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HONG KONG—New China Life Insurance Co. prepared to launch a $3 billion Hong Kong-Shanghai listing after receiving cornerstone pledges for a quarter of the deal
, while several of the region's most prominent tycoons attended an investor presentation by Chow Tai Fook Jewellery Group Ltd.—the latest indication of a growing appetite for big Hong Kong initial public offerings.Three other IPOs—by an auto dealer, a zinc miner, and a maker of jelly products, all Chinese—also began order-taking for a total of $786 million in Hong Kong IPOs. But volatile markets claimed a victim with Chinese department-store operator Charter Group Holdings Ltd. postponing order-taking for an IPO of as much as $350 million, people familiar with the situation said Monday.
New China Life Insurance, China's No. 4 life insurer by premiums, begins order-taking for the Hong Kong tranche of its Hong Kong-Shanghai listing Tuesday. Four cornerstone investors have pledged to buy a total of $780 million in the Hong Kong tranche, including Singapore-listed insurer Great Eastern Holdings Ltd., which is buying $380 million, people familiar with the deal said. The other investors are Malaysian sovereign-wealth fund Khazanah Nasional Bhd., hedge fund D.E. Shaw & Co., and Asian private-equity firm MBK Partners, the people familar with the deal said. Cornerstone investors are guaranteed large allotments in an IPO in exchange for agreeing to hold their shares for a certain length of time. The lockup periods of the New China Life cornerstone investors weren't immediately available.
New China Life is planning to list in Hong Kong on Dec. 16. It said in a statement earlier that it is selling up to 158.5 million mainland Class A shares, but gave no listing details. It plans to sell up to 412.2 million Hong Kong-listed shares, including an overallotment option.
Meanwhile, Chow Tai Fook, the jewelry retailer controlled by Hong Kong real-estate tycoon Cheng Yu-tung, began taking orders for its IPO of up to $2.8 billion with a lunch for investors that drew several high-profile businesspeople. Attendees at the lunch, where the investment bankers present the IPO candidate's background and financial details, included Lee Shau Kee, chairman of Hong Kong property giant Henderson Land Development Co.; Jack Ma, chairman of Chinese Internet company Alibaba; Peter Wong Tung-shun, Asian-Pacific chief executive at HSBC Holdings PLC; and Angela Leong, the fourth wife of Macau gambling mogul Stanley Ho.
The jewelry retailer is selling 1.05 billion new shares, or 10.5% of its enlarged capital, in an indicative price range of 15 Hong Kong dollars to 21 Hong Kong dollars (US$1.92 to US$2.69) each, according to a term sheet seen by Dow Jones Newswires Monday. That amounts to a valuation of between 15 times and 21 times 2013 forecast earnings, people familiar with the situation said earlier. Chow Tai Fook has more than 1,500 outlets mainly in China. It has said it could sell an added 20% of shares from Mr. Cheng and his family if demand warrants it, beyond an overallotment option. If both the 20% shares and the overallotment option are exercised, Chow Tai Fook's IPO could raise up to $3.9 billion, becoming the world's second-largest IPO since July, when Spain's BankiaSA raised $4.4 billion ahead of a Madrid listing.
"Only IPOs with good names can attract investors' interest in such a volatile market," said Alex Au, managing director of Richland Capital Management Ltd., a pan-Asian hedge fund based in Hong Kong.
The other IPOs that began order-taking Monday were Chinese car dealer Baoxin Auto Group Ltd., which is raising up to $527 million; zinc miner China Polymetallic Mining Ltd., which is seeking up to $163 million, and China Lifestyle Food & Beverages Group Ltd., which makes jelly products under its brand "Labixiaoxin," seeking up to $96 million, according to term sheets seen by Dow Jones Newswires on Monday.
Baoxin is selling 379.3 million shares at an indicative price range of HK$8.50 to HK$10.80 each ahead of listing in Hong Kong on Dec. 14, according to a term sheet. China Polymetallic is selling 500 million shares at HK$2.22-HK$2.54 each ahead of listing in Hong Kong on Dec. 14. China Lifestyle Food & Beverages Group is selling 282 million shares at a fixed price of HK$2.65 each ahead of listing in Hong Kong on Dec. 9.
source: online.wsj.com
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