Henderson Cyber, the internet and technology arm of Hong Kong's Henderson Land property group, fell 1.6% below its offer price during its first day's trading on the Growth Enterprise Market. Grandmass Enterprise Solutions, a Hong Kong computer software and services company, rose 4%, albeit off the lowest price ever set for a GEM stock.
Henderson Cyber fell to HK$1.23 from HK$1.25. Earlier the shares fell as low as $1.17. The company sold 750 million shares to institutions to raise HK$937.5 million ($120 million). Grandmass shares rose to HK$0.52 from its offer price of HK$0.50. Grandmass is the first company to offer its shares for less than HK$1 each. The company sold 119.15 million shares to raise HK$59.6 million.
The low price set by Grandmass is being followed by other companies preparing to list in the next two weeks. Panda-Recruit, a Hong Kong-based job hunting company, has cut its target price in half to between HK$0.26 and HK$0.30 in a bid to place 120 million shares and raise up to HK$159.6 million. HKCyber.com, a financial news portal, slashed its offer by 81% to between HK$0.60 to HK$0.80, from its original price of HK$3.20 two months ago. It plans to place 250 million shares to raise up to HK$200 million.
"What's happening is that companies are coming out of the period of mourning for the bubbly high valuations of earlier this year," says KS Lo, chairman of the GEM listing committee. "They've accepted the pain and are now coming back to the market at cheaper, more realistic prices."
Other companies set to list for less than HK$1 include Shanxi Central Pharmaceutical International, a mainland maker of Chinese medicine. The company plans to issue 105 million shares at HK$0.85 to raise HK$89.3 million on the Hong Kong Stock Exchange. It will issue 90 million shares to institutions and 15 million to the public.