For China Plays, Pricing Is Key
Anyone watching the recent flurry of initial public offerings in Hong Kong, including several sparkling debuts, could be forgiven for thinking last year's frenzy for China stocks has made a comeback.
But despite the recent glowing debuts of Inner Mongolian dairy China Mengniu Dairy Co., instant-messaging firm Tencent Holdings Ltd. and Chinese sportswear company Li Ning Co., being a China play is no longer enough to draw investors.
Nowadays, to stand a chance of getting listed successfully, a China company has to be priced well -- which often means toward the lower end of the range -- in addition to being of good quality.
"A lot of funds nowadays are wary that markets are heading down, and they're very sensitive about pricing," said a senior banker at a major U.S. investment bank. "Other major fund accounts didn't have a good May and June, so they're focusing on the stocks they've got and aren't playing the [new-issues] market."
This isn't the market of late last year, when China Life Insurance Co. saw its shares surge 26% on their first day of trade. The Hang Seng Index has been flagging since it ended Feb. 18 at its 35-month high of 13928.38, courtesy of worries about higher interest rates and China's efforts to tighten credit.
The blue-chip index finished Wednesday at 12320.26.
And in this kind of market, some sectors -- namely those that appeal to consumers -- fare better than others.
"If you look back in the past 10 years, you'll see consumer stocks have always done well regardless of the state of the market," said CLSA Equity Capital Markets Managing Director Tim Ferdinand. "China's consumer market is booming."
No wonder, then, that Mengniu Dairy ended its first day of trading June 10 about 24% higher than the IPO price of 3.925 Hong Kong dollars (50 U.S. cents) a share, having raised HK$1.37 billion in a share sale that drew a strong response from investors. Or that shares of Li Ning ended their first day on Hong Kong's main board June 28 up 9% from their IPO price.
In contrast, technology firms going public have failed to recapture their allure during the dot-com years. TOM Online Inc., the Internet spinoff of tycoon Li Ka-shing's media flagship TOM Group Ltd., ended 7% lower on the day of its debut in March.
Consumer plays aren't the only winning investments. A unique edge and a small issue size also tend to help.
A winner on that score was Tencent Holdings, the operator of QQ, China's largest instant-messaging platform, which saw its shares end 12% higher on their first day of trading on Hong Kong's main board in mid-June.
Otherwise, an often dismal view of where the market is heading has made investors more selective. China's monetary-tightening moves, on top of rising global interest rates, have damped interest in China issues. Meanwhile, expensive pricing has been blamed for the recent spate of unimpressive debuts by several large IPOs. Shares of major Chinese life insurer Ping An Insurance Co. -- Hong Kong's biggest IPO so far this year -- rose just 0.7% in their June 24 debut, even though they were priced at the lower end of the range. Shares of China Shipping Container Lines Co., priced at the low end of the range, fell 12% on their June 16 Hong Kong debut.
Late last month, China-based chip foundry CSMC Technologies Corp. aborted plans for a new issue just four days before its scheduled June 28 listing, one of the first major cancellations by a Hong Kong IPO in more than a year. The company, which had raised HK$683 million, cited its failure to agree on pricing with lead manager Citigroup Inc.
Other Hong Kong IPOs that have been stumped by delays include Hutchison Telecom International Ltd., part of conglomerate Hutchison Whampoa Ltd.; China Netcom Corp., part of one of China's biggest telephone companies; and China Minsheng Banking Corp., founded nearly a decade ago as the country's first privately held bank.
Bankers say the IPO pipeline looks empty for the rest of the summer and that most of 2004's other deals will come toward year end. A few jumbo offerings the market is awaiting include Netcom's US$2 billion IPO; China Minsheng's US$1 billion offering; and China Construction Bank's raising of as much as US$5 billion in capital.
Ultimately, while China plays no longer automatically command a high price, there will be takers for the IPOs as long as they present a strong case to investors, bankers said.
"Whatever the [condition of the] market, good quality companies will always be welcomed by investors," said Alex Ko, chairman of Hong Kong investment bank Goldbond Capital Holding Ltd. and a member of the Hong Kong stock exchange's listing committee.
