Investors take up US$510m of Harbin Bank's IPO

PUBLISHED : Monday, 17 March, 2014, 2:47pm
UPDATED : Tuesday, 18 March, 2014, 1:29am

Harbin Bank, the first lender to go public in Hong Kong since China Everbright Bank listed in December, has lined up seven institutional investors to take up US$510 million of its US$1 billion initial public offering, people familiar with the deal said yesterday.

The mainland's private equity investor Citic Capital, partly owned by sovereign wealth fund China Investment Corp, is investing US$150 million in the share offer, as is Hong Kong-listed developer Wuzhou International.

Meanwhile, Fubon Life Insurance, a unit of Fubon Financial, one of Taiwan's largest financial conglomerates, will take US$290 million worth of shares.

Harbin Bank will take orders from retail investors today. The lender was expected to sell about three billion shares in total, but the price range had not been released because sponsors, including ABC International, BOC International and China International Capital Corp, were still in discussions with the bank's management, a person familiar with the talks said.

Bankers said listed banking stocks on the mainland were trading at below book value, putting upcoming listings by industry players at a disadvantage as they were required to price their shares at a minimum of book value.

Joining the listing queue is Wuhan-based Optics Valley Union, a builder of industrial parks on the mainland, which is looking to raise HK$871.7 million in Hong Kong later this month.

The cash-strapped developer is looking to price the offer at 83 HK cents to HK$1.09 a share, representing a discount to net asset value of more than 70 per cent. It will start its roadshow today, targeting a listing on March 28.

Chairman Huang Liping said the company hoped to improve its net operating cash flow by boosting new home sales at two projects.

Optics Valley's net operating cash flow expanded to 715.4 million yuan (HK$903.7 million) in September last year from 309.1 million yuan in December 2012, while its gearing ratio, a measure of indebtedness, rose to 147.5 per cent from 87.1 per cent, its prospectus said.

Sentiment in the listing market has turned bearish this month on soft economic data from the mainland. Of the five most recent flotations in Hong Kong, only Poly Culture traded above its offer price on its debut.