Dragon Crown releases details of listing on HKSE Main Board

The group aims global offering of 275mn new shares at the range of HK$1 to HK$1.40 per share.

Dragon Crown Group Holdings Limited (“Dragon Crown” or the “Group”), a leading integrated terminal service provider in the PRC specialising in the storage and handling of liquid chemical products, on Sunday announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited (“HKSE”).

Dragon Crown intends to offer 275,000,000 new shares (subject to the over-allotment option) in aggregate with 247,500,000 shares, or 90% of the offered shares, for international placing and 27,500,000 shares, or 10% of the offered shares for the public offer in Hong Kong. The offered new shares will be priced at a range of HK$1.0 to HK$1.40 per share. Assuming the offer price is HK$1.20 per share (being the mid-point of the offer price range) and that the over-allotment option is not exercised, net proceeds from the global offering will be approximately HK$301.8 million. The public offer will begin on 30 May 2011 (Monday) and end at noon on 2 June 2011 (Thursday).

Dealing in the offered shares is expected to commence on the Main Board of HKSE on 10 June 2011 (Friday) under the stock code 935. Shares will be traded in board lots of 2,000 shares. China Everbright Capital Limited is the Sponsor and China Everbright Securities (HK) Limited is the Sole Global Coordinator, Sole Bookrunner and Sole Lead Manager of the listing, according to a Dragon Crown report.

Dragon Crown specialises in terminal and storage services for liquid chemicals, including those classified as Category A dangerous chemicals. The Group offers comprehensive services ranging from the loading and discharge of liquid chemical products at its jetties and storage of liquid chemicals at its tank farm, to delivery of such products by utilising its dedicated pipelines and other basic terminal infrastructure.

Dragon Crown’s three jetties in Nanjing, Tianjin and Ningbo have a total annual designed throughput of over 3.0 million metric tonnes.

Starting its first logistics service for liquid chemical products in 1990, Dragon Crown enjoys an important early mover advantage within this fast-growing industry. As the Group owns its private terminal facilities and has exclusive rights to use its dedicated coastline next to the terminal, it is able to better manage operation costs and enjoys greater flexibility for future business expansion.

Dragon Crown is also a major integrated liquid chemical storage and terminal service provider in Nanjing Chemical Industry Park, the biggest chemical industrial park in the Yangtze River Delta and one of the most important global production bases for acetic acid. The Group enjoys a strategic location advantage in the Nanjing Chemical Industry Park because of its proximity to Celanese, a leading producer of acetyl products and the world’s largest producer of vinyl acetate monomer. The Group has secured three15-year long-term service agreements with minimum throughput volume with Celanese’s subsidiaries, which provides it with a sustainable and predictable operating cash flow to finance its future expansion in the fast-growing-industry. The Group will proactively expand its customer base in Nanjing and other coastal areas.

Mr Ng Wai Man, Chairman and Executive Director of Dragon Crown, said, “As the petroleum and chemical industries in the PRC are growing rapidly and multinational chemical companies tend to use third-party logistics service, we are well-positioned to grasp the ample growth opportunities in this high-entry-barrier industry, leveraging our strong credibility for handling chemicals safely and efficiently.”

The Group has already reserved land with a site area of around 80,000 sq m in Nanjing Chemical industry Park to expand its terminal business, including construction of its third jetty and dedicated railway system in the park. It also plans to build 19 storage tanks and other associated facilities in the industry park with a total capacity of 43,000 m3.

Mr Ting Yian Ann, CEO and Executive Director of Dragon Crown, concluded, “We are confident that by replicating our successful business model in other coastal regions in the PRC, further enhancing our service portfolio and vertically integrating our business, we will be able to expand our market share and grow healthily as one of the leading integrated liquid chemical terminal service providers.”