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Shenwan Hongyuan IPO shows investment power

Business | Avery Chen and Reuters Apr 26, 2019
<p>Mainland securities firm Shenwan Hongyuan (6806), which launched the largest initial public offering in Asia so far this year, starts trading on Hong Kong&#39;s main board today.</p><p>The parent of main-board-listed Shenwan Hongyuan HK (0218) has raised HK$8.87 billion after pricing its flotation at HK$3.63, the lower end of the indicative price range. The IPO was oversubscribed 2.78 times in the retail tranche.</p><p>Shares of the Shenzhen-listed investment banking group closed 1.38 percent lower than its offer price at HK$3.58 in the Bright Smart gray market last night.</p><p>Shenwan Hongyuan&#39;s net assets ranked seventh among all securities firms in the mainland at the end of 2018, while its revenue and net profits ranked fifth and seventh respectively.</p><p>Its net profit fell 9.55 percent year-on-year to 4.16 billion yuan (HK$4.83 billion), while revenues rose 4.25 percent to 21.5 billion yuan in 2018.</p><p>It plans to use the IPO proceeds for developing its securities business, investing in fintech and developing cross-border core businesses.</p><p>Shenwan Hongyuan secured 13 cornerstone investors, which together have committed to buy shares worth about US$829 million (HK$6.44 billion).</p><p>The cornerstone investors include ICBC Asset Management Scheme Nominee, Huaxia Life Insurance, China Life Insurance (2628), China Reinsurance (1508) and New China Life Insurance (1336).</p><p>Another newly-listed company, Bonny International (1906), which manufactures and sells seamless and traditional intimate wear products, traded flat at HK$0.58 in the gray market last night.</p><p>The Zhejiang-based firm raised HK$131 million after pricing its IPO at HK$0.58 , higher than&nbsp;the midpoint of its indicative price range of&nbsp;HK$0.46 to HK$0.6. The floatation was oversubscribed 94.9 times.</p><p>Other action saw Malaysia-based engineering contractor JBB Builders (1903) launching an IPO yesterday, aiming to raise up to HK$172.5 million with a minimum investment of HK$2,787 before a listing on the main board on May 10.</p><p>The offering&#39;s price range is from HK$1.18 to HK$1.38.</p><p>Also yesterday, shares of Singapore-based furniture seller Design Capital (1545) fell 10 percent to HK$0.27 on its debut.</p><p>And local builder Fullwealth Construction (1034), which listed in October, plunged 82 percent to HK$0.5 on a market turnover of HK$372.9 million.</p><p>The Securities and Futures Commission warned that Fullwealth&nbsp;had a high concentration of shareholders in February, with a group of 19 holding an aggregate of 20.6 percent of issued shares.</p>


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