Dynasty offer 625 times oversubscribed
Nichole Chan and Hui Yuk-min
Dynasty Fine Wines Group's initial public offering - the first on the main board this year - was swallowed with relish. The retail offer, representing 10 per cent of the $675 million float, would be at least 625 times oversubscribed, locking up funds of more than $42.18 billion, according to sources.
The institutional portion - 90 per cent of the offer - was about 30 times oversubscribed on a pre-clawback basis, one source said.
Given the robust response, many expect the offering will be priced close to the top end of the indicative range of $1.75 to $2.25 per share. Some hinted a grey market price of between $2.50 and $2.92 when the share debuts on Wednesday.
Market watchers said investors were attracted to Dynasty because of promising prospects in a blooming consumption market in the mainland.
'As Chinese are becoming more affluent, they are also getting more health-conscious and shifting their habits from drinking the strong Chinese liquor to grape wine,' one analyst said. 'Investors are also confident to invest in a venture with Remy Cointreau.'
After Dynasty's listing, Tianjin Development and Remy Cointreau will own 46.5 per cent and 24.75 per cent of the company, respectively.
'On the valuation front, the offer price, even at the top end, does not seem expensive at all,' the analyst said. The indicative offer price is 9.72 to 12.5 times last year's estimated earnings of 18 cents per share.