Zheshang Bank to launch marketing activities for IPO worth up to US$1.75b

PUBLISHED : Tuesday, 15 March, 2016, 10:32pm
UPDATED : Tuesday, 15 March, 2016, 10:35pm

China Zheshang Bank, a commercial lender in eastern China, will launch a Hong Kong initial public offering from Wednesday, potentially raising up to US$1.75 billion in what would rank as the first noteworthy share sale in terms of size this year.

Zheshang bank is offering 3.3 billion shares at an indicative range of HK$3.92 to HK$4.12 apiece. The offer has attracted five cornerstone investors.

The pricing for the IPO is expected to confirmed on March 21, to be followed by its trading debut on the Hong Kong stock exchange on March 30.

Brokerage Shenwan Hongyuan Group will invest invest US$100 million in the offer. Other cornerstone investors include Alibaba Group’s finance affiliate Alipay, which will invest US$30 million.

Zheshang Bank president Liu Xiaochun said the bank already cooperates with Alipay in a number of areas and expects additional cooperation in the future.

Liu said he expects Zheshang Bank’s profit margin to remain stable level this year, even as mainland Chinese banks have reported overall slower profit growth recently. He added that Zheshang Bank’s net profit margin would face pressure if interest rates decline further.

Liu said there are no plans to delay the listing. Reports said some potential investors in the IPO were having transferring money out of mainland China.

“The listing procedure is following our plans,” Liu said.

He added that plans to open a branch in Hong Kong have been accelerated. The Hong Kong branch, he believes, will speed up the bank’s internationalisation procedures and broaden awareness of the brand.