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Chinese property developer CentraLand launches IPO

Zhengzhou-based firm’s shares priced at 50 cents; offer closes on Jan 30

CHINESE property developer CentraLand Ltd yesterday launched its initial public offering (IPO) of 245 million new shares at 50 cents each for a mainboard listing on the Singapore Exchange.

The company, based in the city of Zhengzhou in Henan province, expects to raise net proceeds of about $113.9 million, after expenses.

The IPO comprises five million shares available to the general public and 240 million placement shares.

CentraLand said that at 50 cents each, the offer shares are priced at a discount of about 11.3 per cent to its estimated net tangible assets per share of 56.4 cents as at end-June last year.

CentraLand chief executive Yan Tao said: ‘Our listing marks the beginning of a new phase for CentraLand and serves as a launching pad for us to take CentraLand to its next phase of growth.’

Of the expected $113.9 million in net proceeds, $38.3 million will be used to buy land, $70.6 million to boost a subsidiary’s capital base, and the rest as working capital.

The company is banking on increasing investment in property developments in Zhengzhou, growth in the city’s population and rising disposable income among the city’s residents to drive its growth.

The company’s revenue rose 89.9 per cent to 276.5 million yuan (S$55.2 million) in 2006 – based on its most recent audited full-year financial statements – from 145.6 million yuan in 2005. Its net profit in 2006 was 45.4 million yuan, up from 15.1 million yuan the previous year.

For the first six months of 2007, the company recorded revenue and net profit of 150.8 million yuan and 17.8 million yuan respectively.

Boulton Capital Asia is the issue manager and UOB Kay Hian is the underwriter and placement agent for CentraLand’s IPO.

The IPO opens today and closes on Jan 30. The shares are expected to begin trading on Feb 1.

 

Source: Business Times 23 Jan 08

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