BIZCHINA / Company Events
Country Garden shares surge 35%
By Hui Ching-hoo (China Daily)
Updated: 2007-04-21 07:53
HONG KONG: Shares of Country Garden, a South China property developer,
surged more than 35 percent over its offering price on Friday, reflecting
strong investor confidence in the mainland's real estate market despite
recent government cool-down measures.
Country Garden shares closed at HK$7.27 on Friday, a HK$1.89 increase
over the initial offering price. Turnover was HK$7.23 billion.
The debut came one day after a slump on the Shanghai Composite Index,
caused by bearish market sentiment, but regained momentum in the late
trading session, analysts said.
"The opening bid was lower than expected due to the bleak atmosphere
caused by the imminent launch of austerity measures. But the closing
price is within our range of expectation," said Ricky Cheung, executive
vice-president of Enlighten Securities and Futures Ltd.
Country Garden, which sells most of its houses to Hong Kong buyers,
entered the market spotlight after its initial public offering raised
more than HK$330 billion. It was the second-largest IPO in the history of
the Hong Kong exchange, after the Industrial and Commercial Bank of
China's HK$410 billion launch last year.
The trading frenzy was sparked by remarks by property tycoon Lee
Shau-kee, chairman of Henderson Land Development, Hong Kong's
third-largest developer, who chose Country Garden as one of the five
hottest picks among mainland property stocks.
Lee was brought in as a cornerstone investor, alongside Malaysian tycoon
Robert Kuok, CITIC Pacific's Larry Yung Chi-kin, Singapore's Temasek
Holdings and Chow Tai Fook Enterprises. Together, they agreed to buy
HK$3.5 billion worth of shares.
Yeung Kwok-keung, Country Garden's chairman, said the company would
quicken expansion outside Guangdong Province.
"We will apply our business model into other mainland cities and strive
to diversify our products," he said at the listing ceremony on Friday.
"We will continue to pursue low land cost strategy, and we've identified
five cities in Hunan, Jiangsu, Inner Mongolia and Liaoning as our next
targets."
Country Garden has reported 300 percent compound annual net profit growth
rate over the last three years.
(For more biz stories, please visit Industry Updates)
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