China Construction Bank (CCB), the country's second largest commercial bank, raised 58.05 billion yuan (7.7 billion U.S. dollars) in its Shanghai initial public offering (IPO), the Shanghai Securities News reported Wednesday.
This made CCB's IPO the biggest domestic listing, exceeding the 46.6 billion yuan of the Industrial and Commercial Bank of China (ICBC) in October last year.
The bank, Chinese partner of the American Bank, set the price for its IPO at 6.45 per share, the high end of its price range, due to record subscriptions. The price translated into a price-to-earnings ratio of 32.91 times.
It attracted 2.26 trillion yuan in subscriptions for its yuan-denominated A-share sale, exceeding the 1.9 trillion yuan received by the Bank of Beijing, the country's largest city commercial bank a week ago.
Analysts said investors chased CCB's shares because of its good profitability and bright growth prospect.
The bank issued 9 billion shares, less than 3.85 percent of the expanded capital after the IPO and the proceeds would be used to boost its capital adequacy ratio.
The bank's earnings per share in the first half of 2007 was 0.15 yuan, compared with 0.12 yuan for the ICBC and Bank of China.
Its non-performing loans ratio stood at 2.95 percent at the end of June, lower than the 3.29 percent half a year ago.
The shares are likely to start trading at 7.8 to 9.6 yuan on the Shanghai Stock Exchange on Sept. 25, the newspaper said.
The Chinese government encourages its red-chip companies to launch the yuan-denominated A-share IPOs amid efforts to absorb excessive liquidity and help cool down the heated stock market that has more than doubled since the beginning of the year.
On Monday the China Securities Regulatory Commission gave go-ahead to the IPO plan of another red-chip China Shenhua, the country's largest coal producer, to issue up to 1.8 billion A-shares.
(one U.S. dollar equals 7.517 yuan)
Source: Xinhua
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