By Prudence Ho
HONG KONG-- Fuyao Glass Industry Group Co., a Chinese maker of
car windows, has raised US$951 million in Hong Kong's biggest
initial public offering so far this year, a person familiar with
the situation said Wednesday.
Fuyao, whose customers include General Motors, priced its IPO at
the top end of its price range, as investors poured into a company
they said was a market leader in its sector. The company, which is
already listed in Shanghai, has seen its stock in China surge
almost 40% this year, outperforming the buoyant Shanghai Composite
Index.
Fuyao sold 439.7 million new shares at 16.80 Hong Kong dollars
(US$2.17) each -- the top of its HK$14.80-16.80 price range, the
person said.
The price is a 12% discount to the Shanghai shares of Fuyao,
which were trading at CNY15.08 (HK$19) on March 17, the day before
the glassmaker began order-taking. China's stock market has been
one of the world's best performers this year, however, so its
shares tend to trade at a premium to Hong Kong stock.
Fuyao's final pricing equated to 12.5 times its forecast 2015
earnings, above the 9.5 times level its smaller rival, Hong
Kong-listed Xinyi Glass Holdings Ltd., is trading at according to
FactSet.
"Investors like Fuyao Glass's position as the leading automotive
glassmaker with a track record of over 20 years, so they are
willing to give premium to buy the stock, " said Matthew Kwok,
chief strategist at China Yinsheng Wealth Management Ltd., which
didn't invest in Fuyao Glass.
Fuyao is scheduled to list on March 31. Its IPO is the biggest
in Hong Kong since that of broadband operator HKBN Ltd., which
raised US$750 million in a listing early this month.
While Fuyao and HKBN managed to price their IPOs at the top end
of the range bankers had set for them, fund managers cautioned that
not all deals will fly. "We're not at a stage where investors will
rush into every IPO," Mr. Kwok said.
Until 2011, Hong Kong was the world's top venue for IPOs for
three years running, but a number of weak debuts led to a slowing
of listings. In the past few weeks, however, Hong Kong has picked
up again and several Chinese securities firms are planning to tap
the city's markets in the hope that investors will use brokerages
as a proxy for China's stock rally.
GF Securities Co., the fourth largest brokerage in China, is
taking orders from investors for its up to US$3.6 billion initial
public offering in the city. The company is already listed in
Shenzhen, one of two mainland Chinese cities excluding Shanghai
that have a stock market. Huatai Securities Co., or HTSC, the
country's fifth-largest brokerage firm, and Guolian Securities Co.,
a smaller rival, also plan to list in Hong Kong and raise over US$3
billion combined in coming months.
UBS AG and China Merchants Securities (HK) Co. are the lead
bankers on the Hong Kong IPO of Fuyao.
Write to Prudence Ho at prudence.ho@wsj.com
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