The European Chamber of Commerce in Hong Kong and the European Union Business Information Programme (EUBIP) hosted a breakfast session on 5 September at Club Lusitano, featuring members of the European Parliament and senior executives and leaders of the Hong Kong business community. I presented at the event on IPO opportunities in Hong Kong for European companies. read
HONG KONG (Dow Jones Investment Banker) – Claw-back rules for retail tranches in Hong Kong IPOs are a unique feature of that market. They bring an element of fairness between institutions and the general public; however, retail investors have increasingly shunned new issues and also now account for a smaller proportion of secondary trading, as compared with a few years ago. Now might perhaps be a good time to rethink those provisions, and to grant more flexibility to ECM bankers and issuers to allocate books of demand.
HONG KONG (Dow Jones Investment Banker) – Amid the largest drop for a month in the Hang Seng index, Tenfu (Cayman) Holdings Company Limited, a producer and retailer of tea products in China, has just started bookbuilding for its Hong Kong IPO of up to US$182 million. The deal, set to price on September 20, with listing on the 26th, is led by China International Capital Corp. (CICC), Credit Suisse, and Taiwan’s Polaris Securities.
Citic Securities formally started book building for its US$2 billion Hong Kong float on Friday. This is a marquee deal likely to generate a lot of interest. Investors have made a pile of money participating in IPOs of mainland financial institutions, and there is hope Citic can repeat that magic despite the challenging market conditions.
HONG KONG (Dow Jones Investment Banker) – The long-awaited equity offering by China’s CITIC Securities Company Limited is finally under way. The brokerage is looking to raise up to US$2 billion from investors, and secure a secondary listing in Hong Kong. Bookbuilding is set to start on September 16, for an October 6 closing. Although CITIC Securities has been listed on the Mainland since 2003, its preliminary filing with HKEx provides a fascinating glimpse into China’s domestic investment banking industry and the activities of one of the leading houses there.
Given the shabby state of markets, you might think that bankers would be wary of pitting two giant mainland firms from the same niche sector in head-to-head IPOs. But that is exactly what is going on with the duelling listings of Sany Heavy Industry and XCMG. Both are construction machinery makers looking to raise billions in a Hong Kong listing. Never mind that interest for one deal will likely cannibalise demand for the other, the floats are on a near identical timetable.
HONG KONG (Dow Jones Investment Banker) – Green tech Guodian Technology and Environment Group has reportedly appointed China International Capital Corp. for a proposed IPO of US$1 billion equivalent in Hong Kong by the end of the year. The company has size, and the backing of a well-known and connected parent, but its flotation could ultimately suffer from the dismal performance of China’s other renewable energy floats, which have left many an investor nursing painful losses.
HONG KONG (Dow Jones Investment Banker) – Trigiant Group Ltd. has just filed a web proof information pack (WPIP) with the Stock Exchange of Hong Kong, the first step towards its proposed IPO. Little information has filtered about the structure of the deal, but a quick round up of ECM desks indicates that the mandate wasn’t competitive. Despite a limited trading history, the company has posted impressive growth rates and enjoys significant market share in an industry it dominates alongside two major competitors. At the same time, its reliance on a small number of clients and suppliers, and its high gearing, raise questions about the sustainability of its business model, as do some troubling past financial practices.
XCMG Construction Machinery is due to start investor education today for a proposed US$1.5 billion Hong Kong IPO. If it proceeds it will be the first listing greater than US$1 billion to test Hong Kong public sentiment since the US sovereign ratings downgrade sent global markets into a major wobble. This is a large offer arriving amid conditions generously described as lukewarm.
HONG KONG (Dow Jones Investment Banker) – The board of San Miguel Corp., the Filipino beer-to-infrastructure conglomerate, approved the reorganization of its power business and an increase in its share capital on August 12. After exploring several options, including a possible backdoor listing, San Miguel has settled for an IPO in Manila of up to US$500 million for its 75% subsidiary SMC Global Power Holdings. Macro factors, as well as current expansion plans for the business, look attractive, but San Miguel shareholders are unlikely to gain much through the value arbitrage.
