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Broker aims to net US$1.6b from IPO
By Winny Wang |
August 4, 2009, Tuesday
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Print Edition
Print Edition
EVERBRIGHT Securities Co plans to net as much as 10.96 billion yuan (US$1.6 billion) in the first initial public offering by a Chinese brokerage since 2003.
It will sell up to 520 million shares, which account for 15.21 percent of its enlarged capital, at between 19 yuan and 21.08 yuan apiece, the 11th biggest brokerage by assets said in a statement to the Shanghai Stock Exchange on Sunday.
The price-earnings ratio will be 52.78 to 58.56 times its 2008 earnings based on the enlarged share capital, it said.
"The IPO will be a key step for Everbright Securities to narrow its gap with leading brokerages in China," said Deng Shubin, an analyst at Central China Securities Research Institute.
Deng estimated that a reasonable price for the brokerage is between 15 yuan and 20 yuan.
The brokerage will sell 70 percent of new shares, totalling 354 million shares, to institutional and retail investors via an online tranche that it will launch today.
It will use proceeds from the sale to replenish working capital and plans to increase the number of outlets to more than 120 through mergers and acquisitions and by opening new ones, it said in its prospectus.
Deng also estimated the brokerage's profit at between 2.5 billion yuan and 2.8 billion yuan for this year.
The broker's profit fell 71 percent in 2008 to 1.37 billion yuan as a stock market rout hit trading but profit rallied 20 percent in the first half of this year on an annual basis.
It will sell up to 520 million shares, which account for 15.21 percent of its enlarged capital, at between 19 yuan and 21.08 yuan apiece, the 11th biggest brokerage by assets said in a statement to the Shanghai Stock Exchange on Sunday.
The price-earnings ratio will be 52.78 to 58.56 times its 2008 earnings based on the enlarged share capital, it said.
"The IPO will be a key step for Everbright Securities to narrow its gap with leading brokerages in China," said Deng Shubin, an analyst at Central China Securities Research Institute.
Deng estimated that a reasonable price for the brokerage is between 15 yuan and 20 yuan.
The brokerage will sell 70 percent of new shares, totalling 354 million shares, to institutional and retail investors via an online tranche that it will launch today.
It will use proceeds from the sale to replenish working capital and plans to increase the number of outlets to more than 120 through mergers and acquisitions and by opening new ones, it said in its prospectus.
Deng also estimated the brokerage's profit at between 2.5 billion yuan and 2.8 billion yuan for this year.
The broker's profit fell 71 percent in 2008 to 1.37 billion yuan as a stock market rout hit trading but profit rallied 20 percent in the first half of this year on an annual basis.
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