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HONG KONG - PetroChina is planning the nation's biggest share sale this year to raise as much as US$5.6 billion ($7.4 billion) in Shanghai for overseas acquisitions, increased oil drilling and refinery construction.
The company yesterday overtook Royal Dutch Shell as the world's second-largest oil company by market value, behind Exxon Mobil, after announcing the plan to list on the Chinese mainland for the first time.
As many as four billion shares will be sold, Beijing-based PetroChina said.
The oil producer is tapping an equity market that has doubled in value in the past six months, making it Asia's most expensive.
PetroChina, whose Hong Kong shares have risen ninefold since an April 2000 initial public offering, plans to spend 40 billion yuan ($7 billion) developing the country's biggest oil discovery in almost half a century.
"PetroChina is one of the best companies in China," said Agnes Deng, who helps manage US$3.5 billion at Standard Life Investments Asia in Hong Kong. "It's got solid fundamentals."
Chinese shares trade at 48 times earnings, compared with 17 times for Hong Kong's Hang Seng Index, that's why "people get so excited by companies like PetroChina going back to an A-share listing".
Shares of PetroChina today rose as much as 8.2 per cent to HK$12.08 ($2.04), poised for a record close.
PetroChina, which trades at 15 times earnings, is valued at US$274 billion, compared with US$257 billion for Shell and US$484 billion for Exxon Mobil.
- BLOOMBERG
