Beijing Beida Jade Bird Universal Sci-Tech, a developer of security systems for internet coding, has cut the price of its initial share offer by 44% and closed the issue to retail investors as the rising number of IPOs in the pipeline curtailed demand.
Beijing-based Beida reduced the indicative price of the 24 million shares it is offering to HK$11 from an earlier range of HK$17.80 to HK$19.80. At HK$11 the company would raise HK$264 million ($33.8 million), down from an earlier target of up to HK$475.2 million. The company plans to set the final price on an unspecified date next week. Beida had planned to offer a portion of the shares to the Hong Kong public. Now it will offer them to institutions only.
"In view of the market environment we consider an institutional placing more suitable," says Calvin Ng, a corporate finance executive at Tai Fook Securities, which is managing the sale. "The company would have had to put a lot more effort into getting the public to buy the shares because there are so many choices out there."
Beida, whose biggest shareholder is Beijing University, plans to list the shares, representing about 25% of the company, on Hong Kong's Growth Enterprise Market. Trading in the shares is scheduled to begin 26 July. About 25 companies are considering GEM listings over the next few months, albeit at lower prices than they might have aimed for during the boom in tech shares at the beginning of the year.
Tomorrow another GEM candidate, AcrossAsia Multimedia, will price its IPO. The company is being spun off by the Indonesia-based Lippo Group conglomerate. The company is placing 180 million new shares at between HK$3 and HK$3.40 each. The company aims to provide broadband internet access, content and online shopping. BNP Prime Peregrine is managing the sale.