Shanghai, March 9 (Gasgoo.com) China's automobile dealer Zhongsheng Group will start taking orders for a downsized initial public offering (IPO) tomorrow in Hong Kong after last week's delay, Bloomberg reported today, citing sources.
The company based in Dalian, northeastern China, may seek to raise as much as HK$3.67 billion ($473 million) selling 286.2 million shares, or a 15.5% stake, at HK$9.54-12.83 each, said one of the sources. Zhongsheng previously hoped to raise $800 million to $1 billion.
The IPO price range values Zhongsheng at 14.2-19.1 times this year's earnings per share. Bank of China (BOC), involved in the IPO, estimated Zhongsheng's 2010 net profit at 1.15 billion yuan, more than double last year's 467 million yuan, as its dealership network expands and product mix improves.
BOC International Holdings Ltd., Morgan Stanley and UBS AG are handling Zhongsheng's IPO, which is scheduled to be priced March 19. The stock is slated to start trading on March 26.
Zhongsheng's business focuses on luxury and mid-to-high-end auto brands like Mercedes-Benz, Lexus, Audi and Toyota. It originally planned to kick off a road show for the Hong Kong IPO last week and to start taking orders on March 3.
The auto dealer operates 47 "4S" shops nationwide and plans to open 28 new dealerships and acquire 20 others this year. In the increasingly competitive auto market, dealers play a key role for global automakers.
