Bank of Jinzhou 0416

[winston]

not vested

Bank Of Jinzhou Debut Trading Lackluster

By Shuli Ren

The debut performance of Bank of Jinzhou (416.Hong Kong), which raised nearly $800 million this month, is uninspiring.

Bank of Jinzhou’s shares are down 0.9% as we head into the noon break, despite having priced at the bottom of its indicative range.

This bank attracted only one cornerstone investor to prop up its shares – unusual for mainland Chinese stocks.

It has an uncomfortable relationship with Hanergy (566.Hong Kong), at-one-point a $40 billion market cap thin-film solar firm whose trading is halted (indefinitely?) in Hong Kong.

The Wall Street Journal‘s colleagues Kane Wu and Wayne Ma reported:

Since the first delay to Bank of Jinzhou’s IPO in the summer, its advisers have had to work hard to ensure it provided more transparency over its relationship with clients such as Hanergy, according to one banker familiar with the deal.

“[For these banks] to recapitalize and raise new capital, there is a great challenge for an investor to understand the individual bank’s loan book and credit transparency,” said Marshal Nicholson, head of equity capital markets Asia ex-Japan with Nomura.

The relationship between Bank of Jinzhou, Hanergy and one of the solar-panel maker’s few known customers, Baota Petrochemical Group Co., has come to light in dribs and drabs.

Last week, Hanergy said it canceled contracts to supply equipment to two customers, one of which is Baota, after they missed a deadline to pay for at least 80% of their purchases.

Baota, through a subsidiary, is a major shareholder in the Bank of Jinzhou. The bank, in turn, is one of Hanergy’s lenders.

Source: Barron's Asia