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Mainland firms still drawing in punters

By Lillian Liu (China Daily)
Updated: 2007-03-15 10:19

Despite a volatile market, the initial public offerings (IPO) of mainland companies have drawn strong orders from investors in Hong Kong.

China's Intime Department Store Co priced its $311 million Hong Kong offering at the top of a revised price range as investors rushed to buy up shares in the Zhejiang-based retailer, sources said.

Intime, which operates three stores in the country's third-richest province, sold 450 million shares at HK$3.39, or 30.8 times 2007 earnings.

Intime plans to open 10 stores over the next five years and expand its scale through mergers and acquisitions.

Morgan Stanley sponsored the offering. Its trading debut is scheduled for March 20.

The retailer received an overwhelming response after the first two days of its roadshow, as investors valued and benchmarked it with Parkson Retail Group, the country's top department store chain.

A unit of the mainland's largest grain trader COFCO International, China Agri-Industries Holdings won favor with investors, as four large local brokerages granted a total of HK$9.63 billion in margin loans on the first day of its retail offering.

Prudential Securities, which received HK$2.2 billion in margin orders for China Agri-Industries, expected the retail tranche to be at least 150 times oversubscribed when the offering closes.

Analysts said China Agri-Industries, the mainland's largest processor of crops, would attract interest from investors based on its solid business model and strong support from its State-owned parent China National Cereals, Oil and Foodstuffs Import and Export Corp.

KGI Asia received HK$4 billion in margin orders, Sun Hung Kai Financial received HK$2.3 billion and Phillip Securities HK$1.13 billion.

But another listing candidate, Australian gold miner Sino Gold Mining, received a lukewarm response. Phillip Securities and Sun Hung Kai Securities have booked a cumulative HK$27.5 million in margin orders. Most local brokerages halted margin orders last Wednesday, a day before the retail offer was to close.