Tencent gets top dollar

After setting a realistic price range, Tencent is able to price at the top.

Improving market sentiment, renewed interest in the Chinese internet sector and a realistic valuation enabled Tencent to price at the top end of its price range on Friday. Under the lead management of Goldman Sachs, the instant messaging company priced a 420.16 million share deal at HK$3.70, raising HK$1.55 billion $199.3 million.

This represents 15.5 times earnings based on the mid-point of syndicate 2004 profit forecasts spanning Rmb400 million to RMB450 million $48.38 million to $54.43 million.

When Tencent first set out on pre-marketing, global sentiment was extremely weak and the company was careful to test the waters with an enormously wide...

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