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| Chenming:the first company to float A, B and H shares together |
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http://www.paper.com.cn
2008-06-05 China Paper |
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Shandong Chenming Paper's retail subscription which opened yesterday was not as good as expected. A total of HK$21 million of margin financing was recorded by three local brokerages.
Chenming, mainland's largest paper manufacturer by sales, is the first company to float A, B and H shares together. It aims at raising HK$4.2 billion in the Hong Kong IPO.
Lee believes Chenming's worse-than-expected subscription response is due to the price range and less well-known brand for the local investors.
"Qunxing Paper, Nine Dragons Paper and Lee and Man Paper are all trading at a price-to-earnings ratio multiple of 9 times to 11 times," said Lee. "There is almost no discount if you compare Chenming with its peers, although its H shares are a big discount to A shares."
He believes that Chenming's retail subscription response in the next few days will depend on the overall market.
However, sources said Chenming's international tranche has already more than 5 times oversubscribed. The institutional book will be closed on Friday.
A director at Chenming's sponsor said responses of institutional investors are very positive. Chenming is in talks with two to three insurance companies and one international mutual fund in relation to the company's H shares subscriptions.
Meanwhile, Henan-based property developer Central China and sportswear retailer Pou Sheng, a spin-off of Yue Yuen Industrial, set the price respectively at HK$2.75, the lower-end of the indicative range and HK$3.05 apiece, close to the low end of the range.
The company is expected to announce its offering prices and subscription amount today and start trading on Friday.
(China Paper06/05/2008)
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