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Hebei Construction Group to raise up to US$297mn in Hong Kong IPO

A share offering this week of up to HK$2.32bn (US$297m) by China’s Hebei Construction will be the first listing in Hong Kong of a company linked to Beijing’s ambitious Xiongan special economic zone project.

Xiongan New Area, established in April and just a couple of hours south of Beijing, is part of China’s efforts to transfer some functions out of the increasingly crowded capital and find new growth drivers led by innovation and technology.

Some analysts have put the possible investment in developing infrastructure in the area, which is currently mostly farmland, at up to US$583bn over the next 20 years, although the government has yet to unveil its blueprint for the zone.

China's second-largest non-state-owned construction contractor is offering 433.3mn shares in an indicative range of HK$4.46 to HK$5.36 apiece.


Zhongji Investment has agreed to invest 300mn yuan (US$45.3mn) as a cornerstone investor.

The offer will open for subscriptions today and close on Friday, with trading on Hong Kong's main board expected to start on 15 December.

China International Capital Corporation Hong Kong Securities and CMB International Capital are the joint sponsors, global coordinators, bookrunners and lead managers.

Hebei Construction intends to use most of the proceeds to fund construction projects and repay loans.

The company, which is based in Hebei, North China, is well-positioned to capture opportunities in the Xiongan New Area, it said in a prospectus filed with the Hong Kong stock exchange. 

“For sure we can have a finger in the pie,” said Shang Jinfeng, President and Executive Director of Hebei Construction, at a media briefing on the listing in Hong Kong yesterday.

“We have geographical advantages, advantages in transporting equipment and ‘green infrastructure’ experience, which is in line with the state’s goal to build Xiongan into a green, liveable and modern urban area,” he said.

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