Watchmaker hits on prime time for offering

Heavy oversubscription prompts Time Watch to expand size of HK flotation to HK$120m

PUBLISHED : Tuesday, 05 February, 2013, 12:00am
UPDATED : Tuesday, 05 February, 2013, 5:27am


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Mid-priced watchmaker Time Watch Investments increased the size of its initial public offering in Hong Kong, seeing strong demand for new shares due to improving sentiment.

The company, which listed in Singapore before being privatised in 2011, raised US$120.2 million in the Hong Kong offering, from the initially planned US$104 million, as the issue was oversubscribed 650 times by retail investors.

The institutional tranche was 12 times oversubscribed after firming up US$26.2 million of cornerstone investment from hedge-fund firm Orchid.

With the exercise of the overallotment option, the overall deal size represents 28 per cent of the enlarged share of capital.

Shares in Time Watch were priced at the top end of the indicative range, at HK$1.35 per share, representing a price-earnings ratio of 9.3 times, based on the forecast earnings this year.

That compares with the industry average of 11.4 times. The stock is scheduled to begin trading today.

According to people familiar with the deal, the company's turnover days - the number of days it takes to sell the inventory on hand – was about 210.

That figure was lower than the industry average of 300 days, which could help ease investor concern over its ability to keep its products moving in a difficult operating environment.

The company said its growth strategy was focused on mass-market consumers in smaller cities on the mainland and taking advantage of the urbanisation process.

Joining the latest listings rush, PanAsialum, a Shenzhen-based manufacturer of aluminium casings for Apple's iPad, is set to make its trading debut today after raising US$1.22 billion ahead of its listing.

It fixed the price towards the higher end of the indicative range.

The 10 per cent retail tranche was more than 50 times oversubscribed, triggering an overallotment option to raise the portion to 40 per cent.

Aluminium parts for Apple products have increased as a proportion of the firm's portfolio in the past two years. PanAsialum also produces aluminium doors, window frames and other building products.