Candidates buoyed by successful run of IPOs
The successful initial public offering of Hong Kong Economic Times Holdings (HKET) has boosted the confidence of other listing candidates, with mainland watch distributor Xin Yu Hengdeli increasing its fund-raising target to $400 million from $300 million, according to market sources.
'Preliminary investor response to Xin Yu Hengdeli's offering is better than we expected,' said a source familiar with the planned listing, which is scheduled to be launched early next month.
'HKET has aroused investor interest in new offerings and they are now more eager to look at investment opportunities in newcomers.'
The retail tranche of HKET's flotation was 352.5 times covered, one of the highest rates among recent new listings.
The publisher's share price surged 35 per cent on its trading debut on August 2. It closed at $2.30 on Friday, compared with an offering price of $1.70.
AAC Acoustic Technologies, which will begin trading tomorrow, has reported that the retail portion of its $724.3 million offering had been fully covered.
This was in sharp contrast to the lukewarm response to the listings of China Cosco Holdings on June 29 and Guangzhou R&F Properties on July 13.
'With the help of HKET's flying colours and better investment sentiment, we're confident Xin Yu Hengdeli's offering will be welcomed by investors,' the source said.
The watch distributor was founded in 1924 and has shops throughout China, including Beijing, Shanghai, Shenzhen and Nanjing.
It sells brands such as Jaeger-Le Coultre, Bulgari and Tissot. Guotai Junan Hong Kong is the listing sponsor and sole bookrunner.
In another offering, the mainland's third-largest construction equipment maker, China Infrastructure Machinery Holdings (CIMH), plans to raise more than $500 million from a listing next month.
Sources said CIMH would list as a red chip as early as next month, with Cazenove Asia as the share sale arranger. Both the company and Cazenove declined to comment.
'China Infrastructure Machinery is seeking to raise as much as US$100 million if the market sentiment is good enough. The bottom line is $500 million,' one source said.
CIMH is a private enterprise which has an annual production capacity of 15,000 wheel loaders and 2,000 road rollers from its plants in Shanghai and Fujian.
The company has benefited from China's rapid economic growth in the past few years, with revenues rising to more than one billion yuan in the first four months of this year.
Three other mainland companies are lining up to tap the local market for a combined $2.37 billion next month, including apple juice concentrate producer China Hai Sheng Holdings, Taiwanese-owned flexible printed circuit board maker Global Flex and pork processor China Yurun Food.