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CITIC Bank may raise US$5.4b in IPO
By Zhang Lu (China Daily)
Updated: 2007-04-17 10:05 China CITIC Bank, the country's seventh-largest lender by assets, may raise around $5.4 billion in its dual share sale in Hong Kong and Shanghai. And if the bank exercises a 15-percent over-allotment, or greenshoe option, for its H shares, it may raise up to $5.9 billion, making it the world's largest initial public offering this year. CITIC Bank on Sunday set an indicative price range of 5 to 5.8 yuan apiece for its Shanghai offering of 2.3 billion A shares. The Hong Kong offer of 4.885 billion shares would be priced at HK$5.06 to HK$5.86. "The price range is relatively expensive", although the bank has reduced its target, said Zhang Qi, a banking analyst at Haitong Securities. The bank set an earlier range of 4.66 to 6.10 yuan per share last week. The new price range values CITIC Bank at 2.64 to 2.84 times its 2007 book value. And the price is 30 to 38 times its estimated earnings this year, much higher than the price-to-earnings ratio of other listed banks. However, international institutional investors have shown strong interest in the share offering, expecting China's banking sector to perform well, driven by 10 percent economic growth and rising demand for loans. By the end of Friday, the share offer was over 30 times oversubscribed, with investors placing orders worth over $55 billion. (For more biz stories, please visit Industries)
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