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MarketScreener Homepage  >  Equities  >  Shanghai Stock Exchange  >  Industrial and Commercial Bank of China Limited    601398   CNE000001P37

INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED

(601398)
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Investors line up for Ant Group's record $34.4 bln IPO

10/26/2020 | 06:54am EST

* Chinese fintech group announces IPO terms

* Hong Kong leg of dual listing oversubscribed soon after launch

* Plans to list in Shanghai and Hong Kong on Nov. 5

* Deal will also boost tech-focused STAR Market

* Company under regulatory and U.S. scrutiny

HONG KONG, Oct 26 (Reuters) - Ant Group Co Ltd is poised to raise up to $34.4 billion in the world's largest stock market debut as investors rush to buy into the fast-growing Chinese fintech giant despite risks of greater scrutiny at home and abroad.

The dual listing, a first for Shanghai's Nasdaq-style STAR Market and Hong Kong, would value Ant at about $312 billion before a so-called greenshoe option for a 15% overallotment of shares.

At that valuation, Ant is worth more than Industrial and Commercial Bank of China, the world's biggest bank by assets. The money raised will also shatter the record set by oil major Saudi Arabian Oil Co (Saudi Aramco) with its $29.4 billion listing last December.

Jack Ma, the billionaire founder of Ant and affiliate Alibaba Group Holding , said it was a "miracle" that such a large listing is taking place outside New York.

Ant's looming market debut had been clouded by concerns over growing regulatory scrutiny at home for its lucrative consumer credit business as well as a U.S. State Department proposal to add the company to a trade blacklist.

Global investors, however, have largely shrugged off those concerns as they bet on continued rapid growth of a group that also operates China's biggest mobile payments platform and distributes wealth management and insurance products.

"The fear of missing out and the lack of other opportunities of this calibre" was spurring investor interest in the IPO, said Justin Tang, head of Asian research at investment adviser United First Partners in Singapore.

BOOKS OVERSUBSCRIBED

Ant's order books on the Hong Kong offering to institutional investors was oversubscribed one hour after the launch, two people with direct knowledge of the matter said.

Many prospective investors placed orders worth at least $1 billion in the first hour, said one of the sources, adding that the number of the institutional orders could reach about 1,000.

Ant declined to comment on investor demand.

Headquartered in the Chinese city of Hangzhou, Ant is aiming to raise about $17.2 billion in Shanghai and roughly the same in Hong Kong.

The group has earmarked 80% of its domestic offering to 29 strategic investors that will be locked up for at least one year. A wholly-owned unit of Alibaba has agreed to purchase 44% of the Shanghai float. Other strategic investors in the Shanghai float include China's National Council for Social Security Fund, a unit of Singapore state investor Temasek Holding, as well as Singaporean and Abu Dhabi sovereign wealth funds GIC and Abu Dhabi Investment Authority. Large Chinese insurers and mutual funds will also have shares allocated via the strategic investor route, Monday's filing showed.

RECORD DEBUT

Ant shares are expected to start trading in Hong Kong and Shanghai on Nov. 5, two days after the U.S. election.

The company set the price tag for the Shanghai leg of the listing at 68.8 yuan ($10.27) per share and HK$80 ($10.32) per share for the Hong Kong tranche, the exchange filings showed.

The price represents a multiple of 31.4 times Ant's 2021 earnings and 24.2 times its 2022 earnings forecast, said a source with direct knowledge of the matter.

Ant declined to comment on the price multiples.

The group's China listing would eclipse the record set there previously by Agricultural Bank of China's $10.1 billion float in 2010. The record in Hong Kong was set by insurance major AIA's $20.5 billion offering in 2010.

The bookbuilding for the Hong Kong leg will run from Monday to Friday, while books for the Shanghai leg open for one day on Thursday.

Ant's IPO would also serve to burnish STAR's status.

Companies raised $22.5 billion via IPOs and secondary listings on STAR between the start of the year and mid-October, making it the third-biggest stock market behind Nasdaq and Hong Kong, Refinitiv data shows. ($1 = 6.7005 Chinese yuan renminbi)

(Reporting by Julie Zhu and Scott Murdoch Additional reporting by Samuel Shen in Shanghai and Anshuman Daga in Singapore Writing by Sumeet Chatterjee Editing by Kirsten Donovan, Jane Merriman and David Goodman)


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
AGRICULTURAL BANK OF CHINA LIMITED -0.89% 3.33 End-of-day quote.-9.76%
ALIBABA GROUP HOLDING LIMITED -1.02% 261.32 Delayed Quote.24.47%
BANK OF CHINA LIMITED -0.36% 2.74 End-of-day quote.-17.72%
INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED -0.37% 5.45 End-of-day quote.-7.31%
LONDON BRENT OIL 0.50% 48.18 Delayed Quote.-27.74%
NASDAQ COMP. -0.05% 12349.366333 Delayed Quote.35.96%
SAUDI ARABIAN OIL COMPANY -0.14% 35.9 End-of-day quote.1.84%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) 0.09% 6.5461 Delayed Quote.-5.89%
WTI 0.70% 45.19 Delayed Quote.-26.33%
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Financials
Sales 2020 819 B 125 B 125 B
Net income 2020 292 B 44 480 M 44 480 M
Net Debt 2020 - - -
P/E ratio 2020 5,36x
Yield 2020 5,74%
Capitalization 1 843 B 281 B 281 B
Capi. / Sales 2020 2,25x
Capi. / Sales 2021 2,11x
Nbr of Employees 445 106
Free-Float 67,1%
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Mean consensus BUY
Number of Analysts 25
Average target price 5,08 CNY
Last Close Price 4,31 CNY
Spread / Highest target 56,2%
Spread / Average Target 18,0%
Spread / Lowest Target -7,07%
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Shu Gu Vice Chairman, President & General Manager
Si Qing Chen Chairman
Guo Zhong Yang Chairman-Supervisory Board
Wen Wu Zhang Senior Executive VP, GM-Finance & Accounting
Wei Zhang Member-Supervisory Board