Shares in China High-Speed Transmission Equipment Group, a Nanjing-based maker of wind-power transmission gear, almost doubled on their first day of trading, providing investors that cashed out with the biggest payout in the exchange's history. The shares closed at HK$14, up from HK$7.08 a share at the initial public offering last week - the top end of an indicative range that went as low as HK$5.38 a share. The retail tranche was 692 times covered. 'The size of China High-Speed is relatively small and, given its uniqueness in the wind power equipment market among Hong Kong-listed mainland power equipment firms, I think the stock still has room to gain,' said Tung Tai Securities associate director Kenny Tang Sing-hing. The stock could rise to between HK$16 and HK$18, he said, adding that it was not too pricey compared with China Communication Construction. Both are trading at about 40 times 2008 forecast earnings. China High-Speed's 98 per cent gain beat the 85 per cent first-day advance of China Communication Services in December to take first place for best first-day trading. For each board lot of 1,000 China High-Speed shares allotted in the initial public offering, investors could have made as much as HK$7,360 if they sold out at the peak price yesterday of HK$14.44. The previous record for the biggest payout came from China Molybdenum, which paid investors HK$4,020 at its peak first-day trading price in April. China High-Speed raised US$272 million from the sale of 300 million shares or a 25 per cent stake. Morgan Stanley arranged the offering. GE Capital, a subsidiary of United States-based conglomerate General Electric and partner of China High-Speed, holds a 5 per cent stake in the company. The rousing performance was in contrast with recent share offerings in Hong Kong. KWG Property Holdings, a Guangdong-based developer, disappointed with an under-forecast 7.7 per cent first-day rise, while Rreef China Commercial Trust, a spin-off from Deutsche Bank's property and infrastructure management arm, fell 8.2 per cent when it started trading on June 21. Meanwhile, the institutional tranche of mainland supermarket operator Jiangsu Times has been oversubscribed 10 times, market sources said. The firm is aiming to raise as much as HK$880 million by selling shares in Hong Kong.
