Retailing, Franchising, and Consumerism Business Intelligence in China

Xinhua Winshare Plans IPO In Hong Kong

Chinese book publisher and retailer Sichuan Xinhua Winshare Chainstore plans to raise up to US$275 million in an initial public offering in Hong Kong.

Xinhua Winshare beganthis week marketing its issue of 369.4 million shares at a price ranging from HK$4.50 to HK$5.80 apiece. Order books are scheduled to close on May 22, with a listing set for May 30 under the Hong Kong stock symbol 0811.

The state-owned company, whose offering is being sponsored by Bank of China International, operates over 230 stores in inland Chinese cities including Chengdu, Chongqing and Xian. Xinhua Winshare's IPO price range values the firm at 11.4 to 14.8 times 2006 earnings. A research report by the deal's underwriters says overseas peers trade at about 23 times 2006 earnings. An over allotment option would expand the deal by 15%.

Xinhua Winshare has been authorized to exclusively distribute non-government funded textbooks for primary schools and middle schools. It is also a general supplier of primary school and junior middle school textbooks. At present, it has set up service centers in Yunnan, Guizhou and Chongqing and it plans to use the funds raised through the IPO for further expansion in China.

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