Fosun to join top debutants as orders top HK$230b for offer
Fosun International is set to become one of the hottest new listings this year, with the largest privately owned mainland group drawing more than HK$230 billion of orders for its HK$11.5 billion initial public offering.
'[The mainland] is still dominating the local equity market especially for retail, property and energy offerings,' a fund manager said. Interest in the offering from tycoons including Li Ka-shing and Lee Shau-kee also whetted investor appetites.
Demand from retail investors was at least 200 times greater than the shares available, a source close to the transaction said. The international offering was more than 50 times oversubscribed, he added.
Fosun is selling 12.5 billion shares for between HK$6.98 and HK$9.23 each. UBS, Morgan Stanley and China International Capital Corp are the underwriters.
'The offering will be priced at the top of the range at HK$9.23 per share, valuing the company at 27 times forecast earnings for this year,' another source said. Trading of Fosun shares is expected to start on July 16.
Companies doing business in the mainland are increasingly seeking funds to expand and investors are eagerly buying into share offerings. Hong Kong was the world's second-largest capital-raising market last year after London, with HK$341 billion raised in the local market.
Belle International, a women's footwear maker, raised HK$8.68 billion from its offering in May and drew HK$447 billion in orders, the hottest share sale in the city's financial history in terms of demand.
Wind power transmission equipment maker China High-Speed Transmission, which began trading on the main board on Wednesday, almost doubled on its debut, giving investors who cashed out the biggest payout in the exchange's history.
Fosun, controlled by tycoon Guo Guangchang, is involved in retail, property, steel production, pharmaceuticals and financial investment.
Before the global offering, Fosun brought in 11 cornerstone investors including Mr Li, Mr Lee and Joseph Lau Luen-hung as well as financial institutions such as First State Investment and Government of Singapore Investment Corp. Each committed to invest US$20 million.
New World Department Stores also saw strong demand from institutional and retail investors, allowing it to price its shares at the high end of the range to raise HK$2.36 billion to fund new shop expansion, a source said.
The retail offering was 60 times covered while the international tranche was 50 times oversubscribed, the source added.
Meanwhile, Centron Telecom, a mainland wireless network equipment maker, rose moderately on its trading debut despite the strong market sentiment.
The stock surged as much as 24 per cent in the morning before closing at HK$3.81, a mere 7 per cent above its offer price of HK$3.55.