Hope springs eternal for an array of technology companies which see the recent market recovery, fragile as it may be, as solid ground to re-launch listing plans. The biggest expected initial public offering (IPO) is Henderson Cyber, technology and telecommunications flagship of Lee Shau-kee's Henderson group. The cyber spin-off aims to raise up to HK$1.05 billion by selling 15 per cent of its share capital, with trading due to begin on July 14. Cable network and Internet group Across Asia Multimedia plans to raise up to HK$612 million ahead of its July 13 listing. Other smaller hopefuls include PandaRecruit whose Pandaplanet runs an Internet recruitment site and systems integrator DigiTel Group, which has a target of HK$100 million in mind and a July 12 listing. Fibre-optic equipment maker Intcera High Tech Group, which has raised HK$144 million will begin to trade on Friday. Meanwhile other Internet companies such as Dickson Cyber (part of Dickson Poon's retail group), are taking the necessary steps to go public on the second board by the end of the year. The company has already applied for approval for a GEM listing. Sentiment towards listing has been boosted by the recovery in the Hang Seng Index past the 16,000-level from a low point of 13,722 at the end of May and the successful listing of China Unicom. 'The conditions over the past two to four weeks have been better than the past few months - the markets have got to be a little bit calmer,' said the head of equity capital markets at a European brokerage. There is also the desire to get listed before August, a traditionally sluggish month when the response to any offering could be expected to be less. 'A lot of the bankers are viewing this as the last window before the summer lull,' Prudential-Bache International head of Hong Kong research Sanjeet Devgan said. While the Hang Seng's rebound boosted sentiment, it does not, in itself, explain the rush of new technology listings which are concentrated on the Growth Enterprise Market (GEM). The GEM Index is still languishing around the 460-point level - only slightly above its all-time low of 447.12 at the end of May - having failed to recover since the spring's sharp correction in technology and Internet stocks. Indeed, there could be a lot more activity if more corporates were ready to test the market - 23 firms have been approved for GEM listings, while another 21 applications are being processed. Several companies which made headlines for postponing IPOs at the last minute as the market fallout worsened in April, have not come back on board, including GEM hopeful Caripac .com Holdings, an Internet platform provider, and main board aspirants sourcing group Colby Net and China Infobank, the mainland's largest online provider of news and information. Their collective fund-raising target was more than HK$2.1 billion. However investors on the second board still have an appetite for new listings as was witnessed by the response to IT solutions provider Excel Technology International (Hong Kong) last Friday. The IPO of 150 million shares at HK$1.38 was more than 43 times subscribed on the retail side. Excel and a counter in the related media field, Phoenix Satellite Television Holdings, which listed the same day, are both trading actively and above their issue prices. Brokers attribute this to a different selection process for listing candidates. The days of a dotcom expecting to sell shares solely on the basis of an Internet strategy are gone, according to brokers. Technology companies making it through the IPO pipeline are tending to display strong financial backing from companies with proven track records in other industries. In the case of Excel the fact that Cheung Kong holds a stake helped it attract investor interest. PandaRecruit is backed by developer Great Eagle Holdings. Companies such as Henderson Cyber expect some investors will be attracted to the financial clout from being owned by the Henderson group. The issuers have cut the amount of money they expect to raise from their IPOs, increasing the odds of small offers such as Excel's being well-received. Investors are also being attracted to companies which have other traditional businesses, such as PandaRecruit which, in addition to its online recruitment portal, will have the Recruit magazine. The company plans to raise about HK$60 million to HK$70 million in a listing on the second board. 'In the early stages the name dotcom sold but now you are talking about companies who have a core business,' said a source at one company planning to list on the GEM this month. The GEM is driven mainly by retail investors, say brokers, who are still keen to speculate on new listings as opposed to existing stocks on the second board. 'Sentiment on the existing stocks is not that good so some players are chasing up the IPO stocks,' Tung Tai Securities associate director Kenny Tang Sing-hing said. With investors still interested in buying certain technology firms, issuers are still keen to raise much needed equity - albeit much less than a few months ago - to capitalise the expansion of their operations. Graphic: gem5gbz