中国IPO成功的关键是定价
看看最近香港市场的首次公开募股状况，有一些的表现相当不错，这难免会让人觉得去年中国公司竞相上市的疯潮又回来了。
可是，尽管内蒙古的乳品公司蒙牛乳业(China Mengniu Dairy Co.)、即时消息平台腾讯控股有限公司(Tencent Holdings Ltd.)以及中国运动服装公司李宁有限公司(Li Ning Co.)首日上市都取得了不俗的表现，但IPO仅凭藉自己的中国概念色彩已经不足以吸引投资者了。
如今，要想抓住机会成功上市，一家中国公司必须做好定价工作──这通常意味著要把价格定得更低一些──但公司的品质丝毫不能下降。
美国某著名投资银行的资深人士说，“现在市场仍处在下行趋势中，很多投资基金都非常谨慎，它们对定价十分敏感；还有一些大型基金五月和六月的收益状况不佳，它们此时更关心手头现有的股票，没有兴趣参与新股。”
如今的市场行情与去年末相比已大不一样，当时中国人寿(China ife Insurance Co.)首日上市就大涨26%。恒生指数今年2月18日达到35个月高点13928.38点，随后就开始回落，市场担心利率可能会上调以及中国大陆的紧缩信贷将产生负面影响。
在这种形势下，消费类股的表现通常会好于其他类股。
CLSA Equity Capital Markets的董事总经理蒂姆?斐迪南(Tim Ferdinand)说，“回首过去十年，不管市场走势如何，消费类股的表现都不错，中国的消费市场正在蓬勃发展”。
难怪蒙牛乳业6月10日首日上市的收盘价较IPO发行价上涨了大约24%。该股的发行价是3.925港元(合50美分)。在执行增售选择权之前发行的3.5亿股股票获得投资者的热烈认购，总计为该公司融资13.7亿港元。李宁有限公司6月28日首日在主板上市时股价较IPO发行价上涨了9%。
相比之下，科技公司IPO已经难以恢复互联网繁荣时期的鼎盛。从香港大亨李嘉诚(Li Ka-shing)的媒体旗舰TOM集团(TOM Group Ltd.)分拆出来的TOM Online Inc.今年3月份上市首日下跌了7%。
消费类股并不是唯一的赢家。如果具备独特的优势，或是发行规模较小，上市后的表现可能也不错。
腾讯就是个例子。该股6月中旬在香港主板首日上市时就上涨了12%。
对于其他类IPO，投资者在低迷的市场形势下就显得格外挑剔了。中国大陆紧缩银根，加之全球利率水平正在提高，中国新股也因此遭殃。同时，定价过高也是最近一些大型IPO表现不好的原因之一。平安保险(Ping An Insurance Co.)──香港今年以来最大的IPO──在6月24日首日上市时仅上涨了0.7%，尽管该股的价格已经处于定价区间的低端。中海集装箱运输(China Shipping Container Lines Co.)的发行价也处于定价区间的低端，但6月16日首日上市时还是下挫了12%。
上个月底，总部位于中国的晶片专业制造商华润上华科技有限公司(CSMC Technologies Corp.)取消了其拟筹资6.83亿港元的IPO计划，公司将之归因于无法与牵头行花旗集团(Citigroup Inc.)在IPO定价问题上达成协议，成为香港市场一年多来第一个取消发行的大陆上市公司。
其他推迟香港IPO的公司还有：分拆上市的Hutchison Telecom International，它是经营范围从门户网站到电信业务无所不包的综合企业和记黄埔有限公司(Hutchison Whampoa Ltd., 0013.HK)主要的非3G全球电信资产；中国4大电话公司之一的中国网络通信有限公司(China Netcom Ltd., 简称:中国网通)；及大约10年前成立的中国首家民营银行中国民生银行股份有限公司(China Minsheng Banking Corp.)。
投资银行人士称，夏季的IPO非常少，今年剩余的IPO都要到年底了。市场未来将迎来的几个大型IPO计划有：中国网通的20亿美元IPO、民生银行的10亿美元IPO，还有中国建设银行(China Construction Bank)也要集资多达50亿美元。
投资银行人士称，虽然中国的公司不像从前那样总能获得较高的IPO定价，但只要是一家好的公司，它的IPO还是能够找到买主的。
香港的投资银行金榜集团(Goldbond Capital Holding Ltd.)董事长Alex Ko说，“不管市场形势怎样，高质量的公司总会受到投资者的欢迎”。他是香港交易所(Hong Kong stock exchange)上市委员会的成员之一。
