Audi dealership Sunfonda said to plan $150m Hong Kong IPO

Bloomberg News (Hong Kong) - Sunfonda Group, a Chinese auto dealership that sells Audi cars, plans to raise about $150 million in a Hong Kong initial public offering, said two people with knowledge of the matter.

The Xi'an, Shaanxi-based company is working with Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) on the IPO, said the people, who asked not to be identified because the information is private. The sale may take place in 2014, one person said.

Sunfonda would become the sixth auto dealer to list shares in Hong Kong since the start of 2010. The other five, including Baoxin Auto Group Ltd. (1293) have lost an average of about 23 percent from their IPO prices as sales in China slowed.

Founded in 2000, Sunfonda was the first Audi dealership in the western Chinese province, according to its website. Company officials didn't respond to calls made to its Xi'an office seeking comment.

Sales of premium cars in China will probably increase about 4 percent this year, Bob Socia, General Motors Co. (GM)'s China head, said this month. That's about half the pace that the U.S. automaker had expected at the start of 2013.

China Harmony Auto Holding Ltd. (3836), a Zhengzhou, Henan-based luxury auto dealership, raised about $220 million in a Hong Kong IPO this month. The stock had lost 21 percent from its offer price as of yesterday's close.

Audi Demand

China Yongda Automobiles Services Holdings Ltd. (3669), which also sells Audis among other luxury brands, is the only Hong Kong-listed automaker to still trade above its IPO price, data compiled by Bloomberg show. At HK$6.85 apiece, the shares are up about 4 percent since their debut.

Volkswagen AG's Audi, the bestselling premium brand in China, sold 407,738 vehicles last year, according to researcher LMC Automotive in Shanghai. Bayerische Motoren Werke AG ranked second having sold 313,638 while Daimler AG's Mercedes-Benz was third with 207,099, LMC reports.

The three German luxury automakers, which all build cars in China, have quadrupled their local production in the last five years and now account for about 75 percent of the premium cars sold in the world's biggest auto market, LMC data show.