Despite recent market rally, investors remain cautious with initial public offerings and are giving the cold shoulder to a downsized deal by mainland department store operator Maoye International Holdings. Two retail brokerages active in handling share subscriptions, Sun Hung Kai Financial and Phillip Securities, said they received a combined HK$6.4 million in margin orders for Maoye shares on the first day of the retail offering yesterday. The amount was well below the HK$328 million worth of shares available to Hong Kong retail investors even after a price reduction. Maoye is offering the shares at HK$2.90 to HK$3.80 each to raise between HK$2.5 billion and HK$3.28 billion, compared with an initial target of up to HK$7 billion in January before the deal was postponed. The new price range values the shares at 19.7 to 25.8 times the company's forecast profit this year, compared with 29 to 37 times in its first attempt. Meanwhile, Hong Kong-based fashion accessories maker and retailer Artini China plans to start an international roadshow next week for its own share offering after gaining approval from the stock exchange listing committee last Thursday. A source said the firm planned to raise US$100 million from the deal, below the previous expectation of US$150 million, in the hope that a cheaper valuation would appeal to increasingly cautious investors. Trading was tentatively set for either May 15 or 16, the source said. Cazenove is the sole bookrunner for the offering. Founded in 1992, Artini has a network of 115 self-owned points of sale for its two brands, Artini and Q'ggle. With an average selling price of 1,000 yuan each, Artini products are aimed at affluent middle-aged consumers from 83 mainland and Hong Kong outlets. Its Q'ggle products, available in 32 outlets with an average price tag of 300 yuan per item, are aimed at younger customers. Vice-chairman Wini Yip said the Artini brand was the second-largest in the mainland fashion accessories market after Switzerland-based crystal glass brand Swarovski. Ms Yip said Swarovski was one of the company's clients for concurrent design manufacturing and did not object to Artini's retail development. The Walt Disney Company and Marks & Spencer are also clients of the company, together accounting for nearly half of Artini's turnover. For the year to March last year, Artini's net profit increased 39.3 per cent to HK$73.5 million as turnover rose 16.3 per cent to HK$340 million. Ms Yip said the company would accelerate its retail expansion where the profit margin was as high as 80 per cent. The profit margin of its manufacturing business was about 30 per cent, she said. It aims to increase its points of sale to 282 by the end of the year, lifting retail business proportion in the revenue structure to 70 per cent.