Soho sees 15pc gain on debut

Shares of Soho China, a Beijing commercial property developer, gained a moderate 15.06 per cent on their trading debut yesterday, reflecting investors sustained appetite for mainland property plays despite the company's high pricing for its shares.

Soho China soared as much as 22.89 per cent to HK$10.20 in the first five minutes before falling back to close at HK$9.55, above its issue price of HK$8.30. Some HK$6.23 billion worth of shares changed hands.

'I am not surprised at the moderate rise, as the company priced its shares at a relatively expensive valuation of 33 per cent over its net asset value,' said a private banking adviser at a Singapore bank.

'Compared with its peers - especially those with larger land banks that are trading at a premium of about 30 per cent to net asset value - Soho China is fully priced.'

Fulbright Securities general manager Francis Lun said, 'The closing price fully valued the company's earnings next year. Investors may worry that the company will need to spend more for land beyond 2009, given its relatively small land bank.'

Meanwhile, China Aoyuan Property Group and Kingsoft Corp, both of which begin trading today, rose 20.38 per cent and 9.17 per cent respectively in the grey market, Phillip Securities' electronic trading platform showed.

Aoyuan Property shares, priced at HK$5.20 each, the top end of its indicative price range, closed at HK$6.26 after rising as much as HK$6.55 in the grey market.

The developer raised HK$3.64 billion by selling 700 million shares.

Kingsoft, a Beijing software and online game firm, saw a smaller increase with its shares closing at HK$3.93 after rising as much as HK$4.80 in the grey market.

The software and online game firm raised HK$768 million by selling 213.33 million shares that were priced at the top end of a range of between HK$2.90 and HK$3.60.