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Shares of Intime Department Store soar in solid HK debut
By Lilian Liu
Updated: 2007-03-22 09:34 Shares in retailer Intime Department Store rose 13.2 percent in their market debut in Hong Kong on March 20, after the company raised $311 million in a heavily oversubscribed initial public offering in the city.
The share price soared to HK$6.10 in pre-opening trade, 13 percent higher than its issue price of HK$5.39 apiece. The retail portion of the offering was 230 times subscribed. The Hangzhou-based retailer sold 450 million shares at HK$5.39 apiece, or 30.8 times 2007 earnings, which was a 21 percent discount to Parkson Retail, the country's top department store chain. Parkson Retail trades at 39 times prospective earnings By comparison, regional rival Nanjing-based Golden Eagle Retail Group trades at a similar price-to-earnings ratio of 31.5 times. Morgan Stanley is the sponsor of the offering. Intime's three stores are spread across the country's third-richest province, East China's Zhejiang, and attract younger generation customers with trendy fashions and home appliances. The stores have become a shopping hotspot for the growing numbers of young well-off shoppers. To meet strong demand, the company will open 10 stores over the next five years and expand its scale through mergers and acquisitions, Intime said in a statement. The retailer's Hong Kong share sale also received overwhelming demand, with heavyweight investors all bidding for large orders. China Life and Hong Kong luxury goods magnate Dickson Poon bought a combined HK$390.6 million worth of Intime shares, representing some 16 percent of the deal issue price. Poon operates high-end stores selling Rolex and Chopard in Hong Kong, and also owns Ralph Lauren and S.T. Dupont boutiques and counters in Southeast Asia. Intime initially approached investors with a roadshow price range of HK$4 to HK$5.20, but soon revised it to a higher range of HK$4.36 to HK$5.39 in response to strong investor demand. The company's earnings this year are expected to jump 54 percent to 315 million from the 205 million yuan the company earned last year. (For more biz stories, please visit Industries)
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