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BoCom set to launch US$1.9b IPO in HK
By Vincent Lam (China Daily)
Updated: 2005-06-13 05:50
HONG KONG: The Bank of Communications (BoCom), the nation's fifth-largest
lender, is set to launch its HK$14.9 billion (US$1.9 billion) initial public
offering (IPO) today in Hong Kong's H-share market.
The Shanghai-based and nation's first shareholding bank is aiming to sell
5.856 billion shares for HK$1.95 (25 US cents) to HK$2.55 (32 US cents) apiece.
Ninety-five per cent of the shares will be initially offered internationally
with the remaining 5 per cent put up for subscription in Hong Kong.
The minimum subscription with 1,000 shares per lot is approximately HK$2,600
(US$334).
The bank announced earlier that its net profit for 2005 would be no less than
7.8 billion yuan (US$940 million). BoCom's 2004 profit fell 63 per cent to 1.6
billion yuan (US$193.2 million) from 4.38 billion yuan (US$5.3 million) in 2003
after the Ministry of Finance cancelled a 9.67 billion yuan (US$1.17 billion)
tax credit.
Co-underwritten by Goldman Sachs and HSBC, the price range represents 1.3 to
1.6 times the estimated 2005 book value and 11.1 to 14.5 times its 2005 profit
forecast which is cheaper than Hong Kong-traded banks including HSBC Holdings
Plc and Standard Chartered Plc.
The bank's capital adequacy ratio climbed to 9.72 per cent in 2004, higher
than the 8 per cent international standard, after the central government pumped
funds into the bank to prepare for its listing.
The subscription offer ends on June 16 with the trading debut set for June
23. The IPO of BoCom, one of the nation's most profitable banks, is seen by the
market as the first step in a rush of mainland banks to list in Hong Kong.
The bank has brought HSBC on board as its strategic investor, letting go a
19.99 per cent stake, in a bid to enhance the quality of its corporate
governance as well as impose more stringent credit control practices.
Following BoCom, China Construction Bank, the nation's third-biggest lender,
and China Minsheng Banking Corp, the first privately-owned bank, are both slated
to go public in Hong Kong this year as the race heats up to restructure to take
on the full scale entry of foreign banks to the Chinese mainland at the end of
2006.
(China Daily 06/13/2005 page2)
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