If you missed the branded junk in Victoria harbour, you probably didn't miss the gigantic billboard in the heart of Hong Kong's financial district. The upcoming initial public offering of China Minsheng Banking, the country's eighth largest lender by assets, has been among the most garishly promoted. No surprise, then, that demand from retail investors ensured that it has banked HK$30bn (US$3.9bn) after selling 15 per cent at HK$9.08 a share – the largest haul by any local debutant this year.
This looks like a good long-term story. China's first ever privately-owned bank, and the first non-state lender to list in Hong Kong, has grown net interest income and earnings by an average of 40 per cent every year for the past seven years. Minsheng's capital levels are thin – hence the raising – but assets (non-performing loans are sub 1 per cent) and liquidity (loan-to-deposit ratio of about 80 per cent) seem sound.
Despite those credentials, however, long-term investors do not dominate the order-book. The strength of retail demand – about US$31bn of orders, for an initial US$200m allotment – drove the portion allocated to non-institutions to a fifth, squeezing out some would-be cornerstone holders. Beijing's Hopu Investment Management, for example, styling itself as the kind of stable investor every public company should crave, was thought to have put a ceiling at HK$8.85.