A recovery in share prices and the apparent success of three large initial public offerings has encouraged a sportswear maker and a clean-energy company to relaunch deals that were postponed in late June, albeit in a smaller form.
Chinese sportswear maker Hosa International Ltd., which had hoped to raise up to US$211 million via a Hong Kong IPO in early summer, started taking orders Monday from institutional investors for a much smaller US$82 million IPO ahead of a Dec. 16 listing, according to a term sheet seen by Dow Jones Newswires on Monday.
The company is selling 400 million shares at a fixed price of 1.60 Hong Kong dollars (20.6 U.S. cents) each, the term sheet said. In June, the company had planned to sell 400 million shares as well, but for between HK$2.88 and HK$4.10 apiece.
Meanwhile, Beijing Jingneng Clean Energy Co., which in late June postponed a Hong Kong IPO that sought to raise as much as US$630 million, began testing investor interest in a resuscitated deal, according to a term sheet.
This time it wants to raise between US$230 million and US$300 million, a person familiar with the situation said Monday. But the amount has yet to be finalized and is subject to market conditions. A price range hasn't been set.
The company, a unit of Beijing's municipal government, operates gas-fired power plants in the capital. It plans to start order-taking from institutional and retail investors Dec. 12 and to list its shares on Dec. 22.
Separately, Guodian Technology & Environment Group Co., a Chinese clean-energy company, began taking orders from institutional investors as planned Monday for a Hong Kong IPO targeted to raise as much as US$646 million, according to a separate term sheet.
The company, which installs energy-saving facilities for coal-fired power plants, is selling 2.079 billion shares at an indicative price range of HK$2.16-HK$2.42 each.
Companies are seeking to get their IPOs completed before the end of the year. The Chinese New Year, in late January, effectively rules out an early start for new listings in 2012.
Already, Chow Tai Fook Jewellery Group Ltd., controlled by Hong Kong businessman Cheng Yu-tung, is seeking up to US$2.8 billion in Hong Kong, New China Life Insurance Co. is in the market with a US$2.28 billion offer that would be listed in both Hong Kong and Shanghai and and Haitong Securities Co. is pitching a US$1.67 billion Hong Kong IPO.
All three are plays on China. Chow Tai Fook, by some measures the world's biggest jewelry company, has 1,500 outlets in China. New China Life is China's fourth biggest insurer by premiums, and Haitong is the country's second-biggest brokerage.
Companies also are counting on a recovery in investor sentiment. The blue-chip Hang Seng index has surged 6.6% in three days and has risen in five of the last six sessions, cutting into losses of 17% so far this year.
In a bid to ensure its IPO's success, Guodian Techology has lined up five cornerstone investors that are buying a total of US$210 million worth of shares, or 32.5% of the offering, according to the term sheet. SAIF Partners is investing US$80 million, wind-turbine parts maker China High Speed Transmission Equipment Group will take up US$40 million of shares, and State Grid, China Datang Renewable and China Huadian Corp. each agreed to buy US$30 million of shares.
Cornerstone investors, which are commonplace in large Hong Kong offerings, are guaranteed large allotments in an IPO in exchange for agreeing to hold shares a certain length of time. In Guodian's case the lockup period is six months after the company's listing.
It plans to start the retail offering on Friday. Shares are expected to begin trading on Dec. 21.
