361 Degrees International, one of the mainland's top five homegrown sportswear retailers, is pitching its short but strong growth history as it seeks investors for its Hong Kong initial public share offering, worth up to HK$2.18 billion.
Fujian-based 361 Degrees kicked off an international roadshow yesterday for its share sale after meeting investors in pre-marketing sessions that started on June 8.
The company is selling 500 million new shares at between HK$3.15 and HK$4.35 each. That would make the final deal worth between HK$1.58 billion and HK$2.18 billion, according to a document obtained by fund managers.
Based on the offered price range, the shares will trade at about 10 to 13.9 times the firm's expected earnings for this year and 7.6 to 10.4 times its expected earnings next year.
Market leaders Li Ning and Anta Sports Products trade at 2009 price-earnings ratios of 18.4 times and 17 times, respectively, and 15.4 times and 14.2 times 2010 earnings, according to a DBS Vickers report.
Shares of Li Ning have risen 75 per cent since the beginning of the year while Anta's have gained 152 per cent.
'The pricing is really reasonable, with a significant discount compared with other listed rivals,' said an investor invited to join the offering. 'It focuses on second- and third-tier cities, which helps it to avoid direct competition with other big players.'