Update | China’s Huatai Securities up 5 per cent in Hong Kong debut
Shares of mainland brokerage HTSC, better known as Huatai Securities, rose almost 5 per cent in its market debut on Monday as investors piled into Hong Kong’s biggest initial public offering for the year.
Huatai was trading around HK$26 per share at 10:05 am in Hong Kong.
The company raised US$4.5 billion in the share sale in Hong Kong after pricing the deal at HK$24.8, the top end of the range between HK$20.68 and HK$24.8. The Hong Kong listing makes the biggest share sale in the Asia Pacific region since the US$4.9 billion Australia listing of state-owned health insurer Medibank Private in November last year.
"The performance of its IPO was within his expectations given the bullish mood in the Hong kong and mainland stock markets," Huatai Securities chairman Wu Wanshan said at the listing ceremony.
Wu said "Huatai aims to enforce risk management control of the stock lending and margin financing businesses," after several other brokerages announced a tightening of margin lending which contributed to last Thursday’s sell-off in China’s equity markets.
Value partner chairman Cheah Cheng Hye told SCMP that Huatai is one of the few brokerages that has edges in technology, internet, mobile. Valurpartner is one of a group of cornerstone investors in Huatai.
“It is a matter of when Chinese government will allow the commercial banks to run brokerage businesses,” Cheah said.
Before the deal was launched, the mainland brokerage had pre-sold a combined US$1.9 billion worth of shares to thirteen cornerstone investors including Tencent chairman Pony Ma and US fund management firm Och-Ziff Capital.
Ma and Och-Ziff each bought US$100 million shares.
Huatai, the mainland’s largest brokerage by trading volume, on Friday completed the biggest IPO in the city this year and surpassed its rival GF Securities’ US$3.1 billion listing in April.
A total of 24 new listings on the Hong Kong stock exchange have raised a combined value of US$11.8 billion, with Hong Kong leading all global exchanges in new listing volume, ahead of New York (US$9.1 billion) and Shanghai (US$8.5 billion), data provider Dealogic.
Separately, Reuters reported that China National Nuclear Power Co Ltd (CNNPC), a unit of one of the country’s two state nuclear reactor builders, on Monday said it aims to raise 13.19 billion yuan (US$2.13 billion) in potentially the largest China IPO in almost four years.
The company intends to issue 3.891 billion shares at 3.39 yuan a piece, and will start taking subscriptions from investors on Tuesday, according to a prospectus published on the Shanghai Stock Exchange.
CNNPC is the largest of the 23 companies that will kick off initial public offerings this week.
CNNPC’s would be the largest A share IPO since Power Construction Corp of China’s offering in September 2011.
CNNPC said its IPO price of 3.39 yuan was 22.29 times the company’s 2014 earnings, which is lower than an average price/earnings ratio of 29.75 for its listed peers, including China Yangtze Power Co and GD Power Development Co .
The prospectus said it had total debt of 175.88 billion yuan at the end of last year.
CNNPC is a unit of China National Nuclear Corp (CNNC) which invests, builds and operates domestic nuclear power plants. It has 12 subsidiaries in different regions.
Last year, CNNC’s major rival, China General Nuclear Power Corp, listed subsidiary CGN Power on the Hong Kong stock exchange, raising $3.2 billion.
