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Firm raises US$123m in share sale

By Hanny Wan and Cathy Chan (China Daily)
Updated: 2006-10-27 10:48

Beijing Capital Land Ltd, one of the city's largest landowners, and a shareholder raised HK$961 million (US$123 million) in a share sale in Hong Kong, according to a sales document sent to investors.

The money will be used to finance projects the company is building and to buy more land, said Richard Taylor, head of equity capital markets at CLSA Asia Ltd.

Real estate investment growth in China accelerated in the first nine months of the year, the National Development and Reform Commission said on Tuesday. Property investment rose 24.3 per cent, 2.1 percentage points faster than a year earlier, indicating government cooling measures have yet to take effect.

Beijing Capital Land's share sale is "logical" because it needs to reduce financial risks, said Stone Shi, an analyst at Sun Hung Kai Securities in Hong Kong, who has a "buy" rating on the company. "They need a lot of money. They have to improve their gearing ratio."

The offer price was "pretty low," which was a sign that "investors are very concerned" about Beijing Capital Land's high gearing ratio, which was 150 per cent at the end of June, Shi said.