Jewelry firm IPO sparkles on debut
By Hui Ching-hoo (China Daily)
Updated: 2007-04-19 09:51
Hong Kong-based jeweler Noble Jewelry Holdings witnessed a fairly remarkable performance in its IPO debut on Tuesday, which bodes well for latecomers such as Country Garden and China CITIC Bank.
Shares of the jewelry producer began to trade in Hong Kong on Tuesday, just days ahead of the two mega IPOs. And on the first day of trading, they gained 6.67 per cent over the offer price to close at HK$1.6.
Noble gained 5.33 per cent to reach HK$1.58 in the opening session. The momentum continued in the afternoon, when the share peaked at HK$1.8, before finally settling at HK$1.6. Some 53.36 million shares changed hands, involving a transaction of HK$88.72 million.
The rally is in line with market expectations. Analysts attributed it to the general bullish sentiment.
CASH Asset Management Associated Director Patrick Yiu said the share’s performance was bolstered by the IPO frenzy. “Despite the Country Garden and China CITIC Bank IPOs taking in an enormous amount of capital, investors have appetite for more.”
Guangdong-based property company Country Garden will debut for trading on April 20. Over 650,000 Hong Kong residents applied for the shares, making the IPO the second all-time high behind ICBC, taking in HK$310 billion.
The public offer of CITIC Bank also received an overwhelming response. The margin financing quota of eight local securities houses had to be exercised fully in the first day of the public offer period.
Noble Jewelry sold 78 million shares to raise HK$78 million. Some 7.8 million shares were allocated for public offer. The offer price was set at the top of the indicative range of HK$1.5 per share.
The jeweler said the proceeds would be used to expand production facilities, overseas sales network and repay debt. The company’s net profit increased from HK$28.3 million to HK$48.5 million between 2004 and 2006, while the turnover increased over 50 per cent to HK$547 million in 2006.
The company forecast that it will achieve 16 per cent growth in net profit this year, reaching HK$56 million.
(China Daily 04/19/2007 page15)
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