This is the first IPO managed by the bank since a scandal tarnished its name ICEA Capital is confident about the near-term prospects of Dawnrays Pharmaceutical (Holdings), whose initial public offering (IPO) is the first share offer lead-managed by ICEA after its reputation was tarnished by former client Euro-Asia Agricultural (Holdings). 'We have come to know the company inside out,' said ICEA managing director Gary Sik of Dawnrays, a mainland-based antibiotics producer scheduled to float on the Hong Kong main board on July 11 after an IPO this week. 'This time, we have demanded high work quality,' Mr Sik said, while declining to comment on ICEA's responsibility in the Euro-Asia scandal, citing ongoing regulatory investigations and lack of personal involvement in the deal. 'Over a long, say 10-year, timeframe, we can't even say if your newspaper or ICEA will go bankrupt. But at least for the moment, we don't see any problems with [Dawnrays]' he said. Mr Sik's comments came after an anonymous e-mail to potential investors and the press last week drew comparisons between Dawnrays' private ownership, high profit margins and production efficiency to those of Shenyang-based floricultural firm Euro-Asia. Once a darling with institutional investors, Euro-Asia has since been found to have inflated its revenue 20 times in the four years to 2001 in order to gain its July 2001 Hong Kong main-board listing, sponsored by ICEA. Euro-Asia's controlling shareholder Yang Bin, once ranked as China's second-richest man, went on trial for financial crimes in Shenyang earlier this month. ICEA, the Hong Kong investment banking arm of the mainland's largest bank, the Industrial and Commercial Bank of China, was questioned by Hong Kong regulators in connection with Euro-Asia and did not lead-manage any deals between October last year and the Dawnrays offer. Citic Capital is a co-sponsor of the Dawnrays float. Dawnrays, headed by Zhang Jingxing, is to sell 248 million shares, or 31 per cent of its enlarged share capital, to raise at least $150 million through its IPO beginning today to fund a significant expansion of its production, research and development, and marketing. The share price range of 75 cents to $1.03 represents a historical price-earnings multiple of 6.35 to 8.72. The 223.2 million share institutional tranche will comprise 48 million old shares held by the firm's two controlling shareholders Hung Yung Lai and Li Kei Ling. An additional 24.8 million new shares are reserved for retail investors. Justifying the sale of the old shares, Ms Li said yesterday: 'We are a small-capitalisation company. We want to sell some old shares to increase free-floating shares. Also, once the firm has been listed, the existing shareholders or the company may buy back some shares at an appropriate time.'