Investors will closely watch the trading debut of China Railway Signal & Communication (CRSC) today, after the first billion-dollar public offering since the market rout priced the stock at the bottom end of the indicative range. CRSC, China's dominant provider of railway and urban transit control systems, raised HK$10.8 billion at HK$6.30 per share, despite a head start in fundraising with a solid commitment by cornerstone investors to take 68.3 per cent of the shares on offer. The price gives CRSC a valuation of close to 22 times earnings, higher than peers China Railway Rolling Stock Corp and Zhuzhou CSR Times Electric, which trade at 14 and 17 times consensus earnings respectively. "The management's expectation was too high. When the IPO kicked off in April, comparable stocks such as CSR and CNR were trading at sky-high levels. But the market value has halved since the merger," said an analyst at one of the bookrunner banks who did not want to be identified. Only 54 per cent of the offering to household investors found buyers and the rest was reallocated to institutional houses, which snapped up 97.3 per cent of the total book. The cold shoulder from retail investors was "understandable", said the analyst, as all blockbuster IPOs this year have fallen below their offer prices after the market turmoil in June. CRSC is Hong Kong's fourth-largest IPO this year, after Huatai Securities, GF Securities and Legend Holdings, according to Dealogic. The other three were trading far below their offer prices yesterday, with both Huatai and GF more than 20 per cent under. CRSC, which intends to use the proceeds for research, acquisitions and overseas expansion, boasts size and higher profit margin compared to foreign peers such as Ansaldo STS and Alstom. It is the world's largest railway signal and control system provider by revenue - HK$21.9 billion last year - with 18.2 per cent return on equity. The company will still be busy assuaging investors' concerns over a deadly accident. The company was found accountable for a train collision in 2011 in Wenzhou, Zhejiang, that claimed 40 lives, forcing it to halt its first IPO attempt in Shanghai. "As far as I know, there were several institutional investors who didn't place bets on the stock due to concerns over the accident," said an equity analyst at a major Asian brokerage who declined to be named. "Such a track record will likely cast a shadow on their overseas bids." CRSC generated 4.4 per cent of its revenue from foreign business last year. Its ability to win more overseas projects will hinge on the steps taken by railway constructors such as China Railway Engineering Corporation and China Railway Construction Corp, who either lead the bids or subcontract projects to CRSC. Gary Wong, an analyst at Guotai Junan International, shrugged off any growth prospect for the company. "The valuation is simply too expensive. Its profitability trend is bottoming out. Investors would be better off buying CREC or CRCC if they are to bank on the new Silk Road initiative." Kenny Tang Sing-hing, who heads Jun Yang Securities, was more upbeat. "A low pricing leaves more headroom for future upside. The recent correction in the railway sector is reaching an end," he said.