Smokin' hot IPO is 101 times oversubscribed

Business | Avery Chen 12 Jun 2019

Two mainland companies start trading on the main board today with China Tobacco International (HK) (6055), the international unit of the world's largest cigarette producer, rising 2.46 percent to HK$5 in the Bright Smart gray market last night.

The spinoff of state-owned tobacco monopoly China National Tobacco Corporation has raised HK$735 million and priced its initial public offering at the higher end of its targeted price range at HK$4.88 as the flotation was 101.04 times oversubscribed in the retail tranche and had received "significant oversubscription" in its international tranche.

The other newly listed company, China East Education (0667), the largest vocational training education provider in mainland China, saw its shares decline 2.93 percent to HK$10.92 in the gray market ahead of its debut. The Anhui-based company has raised HK$4.77 billion, becoming the biggest IPO among listed education companies, after pricing its IPO at HK$11.25, higher than the midpoint of its indicative price range. The IPO was only 76.1 percent subscribed.

Meanwhile, Guangdong-based education firm Scholar Education launches an IPO today to raise as much as HK$585 million, offering 124.9 million shares at HK$3.64 to HK$4.68. The minimum investment is HK$4,727.16 per lot of 1,000 shares.

It expects to list on the main board on June 21.

And Jinxin Fertility, an assisted reproductive services provider in the mainland, will launch a Hong Kong IPO tomorrow of HK$3.05 billion, with a minimum investment of HK$17,252.

In other news, Shanghai's Sci-tech Innovation Board has drawn 120 firms in the two months since applications opened and the IPOs are expected to raise a total of US$16 billion (HK$124.8 billion).

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