Nothing jinxes IPO success for China Oriental

Bull market for China stocks continues as steel play, China Oriental, closes many times covered.

Steel billet maker China Oriental secured a HK$1.93 billion $248 million IPO at the very top end of its indicative range yesterday Tuesday. With JPMorgan and Merrill Lynch as joint bookrunners, a 700 million share offering was priced at HK$2.75 per share after being marketed on a wide range spanning HK$2.10 to HK$2.75.

At this level the IPO was priced on a syndicate 2004 PE ratio of 6.1 times. This in turn represented an approximately 25% discount to the 8.3 times PE average of the big three Chinese steel manufacturers listed on the Hong Kong Stock Exchange - Maanshan Iron Steel, New Angang Steel and...

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