Investor Alert

New York Markets After Hours

March 24, 2011, 4:03 p.m. EDT

Hong Kong IPO Market Keeps Up Strength

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Zoomlion Heavy Industry Science & Technology Co. Ltd. (1157)
  • X
    China Hongqiao Group Ltd. (1378)

or Cancel Already have a watchlist? Log In

By Prudence Ho

HONG KONG—Hong Kong's market for initial public offerings showed no sign of slowing Thursday, as a Shanghai-listed construction-machinery maker laid plans to raise US$2 billion to US$3 billion and a unit of a Chinese state-owned company raised US$658 million, people familiar with the deals said.

Sany Heavy Industry Co., the construction-equipment company, aims to list in Hong Kong in the first half of the year, people familiar with the deal said Thursday. Sany said last April it was planning a Hong Kong listing, but it gave no time frame.

Its offering will be among the biggest planned this year in Hong Kong, joining the Hong Kong-London listing of Swiss commodities trader Glencore International AG that could raise up to US$10 billion.

Investors will likely compare the valuation of Sany Heavy, whose parent is Sany Group Co., with another Chinese machinery maker, Changsha Zoomlion Heavy Industry Science & Technology Development /zigman2/quotes/204352360/delayed HK:1157 -3.46% Co., which raised US$1.68 billion in an IPO in Hong Kong in December. Since listing, Zoomlion shares are up roughly 30% from their offer price. The shares have benefited from booming demand in China for machinery products.

China's construction-machinery sector will have another five to seven years of fast growth, BNP Paribas predicted in a research report this month, driven by China's rising urbanization rate, the need to rely on either public or commercial housing to raise the effective housing supply, and the tendency to shift to machinery as a replacement for manual labor amid rising labor costs.

Meanwhile, Far East Horizon Ltd., a financial-leasing unit of state-owned Sinochem Group, raised US$658 million by pricing its Hong Kong IPO in the middle of the indicative price range, a person familiar with the situation said Thursday.

Far East Horizon, which provides equipment-based financial leasing to industries ranging from health care and shipping to printing and machinery, sold 816 million shares at 6.29 Hong Kong dollars (81 U.S. cents) each, the person said. The indicative price range was HK$5.20-HK$6.80, according to the company's prospectus.

The company will start trading Wednesday on the Hong Kong stock exchange.

Separately, shares of China Hongqiao Group /zigman2/quotes/207358542/delayed HK:1378 -2.48% Ltd. rose 9.7% to HK$7.90 Thursday in their Hong Kong trading debut. The Chinese aluminum producer had raised US$817 million from its IPO, the biggest IPO in Hong Kong this year.

Analysts cautioned that even though IPOs are doing relatively well, uncertainty remains in the market about new share offerings.

"Hongqiao's shares are trading above their offer price, but that doesn't mean investor interest in IPOs is particularly keen," said Castor Pang , research director of Cinda International. "Uncertainty ranging from Japan's earthquake to high oil prices continues to weigh on sentiment."

Write to Prudence Ho at prudence.ho@dowjones.com

HK : Hong Kong
$ 3.63
-0.13 -3.46%
Volume: 4.88M
Aug. 18, 2022 4:08p
P/E Ratio
Dividend Yield
Market Cap
$56.38 billion
Rev. per Employee
HK : Hong Kong
$ 7.85
-0.20 -2.48%
Volume: 8.65M
Aug. 18, 2022 4:08p
P/E Ratio
Dividend Yield
Market Cap
$75.14 billion
Rev. per Employee

This Story has 0 Comments
Be the first to comment

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.