New | China’s Huatai Securities kicks off Hong Kong share offering

Huatai Securities Co Ltd , China’s largest brokerage by trading volumes, launched a Hong Kong share offering worth up to US$5.2 billion on Monday, tapping the chairman of Tencent Holdings as one of its cornerstone investors.

It joins other Chinese financial firms planning to raise more than $30 billion in new funds through equity offerings in the next few months in Hong Kong, making 2015 the busiest year for the financial services sector since 2010.

Huatai Securities, also known as HTSC, could raise as much as $4.5 billion in the base deal, but the value of the offering may climb as high as $5.2 billion if an overallotment option to meet additional demand is exercised.

That would make it the largest share sale in Asia Pacific since the $4.9 billion Australian IPO from state-owned health insurer Medibank Private Ltd in November.

The Shanghai-listed company is offering 1.4 billion new shares in an indicative price range of HK$20.68 to HK$24.80 per share, seeking to raise funds for its margin finance and lending businesses, Thomson Reuters publication IFR reported, citing a term sheet of the deal.

That represents a discount of as much as 39 per cent to Friday’s closing price of 27.10 yuan. Its shares have more than tripled over the past year as brokerages benefit from soaring stock trading volumes in mainland Chinese markets.