Wednesday July 27, 7:44 PM
HK Economic Times IPO draws huge demand –source
HONG KONG, July 27 (Reuters) - Hong Kong Economic Times Holdings Ltd. Has attracted orders for about 300 times the shares on offer in the retail portion of its HK$177 million (US$22.7 million) initial public offering, a source close to the deal said on Wednesday.
As a result, 50 percent of the offering, instead of 10 percent, will go to individual investors in Hong Kong.
"Hong Kong Economic Times is offering its shares at a big discount to its peers. I expect the counter to surge at least 10 percent on its debut," said Clive Zhang, chief investment officer at Partners Capital Asset Management.Management.
The company is the owner of the city's biggest Chinese financial newspaper, the Hong Kong Economic Times, as well as a personal computer focused magazine called e-zone and recruitment publication Career Times.
It is offering 104 million shares at HK$1.43 to HK$1.70 each.
If priced at the top end of the proposed range, the shares will be sold at about 9.6 times forward earnings, fund managers said. That would be a 20 to 40 percent discount to some of its local rivals.
SCMP Group , which publishes Hong Kong's South China Morning Post newspaper, and Mingpao Enterprise trade at 18.5 times and 12.3 times forecast earnings, respectively.
Competition in Hong Kong's crowded newspaper is growing more intense with the introduction of two new free papers. Shares of Oriental Press Group and Next Media Ltd. have fallen 19.2 percent and 4.9 percent in the past month, respectively.
The earnings of Hong Kong Economic Times jumped 150 percent to HK$65 million in the year ended March 2005 on revenues of HK$608.4 million.
Its shares will begin trading on Aug. 3. BNP Paribas Peregrine is the sponsor of the deal.
