Mainland firms to relaunch IPO plans
At least three companies seek to raise US$1 billion from share offers in Hong Kong before December as capital market revives
At least three mainland companies are relaunching their plans to go public in Hong Kong to raise a total of US$1 billion or more after pulling them earlier this year because of a weak market.
Those companies want to list in the fourth quarter, most likely next month or November, before the December holiday season.
Although the Hong Kong stock market remains lacklustre, the firms are still going ahead as they do not want to miss the final opportunities this year to launch the initial public offerings.
Those that miss the boat may have to wait until mid-2013 or even later to list as they will be asked by regulators to submit their 2012 financial results, which could take until then to be approved by their IPO auditors.
"More listing candidates will launch roadshows in early October, when it should be the best opportunity for the credit-starved firms to tap into the reviving capital market in Hong Kong," said a Hong Kong-based fund manager, who declined to be identified as he was not authorised to speak to the media.
Zhengzhou Coal Mining Machinery started to take orders from institutional investors this week for its long-awaited US$500 million IPO in Hong Kong, while Fosun Pharmaceutical, which failed to launch its share offer at least twice earlier this year, is now trying to raise up to US$600 million from a Hong Kong listing, according to people in the financial industry familiar with the deals.
Both companies are already listed in Shanghai, which means IPO investors could enjoy the so-called H-share discount of about 10 per cent to their mainland-listed A shares.
Meanwhile, Fuhua Agriculture Technology, a mainland herbicide producer, was also trying to raise about US$200 million through a Hong Kong IPO, the people said.
"We are more positive that significant investor confidence will return next quarter," said Terence Ho, a China partner at accounting firm Ernst & Young.
Bloomberg also quoted an official at Huachen Automotive, the parent of Hong Kong-listed maker of cars and minibuses Brilliance China Automotive, as saying Brilliance planned to list its automotive parts unit separately in Hong Kong.
But a Brilliance spokesman said: "The unit mentioned in the report does not belong to Brilliance." Huachen officials could not be reached.
Additional reporting by Eric Ng