Shanghai, February 22 (Gasgoo.com) China's auto dealer Zhongsheng Group Holdings Ltd. today started marketing for a Hong Kong IPO (initial public offering) to raise as much as $1 billion, Bloomberg reported, citing sources familiar with the plan.
The company, based in northeastern city of Dalian, plans to start taking orders on March 3, said the insiders, adding that the share sale, which may raise $600 million to $1 billion, is scheduled to be priced around March 12 with stock trading to start March 19.
Last year, China overtook the U.S. as the world's largest auto market with sales jumping 46% to 13.6 million vehicles. In the increasing competition, dealers will play a critical role for global automakers by handling the greater part of customer interactions.
Zhongsheng operates 47 "4S" (sales, spare parts, service and survey) car dealership shops around China for mid-end to luxury brands including Mercedes-Benz, Lexus, Audi and Nissan. It plans to open 28 new dealerships and acquire 20 others this year.
The investment banking unit of Bank of China Ltd. estimated Zhongsheng's 2010 net profit at 1.15 billion yuan, more than double last year's 467 million yuan, as its network of dealership expands and product mix improves.