Hengan International Group, a mainland maker of personal hygiene products, hired Morgan Stanley to help sell HK$1.85 billion worth of new shares through a top-up share placement to fund expansion, market sources said.
The share sale is the largest follow-up share offering since the Hong Kong market went above 30,000 points for the first time last week. The Hang Seng Index reached 30,025.07 after climbing from 19,386.72 on August 17.
Hengan, whose shares have gained 67 per cent this year, was selling 60 million new shares at an offer price of HK$30.15 to HK$30.78 per share, representing an up to 5.8 per cent discount to its closing price of HK$32, according to a sale document obtained by fund managers.
The company and its controlling shareholders have promised not to sell shares in 180 days after completion of the share sale.
'The market will find strong support at the level of 28,000 in the medium term given the strong market liquidity and ample fund inflows from the mainland' through the qualified domestic institutional investor scheme, said a fund manager who was invited to join the share sale.
'I would not be surprised if there are more placements launching in the coming two days,' he said.
Hengan's first-half net profit rose 42 per cent from a year earlier to HK$469.55 million, as higher living standards on the mainland continued to drive up demand for tissue paper and sanitary napkins.
