Securities firm Shenwan Hongyuan raises $1.16b in HK IPO

FILE PHOTO: The Hong Kong Exchanges flag, Chinese national flag and Hong Kong flag are hoisted outside the Hong Kong Stocks Exchange in Hong Kong June 7, 2016. REUTERS/Bobby Yip/File Photo

Chinese securities firm Shenwan Hongyuan Group Co Ltd has priced its Hong Kong share offering at the bottom end of a marketed range, raising $1.16 billion, two people with direct knowledge of the matter said.

The deal is Asia’s biggest listing so far this year and the world’s sixth largest, Refinitiv data showed.

Shenwan Hongyuan had set an indicative price range of HK$3.63-HK$3.93 per share ($0.4628-$0.5010) for the 2.5 billion shares on offer.

There is a greenshoe, or over-allotment option, of up to 15 percent, which could bring the total raised to $1.3 billion.

Shenwan Hongyuan did not immediately reply to a request for comment.

Hong Kong had a stellar 2018 in terms of stock market listings, with companies raising $36.3 billion in the city – the most of any stock exchange globally.

This year, however, is likely to be slower as the stream of companies in China looking to go public thins.

Companies have raised $2.9 billion in initial public offerings in Hong Kong so far in 2019, compared with $6.4 billion raised on the Nasdaq in New York, Refinitiv data showed.

Shenwan Hongyuan secured 13 cornerstone investors for its Hong Kong listing, which together committed to buy about $829 million worth of shares, a term sheet showed.

The cornerstone investors include ICBC Asset Management Scheme Nominee, Huaxia Life Insurance , China Life Insurance , China Reinsurance Corp and New China Life Insurance Co Ltd.

Shenwan Hongyuan plans to use the proceeds to develop its enterprise finance business for merger-and-acquisition clients, provide a one-stop investment banking service for enterprise clients, and develop its personal finance business for wealth management needs, its draft prospectus showed.

ABC International, Goldman Sachs, ICBC and a unit of Shenwan Hongyuan are joint sponsors for the Hong Kong float, the prospectus showed. The shares will begin trading on April 26. Shenwan Hongyuan is already listed in Shenzhen.

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Reuters