ColbyNet has postponed its initial public offering a second time, citing market volatility. Less than a week after it re-launched a substantially scaled-back share offering, the merchandise-sourcing company said yesterday it would consider returning to the market when conditions stabilise. 'I want to make it very clear that we believe the future of Colby is as a public company,' chief operating officer Dow Famulak said. John Simpson, head of equity capital markets Asia for sponsor HSBC Investment Bank Asia, denied speculation yesterday that the latest postponement was due to a lack of interest. He said although the United States and local stock markets had staged a strong recovery in the past few days, conditions were not right for a flotation. 'In the light of the market fluctuations, it is almost impossible to put a proper pricing to ensure good after-market performance,' he added. Tung Tai Securities research director Kenny Tang Sing-hing said the price-earnings multiple of ColbyNet was high compared to that of listed competitor Li & Fung, which has a substantially larger operations scale. The pro-forma fully diluted prospective price-earnings multiple was adjusted to a maximum of 45 from 121 previously, after ColbyNet more than halved the higher end of its fund raising target amount to HK$1.23 billion. This compared with Li & Fung's multiple of 60 based on yesterday's closing price and this year's forecast earnings. 'The fact that about 30 per cent of the shares to be sold come from the majority shareholders has turned some investors off,' Mr Tang said. 'I think even after the price reduction last time, ColbyNet is still expensive, given its smaller scale compared to Li & Fung,' Celestial Asia Securities research manager William Li Kin-tung said. 'Size is important in the merchandising industry to achieve economies of scale.' Li & Fung raised over US$250 million in March to fund its Internet strategy, after announcing the acquisition of Swire Pacific's merchandise sourcing unit Swire & Maclaine in December.