Galaxy Securities Said to Raise $1.1 Billion in Share Sale

China Galaxy Securities Co., a brokerage controlled by the country’s sovereign wealth fund, raised about $1.1 billion in an initial public offering in Hong Kong, two people with knowledge of the matter said.

The company, based in Beijing, sold 1.57 billion shares at HK$5.30 apiece, the people said, asking not to be identified because the information is private. The final price values Galaxy Securities at about 1.3 times estimated end-2013 book value, one of the people said.

The value of IPOs in Hong Kong is recovering from a four-year low in the first quarter, when companies raised $1.1 billion, data compiled by Bloomberg show. Sinopec Engineering Group Co. is scheduled to price an IPO tomorrow that may raise as much as $1.9 billion.

Shares of Galaxy Securities were originally offered at HK$4.99 to HK$6.77 apiece, according to the IPO prospectus. The company yesterday narrowed the offering range to HK$5.28 to HK$5.43 a share, people with knowledge of the matter said. The company plans to start trading on May 22.

Citic Securities Co. (6030), China’s biggest publicly listed brokerage, trades at 1.68 times estimated 2013 book value in Hong Kong, according to data compiled by Bloomberg. Haitong Securities Co., which raised HK$14.4 billion ($1.9 billion) in a share sale in April last year, carries a multiple of 1.32, the data show.

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People walk into a China Galaxy Securities Co. office building in Beijing. Close

People walk into a China Galaxy Securities Co. office building in Beijing.

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Source: AFP/AFP/Getty Images

People walk into a China Galaxy Securities Co. office building in Beijing.

An external spokeswoman for Galaxy Securities declined to comment on the final price.

Sinopec Engineering, a unit of China’s biggest refiner, narrowed the price range for its IPO to HK$10.50 to HK$11.00 a share, two people with knowledge of the matter said today. The company had sought as much as $2.2 billion in the sale, according to a prospectus for the offering.

Galaxy Securities hired 21 investment banks for its share sale, a record for a Hong Kong IPO, according to data compiled by Bloomberg. Founded in January 2007, Galaxy Securities is controlled by Central Huijin Investment Ltd., a unit of China Investment Corp., according to the brokerage’s website.

Cornerstone investors for Galaxy Securities include insurer AIA Group Ltd. (1299) with an investment of $50 million and Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund, with $100 million, the brokerage’s prospectus shows. Cornerstone investors typically agree to hold their stock for six months in return for guaranteed allocation in an IPO.

To contact the reporter on this story: Fox Hu in Hong Kong at fhu7@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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