(Yicai Global) Jan. 16 -- Beijing-Shanghai High Speed Railway surged by the maximum allowed under stock exchange rules as shares of China's most profitable rail operator made their market debut today.

The company's stock price [SHA:601816] rose 44 percent at the opening bell, and closed 39 percent higher at CNY6.77 (98 US cents). The initial offering price was CNY4.88 a share.

Founded in late 2007, the firm's main assets are the 1,318-kilometer high-speed rail line and stations that link China's political and financial capitals. The railroad bisects the most developed eastern region, and links the Bohai Economic Rim and the Yangtze River Delta, two of the country's main economic zones, so profits at the firm have continued to grow since the line opened in June 2011.

Beijing-Shanghai High Speed Railway had net profit of CNY9.52 billion (USD1.38 billion) on revenue of CNY25 billion in the nine months through September, according to the Beijing-based company's initial public offering prospectus. Its IPO pricing gave a price-earnings ratio of 23.39 times.

The company issued 6.3 billion shares, raising CNY30.7 billion, which made it one of the biggest listings in Shanghai in recent years. It will be added to the MSCI China All Shares Index and the MSCI China Index on Feb. 6, US stock index compiler MSCI said.

The Beijing to Shanghai link has run safely for more than eight years and carried over 1.1 billion passengers. More than 40 pairs of high-speed trains sprint the line in 4.5 hours each day, with a one-way second class ticket costing CNY553 (USD80). In September 2017, it became the world's fastest commercial line, topping out at 350 kilometers an hour.

The company will use the net income through this IPO to buy 65.1 percent of the equity of a regional high-speed rail operating company that is still running in the red to form a Beijing-Shanghai railway high-speed railway network, per its prospectus.

The target company's price is CNY50 billion (USD7.3 billion), and Beijing-Shanghai High Speed Railway will pay the difference between the price and its IPO earning to complete the purchase, it said.

Editor: Ben Armour