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Everbright IPO raises US$1.6b yuan

EVERBRIGHT Securities Co raised 10.96 billion yuan (US$1.6 billion) in its initial public offering, the first by a Chinese brokerage since the end of 2002, to replenish working capital.

The Shanghai-based brokerage sold 520 million shares to investors at 21.08 yuan apiece, among which 341 million shares were 116 times oversubscribed in an online tranche and the remaining shares were 124 times oversubscribed in offline sales, it said in a statement to the Shanghai Stock Exchange yesterday.

The price-earnings ratio was 59 times its 2008 earnings based on the enlarged share capital.

"The stock is expected to rise 70 to 100 percent on its trading debut," Shanghai Securities Co said in a note.

The stock will start trading in Shanghai no later than August 19, said Luo Zhefu, vice chairman of Everbright Securities, during an online presentation to investors on August 3.

The company will use proceeds from the sale to replenish working capital. It plans to increase its outlets to more than 120 through mergers and acquisitions and by opening new ones, it said in its prospectus.

The brokerage's profit fell 71 percent in 2008 to 1.37 billion yuan after a stock market rout. Everbright's profit climbed 20 percent in the first half of this year on an annual basis.

Citic Securities was the last brokerage to launch an IPO on the Chinese mainland. It raised 1.76 billion yuan in December 2002.


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