A small automotive firm is hoping to succeed where a high-profile London jeweller failed last week by pushing ahead with a share offering amid a market downturn.
Its global bookrunner says it will keep pricing on the low side to attract investors.
Guotai Junan, the sole global co-ordinator for Xiezhong International, an automotive heating and cooling system supplier on the mainland, said the firm may well succeed where three others have failed in the past two weeks alone.
That's because Xiezhong's valuation is about 60 per cent lower than its mainland peers, says Guotai Junan.
'Xiezhong is valued at between seven and 10 times projected earnings, while most mainland companies of the same nature are trading at between 15 and 20 times,' said Donny Wong, Guotai Junan's corporate finance director.
However, Wong dismissed suggestions that Xiezhong was desperate to raise funds, saying firms tended to be valued more highly on the mainland than in Hong Kong. That meant they tended to trade at a premium on the mainland, he said.