Hong Kong is embracing a new wave of initial public offerings (IPO) as mainland companies resume their listings spree at Asia's largest listed bourse in the coming months.

 

Apart from China Merchants Bank's sale of US$2.4 billion in shares, a retailer, a fertilizer maker, a juice maker and the mainland's top lender are also planning to launch IPOs.

 

Beijing's supermarket operator Jingkelong aims to raise as much as HK$600 million (US$77 million) from its Hong Kong IPO selling its shares at between HK$3.9 (50 US cents) and HK$4.5 (58 US cents) apiece, people close to the deal said.

 

Jingkelong has begun marketing its IPO and will sell shares at a discount to rival Wumart Stores, which listed on the Hong Kong bourse in November 2003 and has seen its shares traded at 27 times last year's earnings.

 

Jingkelong's earnings rose more than 20 percent in the first half of this year. Its IPO, which will be sponsored by DBS Asia Capital, is expected to be the largest on the Growth Enterprise Market, Hong Kong's secondary board, since Tom Online's listing to raise HK$1.5 billion (US$190 million) in 2004.

 

China Blue Chemical, a unit of the country's top offshore oil firm CNOOC that produces fertilizer, also began marketing its US$400 million IPO in Hong Kong yesterday.

 

It will open the order book next week and its shares are expected to begin trading from September 29.

 

Beijing Huiyuan Juice Holdings, the mainland's top fruit juice maker, is seeking approval from the Hong Kong stock exchange to raise HK$2 billion (US$260 million) in an IPO as early as November, sources said.

 

Huiyuan Juice's parent company Beijing Huiyuan Beverage and Food, the mainland's largest drinks firm by revenue, said in August that it had not yet reached a decision on where and when to sell shares.

 

Investment banks including Morgan Stanley, UBS and China Construction Bank's international arm are coordinating the sale.

 

Other than fruit and vegetable juice, Huiyuan Juice produces milk products and tea drinks.

 

The Industrial and Commercial Bank of China (ICBC), the mainland's biggest lender, plans to sell 53 billion shares to raise US$19 billion in the first simultaneous listing of Hong Kong H shares and Shanghai A shares.

 

The ICBC has earmarked 35.4 billion shares for its H-share offering, with 5 percent reserved for Hong Kong retail investors.

 

Hong Kong's IPO market hit a lull in July and August as most bankers and businesspeople took summer holidays.

 

Local investors are anxiously waiting for new shares.

 

Last week, shares in Win Hanverky Holdings surged by 33 percent on its trading debut, reflecting demand for new shares in Hong Kong and boding well for the upcoming IPOs.

 

Win Hanverky is the largest apparel supplier for sports brand Adidas in China and is the first stock listed in Hong Kong after a lull of nearly two months.

 

(China Daily September 12, 2006)