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Huatai launches IPO in Shanghai

HUATAI Securities Co has won regulatory approval to launch an initial public offering in Shanghai to replenish its operating capital.

The Nanjing-based brokerage will issue 985 million shares, or 16.89 percent of its expanded share capital, the China Securities Regulatory Commission said today.

Huatai will use the proceeds to boost operating capital, increase investments in innovative businesses and replenish capital for subsidiaries.

The brokerage will launch the IPO after gaining a final notice from the commission, which is usually issued within a month.

Analysts estimated that the brokerage will raise at least 10 billion yuan (US$1.46 billion) from the share sale if the IPO price is 50 times its earnings in 2008 of 1.25 billion yuan, or 0.22 yuan per share.

Huatai is likely to be the third brokerage that launched an IPO this year after Everbright Securities Co and China Merchants Securities Co. The IPO price of Everbright was 59 times its 2008 earnings and that of China Merchants was 56.26 times.


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