Plantation firm China Forestry Holdings and underground shopping centre operator Renhe Commercial Group plan to start their initial public offerings for up to US$700 million next week, seeking to break the three-month hiatus of new listings in Hong Kong, sources said. Spooked by the global financial turmoil and the volatile stock market, listing hopefuls have shied away from Hong Kong since the listing of Emperor Watch & Jewellery in July. China Forestry and Renhe Commercial planned to launched international roadshows and retail subscriptions early next week, an unusual move as most retail offerings start after a two-week roadshow. Sources said the company wanted to shorten the offering period to avoid market volatility. Renhe Commercial, targeting US$550 million from the deal, would only meet investors in Asia and the Middle East and skip the United States and Europe where the appetite for new stocks had been dampened by the credit crisis, sources said. Cazenove and UBS are advising China Forestry, which aims to raise as much as US$150 million from the offering. 'The deal could arrive at the market if the market remains stable in the next few days,' a source said. China Forestry, one of the top three privately owned forestry companies on the mainland, expects to complete acquisitions by 2010 that would boost its forest area by 155 per cent to 438,446 hectares on the mainland, according to a UBS report. The company planned to spend most of the proceeds of the offering on acquisitions as it had signed several non-binding agreements for 266,667 hectares of forests in Yunnan province, sources said. UBS expects China Forestry's net profit to surge 183 per cent to 283 million yuan this year from 100 million yuan last year, boosted by higher sales and better average selling prices of its timber products. Meanwhile, Renhe Commercial expects to open six projects by the end of next year, which will increase the gross floor area of its mainland shopping centres to 1.02 million square metres, according a HSBC report. Growing on trees UBS has forecast that China Forestry's net profit this year will increase: 183%
