COUNTRY REPORT CHINAsold half of the 5.05bn A-shares in the IPO
to strategic investors.
Some 1.09bn shares that were initially
earmarked for the institutional tranche
were shifted to the retail tranche because
of the heavy oversubscription.
As a result, excluding the strategic
tranche, retail investors bought 73% of
the remaining shares and institutional
investors 27%, almost exactly the reverse of
the planned 30-70 split.
The lock-up period for strategic investors
is 12 to 36 months, and 70% of the shares in
the institutional tranche will be locked up
for six months.
The company plans to use Rmb11bn of
the proceeds to build four nuclear power
units in Guangdong and Guangxi provinces
and will use the rest as working capital.
CGN Power ran 22 nuclear power units
in China as of last December, 12 of which
were located in Guangdong province.
It posted a net profit of Rmb13.7bn in
2018 on revenue of Rmb50.8bn.
CICC is the sponsor and joint bookrunner
with China Development Bank Securities, while
China Securities and Minsheng Securities. Guotai
Junan and BOC International (China) are the
junior bookrunners.
› FOSUN TRIMS TSINGTAO STAKE
Fosun Group and its entities have raised
HK$1.53bn (US$195m) from a sell-down in
TSINGTAO BREWERY CO.
Fosun sold 30m H-shares, or about 2.2%
of the company’s total shares outstanding,
at the bottom of a HK$50.86–$51.65 range.
The final price represents a discount of 3.5%
to the pre-deal close.
The deal was launched after the market
closed on August 16.
The books were multiple times
oversubscribed with the participation from
more than 30 investors. There was a good
mixed of long-only investors, sovereign
wealth funds and hedge funds. The top 10
investors took about 90% of the deal.
China Momentum Investment,
Fidelidade - Companhia de Seguros, and
Peak Reinsurance Co were the selling
shareholders. They will be subject to a 60-
day lock-up.
Goldman Sachs was the sole bookrunner.
› 9F PRICES IPO AT TOP
The NYSE IPO of Chinese digital financial
services provider 9F has raised US$84.6m
after the pricing came in at the top of the
indicative price range.
9F priced the offer of 8.9m ADSs (76%
primary/24% secondary) at US$9.50 each,
compared to the US$7.50–$9.50 range.
On an adjusted net income basis, the
final price represents a 2019 P/E of 5.1 and
a 2020 P/E of 3.8.
The company said on August 12 several
unnamed investors had indicated interest
in buying US$89m of ADSs in the IPO. They
were not existing investors, directors or
officers.
The final filing on August 15 showed
that in the end just three investors bought
8.89m shares, or nearly the whole deal. Of
this trio, one took 3.7m shares and another
took 4.2m.
9F made a bright start on the NYSE on
its first trading day on August 15 before
ending only slightly higher. The shares
opened at US$10.88 and traded as high as
US$13.73 before finishing at US$9.58, up
only 0.8% for the day as just 2.6m shares
changed hands.
Credit Suisse led the IPO with Haitong
International, CLSA, China Investment Securities
International and 9F Primasia Securities.› CECEP WIND-POWER PLAN UNDER REVIEWThe China Securities Regulatory
Commission is set to review Shanghai-listed
CECEP WIND-POWER’s Rmb2.8bn (US$396m)
private placement plan.
The state-owned company, which
develops, builds and operates wind power
generation projects, plans to sell up to
831m shares, or 20% of its existing shares,
to up to 10 investors.
China Energy Conservation and
Environmental Protection Group, its largest
shareholder with a 45.6% stake, has committed
to buy 10% of the private placement.
Proceeds will be used on four wind power
projects and to replenish working capital.
The State-owned Assets Supervision and
Administration Commission has approved
the private placement plan, but the company
still needs approval from the CSRC.› CHIPSCREEN BIO ROCKETS SIX-FOLDShares of SHENZHEN CHIPSCREEN BIOSCIENCES
opened at Rmb125, over six times the IPO
price of Rmb20.43, on their trading debut
on August 12 on the Shanghai Star board.
The stock closed at Rmb95.31 on the day,
up 367%, and Rmb96.00 at the end of the
week on August 16.
The company raised Rmb1.02bn from
the IPO, which was priced at a record P/E of
467.5 for companies listing on the new tech
board. The funding target was Rmb804m.
Investors who bought the shares at the
opening quote paid the equivalent of a
whopping 2,860 times 2018 earnings.
Chipscreen Biosciences is principally
engaged in the research and development of
original innovative molecular entity drugs.
There are no daily price limits during thefirst five days of listing on the Star board.
The shares are then allowed to rise or fall
up to 20% in a single day. On other Chinese
bourses, price gains are capped at 44% on
debut, and limited to 10% swings in either
direction thereafter.
Essence Securities is the sponsor.› CHONGQING RURAL IPO CLEARS HEARINGHong Kong-listed CHONGQING RURAL COMMERCIAL
BANK has cleared a hearing at the China
Securities Regulatory Commission for a
proposed Shanghai listing of not more
than 1.36bn A-shares, or about 11.95% of its
enlarged capital.
Based on its net assets per share of
Rmb7.07 last year, the bank could raise at
least Rmb9.6bn from the IPO. Regulations
in China require banks to sell shares at a
price not lower than their NAVs.
CRCB’s H-shares closed at HK$3.89 on
August 15.
Proceeds will be used to replenish capital.
CICC is the sponsor and joint bookrunner
with China Securities.› CLOUDWALK, SINOVOICE PLAN STAR IPOSAI companies CLOUDWALK TECHNOLOGY and
BEIJING SINOVOICE TECHNOLOGY plan to file listing
applications for the Shanghai tech board
in the first half of next year, according to
people with knowledge of the matter.
CloudWalk, one of four AI unicorns in
China along with SenseTime, Yitu Technology
and Megvii Technology, plans to file for a Star
IPO by June 2020, the people said.
It plans to launch a new round of private
financing soon at an expected valuation of
about Rmb15bn, they said.
The company said it raised Rmb1bn from
a financing round last October. State-owned
China Reform Capital and Guangdong-
provincial Technology Financial Group led
the investment.
CloudWalk is an artificial intelligence
facial recognition company whose
technology is widely applied in the
financial, public security, and aviation
sectors. Its customers include the Civil
Aviation Administration of China, the
Ministry of Public Security, Bank of China,
Agricultural Bank of China, Xiaomi and
Volkswagen.
China Securities is the sponsor for the IPO,
said the people.
CloudWalk did not respond to emails
from IFR seeking comment.
SinoVoice, a technology company
specialising in voice and handwriting
recognition, plans to file for a tech board
IPO in the first quarter of next year, said
people close to the deal.
The company’s valuation was about