SHANGHAI Jan 9 The first two Chinese companies
set to list their shares on domestic exchanges after the end of
a regulatory freeze said they had attracted strong investor
interest, a good sign for dozens more that plan to follow this
Guangdong Xinbao Electrical Appliances Holdings Co Ltd
said in a stock exchange filing on Thursday that it
had raised 798 million yuan ($131.9 million) from individual and
The online part of the sale, which targeted mainly retail
investors, attracted interest amounting to about 95 times the
amount on offer, it said.
Zhejiang Wolwo Bio-Pharmaceutical Co Ltd, to be traded under
the ticker, said it raised 506 million yuan, with
the online portion of the sale 176 times oversubscribed.
China's securities regulator signalled in December it would
permit IPOs again after freezing new listings in November 2012.
Chinese stock indexes have slid steadily since then, however,
and many analysts say a flood of new issues will increase
pressure on stock prices.
Beijing appeared to address that concern on Wednesday as
state media reported that domestic insurers would be allowed to
buy shares on the small-cap ChiNext exchange in Shenzhen, where
many of the new IPOs will take place.
Regulators also recently encouraged state-owned firms to buy
back their own shares, which could offset the dilutive effect of
The two companies are the first of 29 that have already
announced plans for initial public offerings on the Shenzhen and
Shanghai exchange websites. More than 700 companies have queued
for regulatory approval to list.
Ernst & Young has estimated that new listings could raise as
much as 200 billion yuan in 2014, more than twice what was
raised in 2012 before the freeze.
The securities regulator said in November it expected around
50 companies to list this month alone.
Both of the new listings took place on the Shenzhen
The lead underwriters were Dongguang Securities Go. Ltd. for
Guangdong Xinbao and Daiwa SSEC Securities Co. Ltd. for Zhejiang
Wolwo, according to the prospectuses.
($1 = 6.0512 Chinese yuan)
(Reporting by Pete Sweeney and Samuel Shen; editing by Jane