Kaisa Group 1638

[winston]

Developer lures big names by Mandy Lo

Kaisa Group has attracted subscriptions from big names - including Henderson Land Development (0012) chairman Lee Shau-kee - after securing US$60 million (HK$468 million) from four cornerstone investors.
It is the eighth listing of a mainland developer this year.

Sources said Lee will subscribe to the institutional tranche of the HK$4.45 billion float, while Temasek Holdings and Carlyle Group will become strategic investors.

The Shenzhen-based developer has a land bank of 12 million square meters with land use rights obtained, more than double the 5.13 million sqm held by competitor Fantasia.

Four cornerstone investors agreed to subscribe to a combined US$60 million worth of shares in its initial public offering, with New World Development (0017) chairman Cheng Yu-tung and toy tycoon Francis Choi Chee-ming pouring in US$20 million each.

Chinese Estates (0127) chairman Joseph Lau Luen-hung and Alex Yeung, younger son of Emperor Group chairman Albert Yeung Sau-shing, each ordered US$10 million.

Emperor Securities, as the vice lead manager, helped introduce cornerstone investors to the firm.

Credit Suisse and BOCI are joint sponsors for the offer, which will kick off its roadshow tomorrow, listing one billion new shares at HK$3.45 to HK$4.45 apiece.


Source: The Standard HK

[winston]

Kaisa Group plans to raise $574 in HK IPO-term sheet

HONG KONG, Nov 23 (Reuters) - Real estate developer Kaisa Group Holdings Ltd plans to sell up to HK$4.45 billion ($574 million) worth of shares in an initial public offering in Hong Kong, raising capital for land acquisition and project development.

The company plans to sell one billion new shares at HK$3.45-HK$4.45 per share, according to a term sheet obtained by Reuters on Monday.

BOC International and Credit Suisse (CSGN.VX) are handling the deal.

Trading in the shares is expected to begin on Dec 9. (US$1=HK$7.75)

http://www.reuters.com/article/swissMkt ... 7520091123

[winston]

DJ Kaisa Group Seeking Up To US$650M In IPO - Source

HONG KONG (Dow Jones)--Kaisa Group Holdings Ltd. (1638.HK) is seeking to raise up to US$650 million in the eighth, and probably the last, Hong Kong initial public offering by a Chinese real estate developer this year, a person familiar with the situation said Saturday.

In the base deal, the Shenzhen-based developer is selling one billion new shares in a HK$3.45-HK$4.45 range to raise up to US$570 million, the person said, adding the company has an option to raise the deal's size by 15% to raise a total US$650 million.

Four cornerstone investors have pledged to subscribe to a total US$60 million in Kaisa shares, including Chow Tai Fook Enterprises Ltd.'s Cheng Yu-tung and Chinese Estates (Holdings) Ltd.'s (0127.HK) Joseph Lau.

Kaisa's price range translates to a foward price/earnings valuation of six to 7.8 times its forecast 2010 net profit of CNY2.4 billion (US$350 million), the person said. Recent listings as Evergrande Real Estate Group Ltd. (3333.HK) and Mingfa Group (International) Co. (0846.HK) both sold shares at a forward PE of around 5.5 times.

Founded in 1999, Kaisa has a landbank of 16.5 million square meters, three-quarters of which have land use rights allowing the company to develop the land, one person said. Unlike Fantasia which focuses on high-end residential projects, Kaisa builds large scale residential and commercial properties in cities along the Pearl River Delta like Guangzhou, Zhuhai and Shenzhen. It also has projects at Shanghai and the central city of Changsha.

Credit Suisse Group (CS) is the global coordinator for Kaisa, which is scheduled to start trading on Dec. 9, joined by bookrunner BOC International Holdings Ltd., the person added.

Source: Dow Jones Newswire

[winston]

From Phillips:-


Risk

Sales will be lower than our expectation.

The company will pay amounts of costs of idle land for possible government's regulation on idle land. And the local government will withdraw the parts of land which isn`t developed as schedule.

Financing cost may be affected by obvious changes of interest, and the company's sustaining operation may be affected by worsening financing surrounding.


Valuation

For smooth sale and increased booked properties, Kaisa's profit in 2009 and 2010 will rise obviously. We expect that net profit in the two years will be RMB 787 million and 1.81billion Yuan respectively, EPS will be 0.157 and 0.361, representing to HKD 0.178 and 0.41.

Based on the valuation of regional developers, we give Kaisa 12x forecasted P/E, 12m TP of HK$4.92, suggesting 10.6% up room from upper limit of its issue price. We recommend a “Buy” rating.

[winston]

Eighth developer hits road by Mandy Lo, The Standard HK

Shenzhen-based developer Kaisa Group kicks off its initial public offering today to raise up to HK$4.45 billion.

From January to November 18, Kaisa's sales hit 6.07 billion yuan (HK$6.89 billion), up 50 percent year- on-year, its prospectus shows. The company expects to book an income of 2.75 billion yuan next year after selling an office building in Guangzhou this month.

"Kaisa has a land bank of 12.5 million square meters, which is adequate for development over five years," said chairman Kwok Ying-shing.

The company's net profit is expected to rise by 7.57 percent to 538.8 million yuan this year. Interim net income slumped 41.8 percent to 368 million yuan although revenue soared 92 percent to 2.47 billion yuan on lower fair value gains from property revaluation.

"The net profit margin was adversely affected by the financial tsunami, but we expect it to rebound in the coming two years to around 20 percent as in 2007," said Kaisa president Ye Jiansheng.

The company plans to float one billion new shares at between HK$3.45 and HK$4.45 each. The minimum spending for one board lot of 1,000 shares is HK$3,450.

A Henderson Land Development (0012) spokesman confirmed that chairman Lee Shau-kee subscribed to Kaisa's IPO shares.

Kaisa, the eighth mainland developer to list in the SAR this year, is supported by four cornerstone investors, including tycoon Cheng Yu-tung's Chow Tai Fook nominee and Chinese Estates (0127) chairman Joseph Lau Luen-hung, whose total subscriptions near US$60 million.

http://www.thestandard.com.hk/news_deta ... 91126&fc=7

[winston]

Applied.

Kaisa Group closed subscriptions via margin financing yesterday, freezing HK$858 million - almost double the HK$445 million it seeks to raise, according to seven brokerages.

Source: The Standard HK

[winston]

Applied.

Kaisa Group, the eighth mainland developer to be listing on the local bourse this year, received a lukewarm response as its public offering was only two times oversubscribed locking in HK$1 billion, a source revealed.

[winston]

*DJ Kaisa Prices HK IPO At HK$3.45 Each, Low End Of Range-Source

[winston]

MARKET TALK: Kaisa Gp May Rise On Debut; Grey Mkt Price +6.7%

[winston]

Still holding on to my IPO shares.

DJ MARKET TALK: Kaisa +0.9%; Investor Fatigue On China Developers

1042 [Dow Jones] NEW LISTING: Kaisa Group (1638.HK) barely treads water, +0.9% at HK$3.49; tepid debut performance expected with retail tranche measly 1.9X oversubscribed, vs tomorrow's heavyweight debutante wind-power player Longyuan's (0916.HK) 235X, despite latter's size much bigger than Kaisa, suggesting HK investors getting fatigued with deluge of mainland developer IPOs.

Fundamentally, SinoPac Securities forecasts Kaisa's FY10 earnings at CNY2.0 billion, as number of new property projects ready for sale; pegs target price of HK$4.00 on 9.0X FY10 P/E, which tad higher than middle point of Kaisa's HK$3.45-HK$4.45 indicative IPO range.

Source: Dow Jones Newswire