China’s Bohai Bank prices its initial public offering to raise £1.35 billion

Written by: Wajeeh Khan
July 10, 2020
  • China’s Bohai Bank prices its initial public offering to raise £1.35 billion.
  • The Tianjin-based lender says its offer includes 2.88 billion shares.
  • The commercial bank posted £930 million in annual net profit for 2019.

In an announcement late on Thursday, China’s Bohai Bank said it raised £1.35 billion via its initial public offering (IPO) as it priced its offer at 49 pence a share. Originally, the Tianjin-based lender had indicated last month that its offer will include 2.88 billion shares and that it will price its shares between 49 pence and 51 pence.

Bohai’s listing marks the biggest in Hong Kong in 2020 so far. The Standard Chartered-backed bank is now scheduled to debut on the Hong Kong stock exchange on 16th July. Learn more about the basics of an IPO.

Bohai Bank posted £930 million in annual net profit

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Hong Kong has seen several listings from China-based businesses in recent weeks as tensions started to flare again between the largest Asian economy and the United States. The global IPO market was previously put on halt due to the Coronavirus pandemic that has so far infected more than 12 million people worldwide and caused over half a million deaths.

Founded in 2006, Bohai Bank reported its annual net profit at £930 million in 2019 that represented a 15.7% increase from £800 million in the previous year. As per its prospectus, its profit was attributed to the net interest income that climbed by a massive 50% to £2.59 billion.

Following the initial public offering, as per the sources, Standard Chartered’s stake in Bohai Bank will be reduced from 20% to 16.67%. Standard Chartered is currently the 2nd largest shareholder of China’s Bohai Bank. Its largest shareholder, state-owned Teda Investment Holdings, on the other hand, will see its stake slashed from 25% to 20.85% after the IPO.

Bohai Bank named CCB International, ABC International, Citic Securities, and Haitong International Securities as joint sponsors for its offer. The lender was not immediately available to comment any further.

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Cornerstone investors made up about 30% of the total transaction

Cornerstone investors that subscribed to the offer ahead of institutional bookbuild made up roughly 30% of the total transaction. Yichang Health Pharmaceutical was announced as the largest of such investors that purchased Bohai’s shares worth £158.61 million. Four funds also bought an additional £39.65 million worth of the bank’s shares each.  

Before Bohai, the largest IPO in Hong Kong in 2020 so far was of Smoore International that raised £728 million last week. Smoore is a prominent manufacturer of e-cigarette and vaping devices.