Road operator unveils price for $946m offer
Anhui Expressway Co, China's first road operator to be listed overseas, has tentatively priced its shares between $1.59 and $1.92 each to raise up to $946.56 million.
The company, which began a global road show for its H-share offer on Monday, told investors it would float 35 per cent of the company in Hong Kong, or 493 million H shares.
Based on a price at the middle of the range of $1.75, the company would pitch a prospective price-to-earnings multiple of 29.2 times this year's earnings, Crosby Securities said in a research report distributed to investors.
The multiple was based on profit of 90.5 million yuan (about HK$84.29 million) projected by Crosby Securities, in the report.
In tandem with CEF Capital, Crosby Capital Markets is co-sponsors for the share sale.
The company, which has its eyes on three highways and one bridge as possible targets for takeovers, will launch a public offering in Hong Kong on October 31.
Investors were told that the company was coming to the market at a 31 per cent discount to its net asset value (NAV) per share of $2.55 as appraised by Crosby Securities, based on the middle of the price range for the share offer.
The company's prospective NAV was conservatively calculated based on traffic flow projections made. No provision for increases in road tolls were included in the figures.
Crosby Securities said: 'With forecast net cash of over 800 million yuan in 1998 and the full support from the Anhui provincial government with the preferential right to participate in other future highway projects in the province, this stock is actually worth more than the current NAV suggests.'