By Yvonne Lee
HONG KONG--China International Capital Corp., the investment
bank partly owned by KKR & Co that is preparing for a Hong Kong
initial public offering, said first-quarter net earnings doubled
during the recent China stock market surge, according to a
primarily listing prospectus.
Despite the strong results, the country's top investment bank
warned that its underwriting and sponsoring fees from domestic
listings could be hurt in the future due to recent regulatory
measures from the Chinese government, including decision to suspend
new stock sale.
The Beijing-based investment bank, which made its name advising
state-owned firms that have gone public in Hong Kong over the past
decade, said its net profit for the three months ended March jumped
to 356.8 million yuan (US$57 million) from 178.4 million yuan a
year earlier, aided by the increased trading of stocks and funds by
its brokerage clients.
The strong results came after Chinese markets boomed and then
fell sharply. The Chinese government then took measures to
stabilize the markets. The Shanghai Composite Index is up 1.3% on
Thursday.
The Beijing-based CICC on Tuesday applied to Hong Kong's stock
exchange for a US$1 billion initial public offering. It could list
as early as September, people familiar with the deal said.
Proceeds from the offering will be used to expand its trading
platform and fund the development of its investment banking
business, the document said, adding that CICC and ABC International
Holdings Ltd., the investment banking unit of Agricultural Bank of
China Ltd. (1288.HK), are the sponsors of the deal.
Central Huijin Investment Ltd., the domestic investment arm of
China's sovereign-wealth fund, is the largest shareholder in CICC
with a 43.17% stake. Singapore's sovereign-wealth fund GIC Private
Ltd. holds 16.35%, while TPG Capital owns 10.3% and KKR holds 10%,
according to the document.
Write to Yvonne Lee at yvonne.lee@wsj.com
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