IFR Asia - November 04, 2017

COUNTRY REPORT CHINA

HK$6.60–$7.70 each when bookbuilding
starts on Monday, the people have said.
The price range translates to P/E ratios of
30.9–36.1 for 2018 and 16.7–19.5 for 2019.
The company’s market capitalisation will
be US$5.5bn–$6.5bn before the exercising
of a greenshoe.
There will be no cornerstone tranche for
the IPO, according to the people.
Bookbuilding for the IPO will be held
from Monday to Thursday before the shares
are priced on the last day. Listing will be on
November 16.
Yixin has raised around US$1bn in
private financings from Tencent, Baidu
and JD.com as it seeks to develop China’s
largest online car-financing platform.
According to a regulatory filing, Tencent
controls 24.3% of Yixin, JD Financial owns
12.7% and Baidu holds 3.5%.
Citigroup and Credit Suisse are joint
sponsors on the IPO. The two banks are
also joint global coordinators with China
Merchants Securities and UBS.

› SOGOU NYSE IPO BOOKS COVERED

The books of Chinese search engine SOGOU’s
NYSE IPO of up to US$585m are covered,
according to people close to the deal.
The Sohu.com subsidiary, with Tencent
Holdings as its biggest shareholder, is
selling 45m primary American depositary
shares at an indicative price range of
US$11–$13 each.
This values the company at US$4.46bn–
$5.27bn or a 2019 P/E of 15.7–18.6.
Books will close on November 8 and
pricing is slated for the same day.
Sogou posted a net profit of US$36m for
the first half of 2017, up 41% year on year,
according to a filing. Its net profit for 2016
was US$56m.
CICC, Credit Suisse, Goldman Sachs and JP
Morgan are joint bookrunners.

› BOOKS COVERED FOR PPDAI IPO

The institutional books for PPDAI GROUP’s
NYSE IPO of up to US$323m are covered,
according to people close to the deal.
The Shanghai-based peer-to-peer online
lending platform is selling 17m primary
shares at an indicative price range of
US$16–$19 each. The range represents a
2018 P/E of 8.3–9.9.
Pricing of the IPO shares is slated for
Thursday, November 9.
Ppdai posted a 2016 net profit of
Rmb502m, a turnaround from a 2015 net
loss of Rmb72m. It reported a net profit of
Rmb1bn for the first half of 2017, up from
Rmb42m for the same period last year.
Credit Suisse, Citigroup and Stifel are
bookrunners on the IPO.

› FOUR SEASONS BUILDS US IPO BOOKS

FOUR SEASONS EDUCATION has started

bookbuilding for a NYSE IPO of up to

US$111m, with Citigroup, China Renaissance

and Morgan Stanley as leads.

The company is marketing 10.1m American

depositary shares (91% primary/ 9% secondary)

at an indicative price range of US$9–$11 each.

This represents a 2018 P/E of 20.2–24.7.

Books will close on November 7 and

pricing is slated for the same day.

Four Seasons, which provides

mathematics tutorial classes in China,

posted net profit of Rmb28.5m for the six

months to August 31, up 539% year on year.

The company is raising funds to expand

its learning centre network, improve

existing facilities, develop educational

content and meet working capital needs.

› PSBC HIRES PRE-LISTING TUTORS

POSTAL SAVINGS BANK OF CHINA has hired CICC,

China Post Securities and UBS Securities as pre-

listing tutors for a Shanghai IPO of up to

5.17bn A-shares, or about 6% of its enlarged

equity capital.

Based on October 31 closing price of

HK$4.71, equivalent to Rmb4, the bank

stands to raise Rmb20.68bn from the

listing.

Proceeds will be used to replenish

working capital.

PSBC, the country’s biggest bank n

terms of the number of branches, raised

HK$59.12bn from a Hong Kong IPO last

year.

The China Securities Regulatory

Commission has approved nine listing

applications, targeting proceeds of a

combined Rmb9.5bn.

One of the nine, SHANDONG PUBLISHING AND

MEDIA, is pre-marketing a Shanghai IPO of

about Rmb2.71bn, with BOC International

(China) as sponsor.

Shandong Publishing plans to sell no

more than 267m shares, or about 12.79% of

its enlarged company capital.

It will set the price on Monday and start

bookbuilding on Wednesday.

Proceeds will be used for publishing

projects and working capital.

› SWISS RE SELLS DOWN NCL STAKE

Swiss Re has sold down its stake in the

H-shares of NEW CHINA LIFE INSURANCE to raise

HK$3.55bn (US$455m).

The sell-down of 75m shares, or 7.3% of

New China Life’s outstanding H-shares,

was priced at HK$47.30, off an indicative

range of HK$47.20–$48.30. The final price

represented a discount of 5.5% to the pre-

deal spot.

The sale was multiple times covered

with about 80 investors, mainly from Asia,

participating. The top 10 investors took

about 70% of the shares.

There is a 180-day lock-up period on the

vendor.

JP Morgan and Morgan Stanley were joint

bookrunners.

› RONSHINE CHINA BUILDS WAR CHEST

RONSHINE CHINA has raised HK$1.21bn from

a top-up share placement, with Haitong

International, UBS and Yuexiu Securities as

joint bookrunners.

The property developer sold 142m

shares, or 9.53% of the enlarged share

capital, at HK$8.52 each, or a discount of

6.4% to the pre-deal spot.

Ronshine will use the proceeds as general

working capital.

› HAITONG ACCEPTS CORNERSTONE

HAITONG UNITRUST INTERNATIONAL LEASING has

accepted Shanghai Qiangsheng as a

cornerstone investor for its proposed Hong

Kong IPO of about US$500m.

Shanghai Qiangsheng has agreed

to invest up to Rmb320m in the float,

according to a company filing.

Haitong Unitrust is the financial leasing

unit of Haitong Securities. CICC, Citigroup,

CMB International and Haitong International

are the joint sponsors on the float.

› CHINA UNICOM COMPLETES PLACEMENT

CHINA UNICOM has completed its Rmb61.73bn

private placement of A-shares to a group of

strategic investors.

The transaction was a key step towards

completing the telecommunications

operator’s transition to a mixed

ownership model via a Rmb77.91bn equity

fundraising.

The company’s A-share unit, CHINA UNITED

NETWORK COMMUNICATIONS, sold 9bn A-shares at

Rmb6.83 each to nine strategic investors,

including China Life Insurance, Alibaba

Group, Tencent Holdings, Baidu and

JD.com.

The placement price was at a discount

of 12.4% to the November 1 close of

Rmb7.80.

There is a 36-month lock-up on all nine

buyers.

As part of the partial privatisation plan,

China Unicom also plans to raise about

Rmb12.98bn and Rmb3.21bn, respectively,

from a government-backed fund and from

its core employees.

Unicom will use the proceeds to

subscribe to not more than 6.65bn new

shares in its H-share subsidiary, China