It was the third most actively traded share by volume, with over 50 million shares having changed hands.

It opened flat at HK$0.5 on Hong Kong's main board Friday, compared with their initial offering price.

Earlier CSMC sold 621 million shares at 50 HK cents to raise HK$310.5 million. The offer price valued the stock at 1.0 times 2004 book value, or 14.8 times projected 2004 earnings, on a fully diluted basis.

The retail tranche, representing 10 percent of the total number of shares offered, was 3.1 times subscribed and the international tranche was moderately oversubscribed.

Existing shareholders, mainly private equity firms including 3i Group PLC., International Finance Corp. and Templeton Strategic Emerging Markets Fund, were allocated 339.6 million shares from the institutional tranche, which was 90 percent of the total number of shares offered.

CSMC failed in an earlier attempt to go public in late June, when the Wuxi-based company offered the same amount of shares but at HK$73 to HK$1.10 each to raise as much as HK$683.1 million.

CSMC makes semiconductor chips out of 6-inch wafers, using 1.5 micron to 0.4 micron process technologies, considered to be at the low end of the technology curve. Its chips are used in televisions and other consumer electronic products.

Following the listing, China Resources Logic Ltd. (1193.HK) holds 25.9 percent of CSMC, while Cayman-incorporated Central Semiconductor Manufacturing Corp., an entity controlled by CSMC's management, holds 26.3 percent. Singapore's Chartered Semiconductor Manufacturing Ltd. has a 5.4 percent interest.

Source: Shenzhen Daily-Agencies