| Retailer's stock soars in solid HK debut |
BEIJING, March 22 -- Shares in retailer Intime Department Store rose 13.2 percent in their market debut in Hong Kong on March 20, after the company raised $311 million in a heavily oversubscribed initial public offering in the city.
The share price soared to HK$6.10 in pre-opening trade, 13 percent higher than its issue price of HK$5.39 apiece. The retail portion of the offering was 230 times subscribed.
The Hangzhou-based retailer sold 450 million shares at HK$5.39 apiece, or 30.8 times 2007 earnings, which was a 21 percent discount to Parkson Retail, the country's top department store chain. Parkson Retail trades at 39 times prospective earnings
By comparison, regional rival Nanjing-based Golden Eagle Retail Group trades at a similar price-to-earnings ratio of 31.5 times.
Morgan Stanley is the sponsor of the offering.
Intime's three stores are spread across the country's third-richest province, East China's Zhejiang, and attract younger generation customers with trendy fashions and home appliances. The stores have become a shopping hotspot for the growing numbers of young well-off shoppers.
To meet strong demand, the company will open 10 stores over the next five years and expand its scale through mergers and acquisitions, Intime said in a statement.
The retailer's Hong Kong share sale also received overwhelming demand, with heavyweight investors all bidding for large orders.
China Life and Hong Kong luxury goods magnate Dickson Poon bought a combined HK$390.6 million worth of Intime shares, representing some 16 percent of the deal issue price.
Poon operates high-end stores selling Rolex and Chopard in Hong Kong, and also owns Ralph Lauren and S.T. Dupont boutiques and counters in Southeast Asia.
Intime initially approached investors with a roadshow price range of HK$4 to HK$5.20, but soon revised it to a higher range of HK$4.36 to HK$5.39 in response to strong investor demand.
The company's earnings this year are expected to jump 54 percent to 315 million from the 205 million yuan the company earned last year.
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