(TheStandard, Nov 30, 2006) Undeterred by Tuesday's steep stock- market correction, retail investors have delivered an overwhelming response to two current initial public offerings, treating them as opportunities not to be missed.

When subscriptions closed at noon Wednesday, Zhaojin Mining and Kingboard Laminates had received orders, respectively, for nearly 500 times and 200 times the shares on offer. Eager punters are reallocating their funds to what they see as must-win IPOs, despite a market full of uncertainty.

And riding the current wave of IPO enthusiasm, a slew of other listing candidates are also bringing offerings to market.

Sources said Wednesday that Zhaojin Mining, China's second-largest coal miner, has generated HK$100 billion worth of orders from its retail tranche, while the company's institutional share allotment is more than 100 times oversubscribed.

Kingboard Laminates, the laminates business unit of Kingboard Chemical (0148), saw its IPO's institutional portion more than 50 times oversubscribed, while its retail slice is 200 times covered.

"Investors shifted their focus to new stocks that are offered at a discount to their listed peers," said a fund manager.

Both Kingboard Laminates, which aims to raise up to HK$5.8 billion, and Zhaojin Mining, targeting up to HK$2.19 billion, are scheduled to price their shares tomorrow.

With clawback mechanisms triggered, the companies will reallocate their respective share distributions so that the institutional and retail tranches will each account for 50 percent of total available shares.

Two other listing candidates, Kingdom Holdings and Shanghai Jin Jiang International Hotels, will start accepting orders from retail investors today.

Jin Jiang, the mainland's largest hotel chain, plans to sell 1.1 billion shares at HK$1.81 to HK$2.20 apiece to raise up to HK$2.42 billion, with 10 percent of the shares allocated to retail investors. Kingdom Holdings, a mainland manufacturer of linen yarns, is seeking up to HK$262.5 million by selling 150 shares priced between HK$1.40 and HK$1.75.

Sources close to the transactions said the institutional tranches of these small-sized offerings were about six times and 10 times oversubscribed, respectively, following three days of bookbuilding that began Monday.

More companies plan to list in Hong Kong amid the SAR's current IPO fever. China Coal Energy, the mainland's second-biggest coal producer, plans to sell 3.25 billion shares to raise up to HK$13.16 billion, according to people familiar with the deal.

The company, which kicked off its investor roadshow Wednesday, has set an indicative price range of between HK$3.20 and HK$4.05 per share, representing 9.3 to 11.8 times 2007 forecast earnings, sources said.

"The valuation of China Coal is quite expensive compared with [peer] China Shenhua Energy (1088), which trades at nine times forecast earnings," said Prudential Brokerage associate director Lin King-ham. In addition, investor sentiment for the coal producer's IPO may be adversely affected as its public offer period coincides with that of Jin Jiang and China Communications Construction, Lin said.

CCC, the mainland's largest port builder, plans to issue 3.5 billion Hshares, of which only 5 percent will be allocated to retail investors, to raise HK$15.6 billion. Retail subscriptions open tomorrow and close December 6.

Meanwhile, Zhuzhou CSR Times - China's leading railway electrical systems provider, with plans to raise about HK$1 billion in its IPO - started pre-marketing Wednesday and will take institutional orders next week.

The benchmark Hang Seng Index gained 141.40 or 0.8 percent Wednesday to 18,780.93, rebounding from a 565-point slide Tuesday, which was its biggest single-day points decline since the day after the September 11, 2001 terror attacks.
source:TheStandard