HONG KONG -- Newly spun-off China Railway Construction unit CRCC High-Tech Equipment had a rough maiden session Wednesday in the stock market here, indicating weak demand from cautious investors.
The stock opened at 4.91 Hong Kong dollars, below the HK$5.25 initial public offering price, and closed down 10.1% at HK$4.72.
Some 531.9 million shares were put on the market, and the company raised HK$2.65 billion ($348 million) in Hong Kong, which it will use in part to bolster technology development.
Rail stocks have underperformed lately in the Hong Kong bourse, despite Chinese policies like the "One Belt, One Road" infrastructure initiative giving shares some support. Those programs "will unfold in the long term, and the benefits will not be realized immediately," said Ben Kwong, director and head of research at brokerage KGI Asia.
CRCC High-Tech Equipment is China's largest rail maintenance equipment maker, with a roughly 80% market share at the end of 2014. The company also provides track upkeep services and seeks to expand overseas in the future.