HONG KONG -- China-based auto parts maker Minth Group Ltd. said on Monday that public subscription for its $66 million initial public offering will start on Tuesday and the money raised will be used mainly to expand capacity.
Minth, which makes automobile body and decorative parts for the mainland joint ventures of global auto giants including General Motors and Honda Motor, plans to sell 200 million new shares, or 25 percent of its enlarged share capital, at between HK$1.98 and HK$2.56 each, the company told reporters.
The issue also has a greenshoe option of 30 million shares.
The IPO price represents about 8.6-11.1 times projected 2005 earnings, the company said in its prospectus.
The company forecast its earnings would rise to 194 million yuan ($24 million) this year, up 58 percent from 123 million yuan in 2004, its listing document said.
The pricing is above rival Norstar Founders Group Ltd.'s P/E of 6.85 times. Norstar, also based in the mainland, mainly makes auto parts for the overseas market.
Minth, founded by Taiwanese businessman Chin Rong-Hwa in China's Ningbo city in 1997, said about 90 percent of the new shares would be placed with institutional investors and the remaining 10 percent will be sold to the public.
Cazenove is the sponsor of the deal.
Trading in shares of Minth will start on Dec. 1.
Net proceeds of up to about HK$476 million will mainly be used to upgrade existing plants, purchase new facilities, fund research and development and build up an overseas sales network, the company said.