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SHANGHAI Jan 14 A small Chinese travel company
plans to go public by selling shares at half the valuation of
those of its peers despite strong demand, after the securities
regulator stepped up policing of stock pricing.
The low pricing comes as bankers worry that the regulator's
move may lead to companies scaling back fundraising plans as
initial public offerings resume after a year-long hiatus.
The China Securities Regulatory Commission (CSRC) on Sunday
said any company pricing its shares at a premium to those of its
peers must delay sales by three weeks to publish risk warnings.
Seven companies have postponed IPOs since the market reopened
two weeks ago.
Beijing Utour International Travel Service Co Ltd is selling
up to 17 million shares at 23.15 yuan ($3.83) each, the company
said in a document posted on the Shenzhen Stock Exchange website
on late on Monday.
The price is equivalent to 22.05 times its 2012 net profit
compared with an average price-to-earnings ratio of 42.52 for
its industry peers, the company said.
Beijing Utour disregarded over 96 percent of institutional
investor bids when setting the price, in line with new rules
specifying that all bids above the IPO price must be discounted.
The high elimination rate indicates that the IPO price was
set significantly lower than institutional investors'
expectations and reinforces analyst concern that regulator
actions will elbow out market forces in the IPO valuation
Beijing Utour did not provide a reason for the low pricing.
More than 50 companies have announced plans to list on the
Shanghai and Shenzhen bourses after the CSRC last month said it
would permit the resumption of IPOs which it suspended in
Huatai United Securities is lead underwriter for the IPO
which will see Beijing Utour trade under the ticker.
($1 = 6.0434 Chinese yuan)
(Reporting by Shanghai Newsroom; Editing by Kazunori Takada and