PRINT THIS PAGE The Beauty of Being Quoted14/11/2007. Source: Asia Private Equity Review (APER). 
Private equity-backed companies race to become public on various listing platforms. There has been no respite in the number of private companies seeking to become publicly-quoted stocks. Between 5th October and 2nd November, there were 11 initial public offerings in which private equity investors have had an interest, and they have successfully raised US$6 billion from the public. Despite fierce competition from NASDAQ and the New York Stock Exchange (‘NYSE’), the Hong Kong Stock Exchange (‘HKSE’) is clearly the most preferred listing venue, accounting for 74% of the funds raised, followed by NYSE which took up 23%, with NASDAQ accounting for the remaining 3% (fig. 28).
The bourses in the USA, which once commanded the lead in staging mega public offerings have now lost primacy to HKSE, the most active stock market in the Greater China region. In these 11 public offerings being surveyed, HKSE accounted for two of the largest floats while NYSE trailed in the third position.
Among these 11 private equitybacked companies, the largest public offering was SOHO China. It raised a staggering US$1.9 billion. A construction company in Beijing, on 8th October 2007 SOHO China received US$29.2 million from Standard Chartered Private Equity. At SOHO China’s initial public offering (‘IPO’), the private equity firm did not dispose of its holdings.
Bosideng International Holdings Ltd., (‘Bosideng’), which had invited HSBC Private Equity (Asia) to become its investor back in June 2006, was the second largest offering among these 11 companies. On 10th October, the winter coats maker made its debut on the HKSE, and raised HK$7.44 billion (US$953.93 million).
HSBC Private Equity (Asia), which had invested a total of US$70 million in Bosideng, sold a portion of its holdings and clocked an initial return of US$49.6 million to its coffers.
The NYSE narrowly defeated HKSE in hosting the third largest public offering among these 1. On 31st October, Giant Interactive Group Inc. (‘Giant Interactive’), one of China’s leading online game developers, was listed. Standard Chartered Private Equity agreed to subscribe to 1.63 million shares at Giant Interactive’s initial public offering price. The entire transaction committed by the global private equity investment arm of Standard Chartered Bank amounted to US$25 million. It did not dispose of its holdings in the online game operation.
Overall, private equity investors are entrenched in China’s growth story. Companies in construction businesses, such as SOHO China and China Aoyuan Property Group Ltd., and those in consumer goods, such as China Dongxiang (Group) backed by Morgan Stanley Private Equity Asia, accounted for over 61% of the US$6 billion raised at these public offerings, followed by the information technology sector that accounted for 19% (fig. 29).
In October, private equity investors have been able to record some of the most outstanding returns in Asian private equity during the period. Baring Private Equity Asia sold its entire holdings in Hidili Industry International Development Ltd. and clocked an additional return of HK$3.01 billion from this investment that spanned over 13 months. The private equity firm first committed an approximate US$42 million in equity capital to Hidili in September 2005 and sold 80 million shares at Hidili’s initial public offering. Baring Private Equity Asia is estimated to have recorded an aggregate return of US$421.51 million from this single investment (fig. 30).
Asia Private Equity Review (APER) is the foremost voice on matters related to private equity/venture capital in the region. Well-recognised as being the singular source for accurate and timely news, in-depth analysis and global perspectives, APER is published by the Hong Kong-based Centre for Asia Private Equity Research. For further information please visit their website at www.asiape.com or email them at info@asiape.com
|
