A mainland property developer and an apparel retailer will be the first two companies to debut on the Hong Kong stock exchange in 2013, aiming to raise up to HK$1.01 billion in total.
Golden Wheel Tiandi, a Nanjing-based real estate developer founded in 1994, is set to raise as much as HK$890 million in an initial public offering that starts today. It plans to offer an aggregate of 450 million shares at between HK$1.38 and HK$1.72 each.
With a focus on commercial and retail projects linked to metro stations or transport hubs, the developer had a land bank of about 290,000 square metres, Golden Wheel executive director Kenny Chan Wai-kin said. Four shopping malls, including one to be completed next year, accounted for about 90,000 sqm of the bank. The remainder was still under construction, including commercial properties and some residential projects.
"We believe that the continuing development of metro systems in second and third-tier cities will create significant opportunities for developing and investing in metro-linked commercial properties, like lifestyle shopping malls," chief executive Kenny Wong Kam-fai said.
Half of the HK$639.7 million net proceeds from the initial share sale would be used to buy land for new projects and fund construction, the company said in its prospectus. Another 40 per cent would be budgeted for four projects now under development.
But Golden Wheel said it might have to pay a fine of up to 22.4 million yuan (HK$27.49 million) or forfeit part of its land for failing to fully comply with laws in respect of certain projects. For example, the company was late in finishing its Nanjing Jade Garden and Golden Wheel Star Plaza projects. But its management said yesterday that it was confident the relevant projects would be completed in time.
Another mainland firm, Speedy Global, an apparel retailer that also designs, sources and manages logistics for owners of retail brands such as Giordano, aims to raise up to HK$123 million to expand.
The global offering will involve 150 million shares. The offer price will be between 58 HK cents and 82 HK cents per share.
Both Golden Wheel and Speedy Global will announce the pricing of their shares on January 8. Speedy Global is expected to list on January 15, a day before Golden Wheel's debut.
Alex Wong Kwok-ying, Ample Financial Group's asset management director, expects more companies to obtain initial listings in 2013 compared with 2012 because of recent market improvement.
"The macroeconomy favours initial public offerings because the global economy is recovering while Japan is going to launch monetary easing. So sentiment-wise, it should be OK next year," Wong said, adding that the stock exchange might need to lure overseas brands to Hong Kong as many mainland companies with big market capitalisation had listed already.
He said companies might have to accept lower pricing.
"The market in general has a lower valuation now and the risk of getting listed is higher as the market is more vulnerable to news-driven events," he said, citing Facebook's listing this year as an example of an event that dampened IPO sentiment.