Seller expects to raise HK$385m after stock surges to highest since 2003 listing An investor in Ports Design, a high-end mainland fashion retailer, was selling 22 million of the company's shares yesterday, hoping to reap as much as HK$385 million after the stock surged to its highest since the firm went public in 2003, market sources said. The shares were selling at HK$16.50 to HK$17.50 each, representing between a 5.17 per cent discount and a 0.57 per cent premium to yesterday's HK$17.40 closing price, sources said, without disclosing the seller. CLSA arranged the sale. Sources close to the company said the seller was the family of Alfred Chan Kai-tai, the company's largest shareholder. Sellers attempting to sell a block of shares usually offer a discount to attract buyers. On this occasion, the top end of the indicative price unusually was at a premium. 'This is seldom or never the case, but whether it will emerge to have a premium still depends on the final pricing,' the sources said. Market watchers said the 'premium' top end might be due to the small transaction volume history of the stock as it was not easy to buy a large amount through the market. For example, only 1.05 million Ports shares changed hands yesterday, compared with the 22 million shares the investor put on sale, which were equal to 4 per cent of the company's issued share capital. Ports raised HK$422.6 million by selling 40.25 million shares at HK$10.50 each in October 2003. Based on yesterday's closing price, the stock has risen 563 per cent from its offer price after taking into account a one-into-four share split in December 2004. The stock was trading at 40 times this year's forecast earnings. Hong Kong-based Ports is one of the few foreign brands to achieve success in the high-end mainland market. Even so, HSBC, which gives the stock a 'neutral' rating with a target price of HK$18.60, said in a December 15 report that present valuations were 'demanding'. The company, which had 297 stores under the Ports brand at the end of June, is benefiting from China's surging economic growth and rising levels of private consumption. First-half net profit rose 51 per cent to 100.8 million yuan on turnover of 417.1 million yuan. It planned to open 20 outlets in China in this half, including stores in Chengdu, Changchun and Shenyang. It will also open two superstores in Beijing next year, taking to eight the number of such outlets on the mainland.