October 16, 2006

Aquaculture company becomes China's most expensive stock

Two weeks after it began listing on the Shenzhen Stock Exchange, Dalian Zhangzidao Fishery Group Co. Ltd, an aquaculture company, has become the most expensive stock in China among the more than 1,300 companies listed.

Shares of Zhangzidao Fishery are now at RMB 70.65 (US$8.9),

Shares of the fishery have gone up 14 percent since it first began trading on Sep 28 and the stock has already doubled its offer price of RMB 25 (US$3.16) on its debut.

The industry clearly has high hopes for the fishery, with at least one security company predicting net income for Zhangzidao Fishery rising 26 percent in 2006 from a year earlier.

The fishery managed to raise RMB 707.5 million (US$89.4 million) in its first-time stock offering. The raised capital would go towards expanding its sea fishery business and setting up a seafood trading centre.

Zhangzidao is involved in the large scale cultivation and processing of shrimp, shellfish, abalone, sea cucumber and other seafood. The company is currently one of the largest aquaculture companies in China and takes the lead in aquaculture area cultivated and production in the country.

As China's economy continues hurtling forward, incomes have risen and so have appetites for high-end seafood.

The potential for growth in seafood consumption is great in China as it is only a fraction of that in South Korea and Japan, experts said.