Cambodian casino operator NagaCorp, which launched its retail initial public offering Friday, has received lukewarm response from investors as its shares only generated about HK$100 million worth of margin orders, according to five major brokers polled by The Standard."The poor response may be due to the fact that investors lost money by buying HannStar through margin, as the stock had limited gain on its trading debut," said Bright Smart managing director Nelson Chan.
Also, as NagaCorp's offering coincided with the Chinese Mid-Autumn Festival, this may have affected investor sentiment, a broker said.
Philip Securities, which recorded HK$70 million worth of margin orders, said investors are reluctant to invest in NagaCorp given the political uncertainty in Cambodia.
NagaCorp, controlled by Malaysian tycoon Chen Lip Keong, holds the right to operate the only licensed casino in Phnom Penh, which has a large Chinese customer base, until 2035. The firm currently operates 44 gaming tables and 211 slot machines, but hopes to boost the number of gaming tables to 176, while adding a 508-room hotel by the end of 2007. NagaCorp, which plans to raise up to HK$800 million, will sell 500 million shares at HK$1.25 to HK$1.60 each, representing 9.6 to 12.3 times 2005 earnings. The public offering will end Wednesday, with trading to start October 19.
Meanwhile, shares of HannStar Board International (0667) rose only 2.82 percent on their trading debut Friday. The stock hit HK$2.03 before closing at HK$1.82, compared to the IPO price of HK$1.77. About 251 million shares changed hands for turnover of HK$481 million.
"Though the valuation of HannStar is still attractive, the stock price has slightly increased, as investors rush to sell the stock to reinvest their cash in the coming new IPOs," said Kenny Tang Sing-hing at Tung Tai Securities.
Taiwan-based HannStar, which raised HK$575 million in its IPO, issued 325 million new shares. The IPO price represented 10.2 times prospective 2006 earnings.
Two other mid-sized companies are floating shares this month. Die-casting machine maker LK Technology Holdings priced its offering at HK$1.11 per share, near the top of the indicated range, sources said Friday. The retail tranche was 15 times covered, while the institutional allotment was five times oversubscribed. LK Technology, which will start trading October 16, plans to raise up to HK$282.5 million by selling 250 million shares.
Computime, which seeks to raise up to HK$456 million, has priced its shares at HK$2.28, representing 12 times projected 2006 earnings. Computime said it received applications for 13.644 billion shares - an oversubscription of 681 times - freezing HK$31.1 billion. Trading starts Monday.
