(Yicai) Dec. 30 -- Air China Cargo, the air freight subsidiary of state-owned aviation giant Air China Group, raised CNY3.5 billion (USD479.5 million) in its debut on the Shenzhen stock exchange today, becoming the largest new share sale on the mainland this year, with its stock price surging almost five-and-a-half times in value.

Air China Cargo’s share price [SHE:001391] soared 443.5 percent from its issue price of CNY2.30 to hit a high of CNY12.50 (USD1.71) during intraday trading. By the end of the day, the stock closed up 304 percent at CNY9.30, giving the company a market valuation of CNY111.7 billion (USD15.3 billion).

The funds raised will mainly be used to purchase aircraft and spare engines, improve the company's integrated logistics capabilities and for information technology and digitalization projects, the Beijing-based firm said in its IPO prospectus.

After the IPO, Air China Group will hold a 40 percent stake in Air China Cargo and remain its largest shareholder. Cainiao, the logistics arm of e-commerce giant Alibaba Group Holding, will hold a 13.4 percent stake, making it the second largest stakeholder, followed by Hong Kong airline Cathay Pacific Airways with 10.9 percent equity.

Air China Cargo saw an upswing in its performance this year, as demand for air freight bounced back after an unsettled few years during the Covid-19 pandemic. Net profit soared 71 percent in the first three quarters from the same period last year to CNY1.1 billion (USD150.7 million), and revenue surged 45 percent to CNY14.2 billion (USD1.9 billion), according to the prospectus.

It is a big improvement from last year, when net profit plunged 63 percent year on year to CNY1.2 billion (USD164.4 million) and revenue tumbled 35 percent to CNY14.9 billion. This was mainly a result of the restrictions on air cargo capacity imposed during the pandemic gradually easing and the industry slowly returning to normal.

Editor: Kim Taylor