Phoenix Publishing IPO

Phoenix Publishing seeks $704 million from Shanghai IPO

The company values its shares at a big premium to the market, but still attracts enough institutional demand to cover the books 12 times.

China’s equity markets continue to produce big initial public offerings, despite a weak secondary market and an overheated primary market. Phoenix Publishing Media Corp, a leading publishing group in China, plans to raise up to Rmb4.48 billion $704 million through an IPO in Shanghai to fund expansion.

The Jiangsu-based group is yet another issuer testing investor appetite with a high valuation. It is offering 509 million new shares at between Rmb8 and Rmb8.8 each, which suggests the company could raise Rmb4 billion to Rmb4.48 billion, valuing it at 57 times to 63 times earnings.

The price-to-earnings ratio is much higher than the Shanghai exchange’s average valuation of...

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