China Communications Services Corp (China Comservice), a China Telecom Group company seeking to raise up to HK$2.84 billion in an initial public offering, has attracted strong demand from individual investors on the first day of subscription despite having revised up its offer price by 12 per cent and the competition for funds from other share sales.
Six leading securities brokerages - KGI (Asia), Sun Hung Kai Securities, Prudential Brokerage, Phillip Securities, Celestial Asia Securities and Everbright Securities - received yesterday about HK$5.2 billion worth of margin orders for Comservice or 18 times the shares available in the retail tranche.
Market analysts reckon that the telecommunications engineering and technical services firm will be a major beneficiary of China's pending launch of third-generation mobile-telephone service.
Another catalyst for growth is the company's right of first refusal to buy the remaining 15-province telecommunications support services business it does not own from its parent firm in the 12 to 18 months after the public offering, said Celestial Asia director Horace Kwan Pak-leung.
Beijing-based Comservice is selling 1.29 billion shares at a price range of HK$1.70 to HK$2.20 each, which was raised from the original HK$1.56 to HK$1.96 after overwhelming interest from institutional investors.
On the other hand, Aupu Group Holding, which also opened its public offering yesterday, received lukewarm response. Only KGI of the six firms surveyed received margin orders for Aupu, a small mainland bathroom appliance maker competing for funds against much larger IPO candidates.
