Planning for block trades in Sun Art Retail

HONG KONG (Dow Jones Investment Banker) – In sharp contrast to most other IPOs in Hong Kong this year, and as smaller competitor Beijing Jingkelong Co Ltd has just had its application for a listing in Shanghai rejected by China’s Securities Regulatory Commission (CSRC), mainland hypermarket operator Sun Art Retail Group Limited has posted a 26% gain since its US$1.1 billion IPO last July. Nine blue-chip cornerstone investors came in at the time of the offering for a combined US$420 million. Some of these may now perhaps consider exiting, and locking in capital gains after the expiry of their lock-ups early next year. We look at the stock’s valuation and liquidity, and at which firms might best be positioned to print a trade. read

Noble Group to rock Singapore with ag float

HONG KONG (Dow Jones Investment Banker) – Singapore-listed Noble Group Ltd. likes to point out that its net book value has grown at a compound annual rate of 27% since its listing in 1997. However, it is currently trading on a price-to-book multiple of only 1.47x and a forward P/E below 10x, well below comparables. The proposed listing of its sizable and profitable agricultural business in Singapore, on which JPMorgan is advising, should be accretive for the group and result in a re-rating. read

Will Brunei’s DST answer the call to float?

HONG KONG (Dow Jones Investment Banker) – As one of Asia’s richest nations, the Sultanate of Brunei Darussalam relies on a significant expatriate population for the production of offshore oil. That, in turn, has fuelled the growth of its major mobile telecommunications provider, Data Stream Technologies Communications (DST). But with penetration rates near saturation, DST needs to re-invent itself and offer value-added products and services besides roaming. With equity markets in turmoil, it could consider issuing an Islamic going-public convertible bond prior to a listing in Kuala Lumpur – or in Singapore, perhaps through a business trust. read

Betting on the Hong Kong Jockey Club’s Mark Six

HONG KONG (Dow Jones Investment Banker) – The Hong Kong Jockey Club provides sporting entertainment to the public through horse racing, football betting and the Mark Six lottery. It’s also one of the city’s largest taxpayers and a major non-government benefactor, donating more than US$125 million a year to charitable and community projects. With betting revenue fleeing to Macau’s casinos, and no other obvious sources of income on the horizon, a flotation of the lottery – a marginal business for the Club – through a business trust could provide significant additional resources to its operations, and non-profit activities, without materially altering its unusual corporate structure.

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An outline for PPR’s Asian PR pitch

HONG KONG (Dow Jones Investment Banker) – PPR SA’s refocusing is still a work in progress. The lack of growth at its legacy retailing business is affecting overall margins, and penalizing valuation. A flotation of part of the Asia-Pacific activities of its luxury arm, Gucci Group, in Hong Kong would boost its market capitalization, and create a vehicle to fund acquisitions in its fastest-growing region of operations.

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Memo to Bernard Arnault

HONG KONG (Dow Jones Investment Banker) – As the fortunes of the world’s top luxury goods companies increasingly hinge on growth in Asia, and with Prada SpA showing that Western companies can successfully tap the Hong Kong stock market, ECM bankers there have been actively pitching corporates from Europe and beyond to float in Asia.

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Reading the Tenfu tea leaves

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.

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A hot time in the Citic

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.

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They are heavy, they are brothers

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.

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Sheng Siong’s confusing IPO messages

HONG KONG (Dow Jones Investment Banker) – Supermarket operator Sheng Siong kicked off its domestic Singapore IPO on August 5 through OCBC Bank. The offer price is SGD0.33, translating into a deal size of US$96 million equivalent. Excluding a 15% overallotment option, the IPO comprises 351.5 million shares – representing just over 26% of the company – of which about 57% are for new money, with the balance being sold by the founding family.

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