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China Everbright Bank

China Everbright Group is a state-run financial conglomerate. Its operations include China Everbright Ltd, which listed in Hong Kong in 1997 with the stock code 165, and China Everbright Bank. Another unit, brokerage China Everbright Securities, was penalised in August 2013 after a trading glitch caused a spike of more than 5 per cent in China’s stock indexes on August 16.

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Everbright talks signal year-end listing

Mainland bank could launch US$4 billion share offering in Hong Kong soon

PUBLISHED : Thursday, 14 November, 2013, 3:09am
UPDATED : Thursday, 14 November, 2013, 3:57am

China Everbright Bank, which received the go-ahead for a listing from the Hong Kong stock exchange late last month, held a meeting with its syndicate bankers in Beijing yesterday, two people familiar with the deal said, prompting speculation of a year-end listing that would raise up to US$4 billion.

The medium-sized lender, based in Beijing, is making its third attempt to complete a long-planned H-share sale by issuing 12 billion shares after Huishang Bank, a newly listed city commercial bank that raised US$1.2 billion this week, made a positive debut amid solid support from a consortium of cornerstone investors.

"Timing of Everbright's IPO has yet to be confirmed as the final call very much depends on Everbright's share performance in Shanghai," said a Beijing-based banker who declined to be named. "Everbright is ready to go for a listing at anytime, while downbeat market sentiment looms after China's highly anticipated third plenary meeting offered little clarity over the country's economic reform."

Shares of Shanghai-listed Everbright have fallen 8 per cent this year, with a current price-book ratio of 0.86 per cent. The shares' inexpensive valuation has been one of the lender's major challenges in launching the H-share deal because its publicly traded stocks are below the official requirement of at least one times book value.

Meanwhile, shares of listing hopefuls generally offer a discount of 15 per cent to their industry rivals, creating a psychological buffer for investors after more than half of the newly listed firms traded below their offer prices.

"With a genuine discount on Everbright's A shares, valuation of its H-share stocks looks a big bargain, which may be a positive sign to launch the deal," a syndicate banker said.

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