Golden Wheel rises 20pc on debut
Shares of Golden Wheel Tiandi, a Nanjing-based property developer, soared on their trading debut in Hong Kong yesterday, prompting more listing hopefuls to relaunch their plans for an initial public offering on the back of increasing appetite among investors.
The stock advanced more than 20 per cent to close at HK$2.04 yesterday after surging as much as 25 per cent at one point. In contrast, the benchmark Hang Seng Index dipped 0.1 per cent.
Founded in 1994 by Indonesian-Chinese Wong Kam-fai, the real-estate firm raised HK$756 million from selling 450 million new shares and pricing them at HK$1.68 each, near the top end of the offer range.
Apart from strong demand from retail investors, a significant surge in the share prices of small-cap companies provides little evidence of sustainable upward movement because underwriters may have stabilised the price moment on the first trading day, according to people familiar with the listing process in Hong Kong.
Like many listings of property developers, Golden Wheel, which develops residential and investment properties along the metro line in Nanjing, offered the shares at a deep discount, of more than 60 per cent, to its net asset value, reflecting the credit-strapped conditions among small and medium-sized property developers on the mainland.
CIFI, a Shanghai-based property firm, offered its shares at a 69 per cent discount to its net asset value last year.
Joining the latest revival of listing moves, Chinalco, a copper unit of Hong Kong-listed aluminium giant Aluminum Corp of China (Chalco), is planning to raise US$300 million through a listing in the city. The company looks to list its Peruvian copper-mining assets after a long-delayed plan.
Few expect a significant rebound in the IPO market in Hong Kong as the six-month pre-listing procedure offers little flexibility to deal-hungry bankers, who are often asked to bring in cornerstone investors to secure a bookrunner role.