Postal Savings Bank of China (PSBC) is set to raise $7.4 billion in its Hong Kong initial public offering, which is expected to be the world's biggest flotation this year, reports said on Wednesday.
The listing is also poised to be the biggest since Chinese internet giant Alibaba floated in New York in 2014, raising $25 billion.
But the $7.4 billion valuation misses the company's previously hoped-for $8.1 billion mark as analysts say demand for the stock is tepid.
PSBC will sell 12.1 billion shares at HK$4.76 ($0.61) each when it floats on the Hong Kong exchange on September 28, according to Bloomberg, citing people familiar with the matter.
That comes in at the lower end of the bank's original price range, which valued the shares between HK$4.68 and HK$5.18.
Analysts attribute the lukewarm interest to the recent flat performance of large Chinese financial firms on Hong Kong's bourse.
"In the last year or so, most of these big financial firms on their debut at best went up five percent, and a lot of them are still trading underwater," financial analyst Jackson Wong told AFP.
"A lot of investors don't see an explosive upside from this," said Wong, associate director of Hong Kong-based Simsen Financial group, referring to PSBC's listing.
The majority of the bank's shares will go to cornerstone investors.
PSBC is China's fifth-largest lender with 40,000 branches -- more than any other bank in the country -- and around 70 percent in rural areas.
Founded in 2007, it provides basic banking services to farmers and agricultural business owners, and it is the only financial institution present in some of the country's most remote regions.
According to the latest figures, PSBC's total assets reached 7.7 trillion yuan ($1.15 trillion) by March. Its net profit rose 11 percent year-on-year in the first quarter to 12.48 billion yuan.
Previously completely state-owned, PSBC raised 45.1 billion yuan by selling a 16.92 percent stake to 10 strategic investors in December, valuing the firm at $40.6 billion.
Among the buyers were e-commerce giant Alibaba's affiliate Ant Financial, and Tencent, another internet behemoth.
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All rights reserved to Arab Today Media Group 2021 ©
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