Citic Securities Co has decided to raise as much as HK$15.1 billion ($1.9 billion) from the initial share sale in Hong Kong, Bloomberg reported. China’s largest brokerage by market value is offering 995.3 million shares at HK $12.84 to HK$15.20 a piece, the reports said.
Citic Securities executives will begin meeting the potential investors today to market the sale, they said. The Shanghai-traded brokerage is attempting the biggest share sale in Hong Kong since Prada SpA raised $2.5 billion in an initial public offering in June.
The stock offerings have decreased since Prada’s initial public offering (IPO), as Europe’s rising sovereign debt crisis and a faltering US recovery crimped the demand for new equity. The price range values Citic Securities at 1.18 to 1.39 times estimated 2011 book value and at 13.4 to 15.9 times forecast 2011 earnings, according to a term sheet for the deal obtained by the agency.
11 Chinese brokerages listed in Shanghai trade at an average price-to-book multiple of 1.73 for 2011 and at 15.2 times estimated full-year earnings, as per data compiled by a news agency. In 2003, Citic Securities sold shares in an initial public offering in Shanghai.
The company has a market value of 122 billion yuan ($19 billion) as of yesterday’s close. It is 24% owned by Citic Group, China’s first state-owned investment corporation that was created in 1979. The shares of Citic Securities rose 0.2% to 12.30 yuan at 9.32 am in Shanghai today. The Beijing-based company plans to begin trading in HongKong on Oct 6.
Temasek Holdings Pte and Kuwait Investment Authority are among early investors who agreed to buy $850 million of stock in the share sale, according to the term sheet. They are among so- called cornerstone investors who get guaranteed shares in the offering in return for a pledge not to sell their stock immediately.
Headquartered in Shenzhen, Citic Securities was set up in 1995. It focuses on rendering securities related services like securities trading, underwriting and sponsoring, proprietary trading, asset management, securities investment advisory services and other businesses. In 2003, the Company was taken public and listed on the Shanghai Stock Exchange.
