The China Construction Bank (CCB), the second largest state-owned commercial bank in China, has set the price range of its A-share Initial Public Offering (IPO) at between 6.15 yuan and 6.45 yuan per share, Friday's Shanghai Securities News reports.
CCB plans to issue up to 9 billion A shares on the domestic equity market. The price range was decided after CCB staged a three-day promotion campaign in four main cities, namely Shanghai, Shenzhen, Guangzhou and Beijing, from Sept. 11 to 13.
This share price translates into a P/E (price-to-earnings) ratio of between 31.38 and 32.91 times, according to the IPO's main underwriters China International Capital Corporation, CITIC Securities and China Cinda Asset Management Company.
Experts predict CCB will finally issue the shares at the high end of the price range, a practice followed by recently listed banks, including Nanjing Bank and Ningbo Bank, and by the soon-to-list Bank of Beijing.
Based on the price of 6.45 yuan per share, the funds raised would possibly surpass 58 billion yuan, much higher than the 46.6 billion yuan raised by the Industrial and Commercial Bank of China through its then record A-share IPO in 2006.
Bank of America is a strategic investor of CCB, holding a 8.52 percent stake before CCB's A-share issue.
A report by China Cinda Asset Management Company predicted that earnings per share of CCB in 2007 would stand at 0.28 yuan and it would increase to 0.37 yuan in 2008.
Analysts with Ping'an Securities predicted the trading price on Sept. 25when the CCB listing is launched would hit between 7.2 yuan and 8.75 yuan. (One U.S. dollar equals to 7.52 yuan)
Source: Xinhua
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