Pacific Online prices shares at heavy discount to Nasdaq peers

Mainland-based internet portal Pacific Online has set the price range for its HK$1.02 billion initial public offering at a discount to its Nasdaq-listed peers.

The company is selling 161 million new shares and 95 million existing shares at HK$2.98 to HK$3.58 each, according to the offering documentation, to attract investors despite market volatility.

Retail subscriptions will begin in Hong Kong on Wednesday and run until noon on December 10. Trading is expected start on December 18.

BNP Paribas is the sole sponsor for the deal.

The price range values Pacific Online's shares at 30 to 36 times the company's estimated earnings for 2007 - lower than Sina Corp's 45.89 times and 66.95 times for Sohu.com, both listed on the Nasdaq, according to Bloomberg data.

However, market watchers say there are no directly comparable companies because Pacific Online is a vertical information provider focusing on specific content, while Sina and Sohu are horizontal portals that provide a wide range of information such as news, finance and sport on their websites.

'The pricing [of Pacific Online] is not expensive compared with its Nasdaq-listed peers,' said a China Everbright Securities analyst. 'The pricing already leaves room for investors to make money.'