Huatai IPO attracts Internet tycoons
Print Edition
HUATAI Securities Co, China’s largest brokerage by trading volumes, launched its initial public offering in Hong Kong yesterday, attracting Chinese Internet tycoons including chairman of Tencent Holdings Ltd as its cornerstone investors.
Huatai plans to raise as much as HK$34.7 billion (US$4.5 billion) in what could be the largest IPO in Hong Kong so far this year, joining a fundraising frenzy by Chinese brokerages.
The Nanjing-based brokerage is offering 1.4 billion shares, or 20 percent of the enlarged share capital, in a price range of HK$20.68 to HK$24.80 per share.
The proceeds will be used to fund margin finance and lending business.
The offering price represented a 27-40 percent discount to its A shares, making it appealing to investors, analysts said.
“The new share sale is expected to be highly sought after given the oversubscription rate of about 40 times for GF Securities’ IPO in Hong Kong last month,” Qiu Guanhua, analyst with Guotai Junan Securities, said in a note earlier.
Huatai’s Shanghai-listed shares rose 0.77 percent to 27.31 yuan (US$4.40) yesterday.
The IPO has attracted 13 cornerstone investors who have agreed to purchase a combined US$1.9 billion worth of shares, Thomson Reuters publication IFR said in a report, citing a term sheet of the deal.
Pony Ma, chairman and CEO of Tencent, will purchase a US$100 million stake while William Ding, founder and CEO of news portal NetEase Inc will invest US$200 million, according to the report.
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