Chinesepod - CCB may raise US$7.73b in upcoming IPO

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CCB may raise US$7.73b in upcoming IPO

By Song Hongmei (chinadaily.com.cn)
Updated: 2007-09-14 16:07

Hong Kong-listed China Construction Bank (CCB) will net up to 58.05
billion yuan (US$7.73 billion) selling yuan-backed A-shares in Shanghai,
Friday's China Business News reported.

CCB, which plans to sell up to nine billion A shares, is offering shares
at a price ranging between 6.15 yuan and 6.45 yuan per share, the
nation's second-largest bank said in a statement to the Shanghai Stock
Exchange yesterday.

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If the shares sell near the high end of the price range, the IPO would be
the largest on the domestic market to date. The high end of the range
represents a 6.36 percent discount from yesterday's closing price of the
bank's Hong Kong-listed shares.

Final pricing will be set on September 19, with A shares to begin trading
on the Shanghai bourse on September 25.

"The price range has been set reasonably, which will be attractive to
investors," the newspaper quoted a fund manager as saying.

Up to 3.15 billion A-shares, or 35 percent, will be sold to institutional
investors, and the remainder will be sold to retail investors, according
to the statement.

The price range translates to a price-to-earnings (P/E) ratio of between
31.38 and 32.91 times the bank's diluted earnings for 2006, said the
statement. At September 13, the P/E ratio of the Industrial and
Commercial Bank of China was 44.28 and that of Bank of China was 36.06.

China International Capital Company, CITIC Securities and Cinda Assets
Management Company are the underwriters of the share sale.

CCB is selling shares to bolster its finances, allowing it to extend more
loans and fuel the nation's economic expansion, according to its
prospectus.

Established in 1954 to finance building roads, bridges, dams and other
infrastructure, CCB has grown to be the country's largest mortgage and
real estate lender. It provides 22 percent of the nation's mortgages and
about 13 percent of overall loans, Bloomberg reported.

The lender's profit rose 47 percent in the first half of this year from a
year earlier on more lucrative lending and increased fee-based services.

As of June 30, the bank's assets totaled 6117.8 billion yuan. Its
non-performing loan ratio of 2.95 percent was the lowest of China's four
largest State-owned banks.

Bank of America Corp, which paid US$2.5 billion?for a 9 percent stake in
CCB in 2005, will see its stake diluted to 8.2 percent. Central Huijin
Investment Co, China's State-owned investment company, will control 59.1
percent of the bank.

CCB was listed in the Hong Kong stock exchange in October 2005. It issued
26.49 billion shares on Hong Kong stock market and raised US$9.2 billion.

(For more biz stories, please visit Industry Updates)

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