IPO newcomer Asia Cement (China) Holdings Corporation kicked off its retail offer yesterday.

The Sichuan-based cement supplier intends to offer 375 million shares in a bid to raise up to HK$2.42 billion.

But the open subscription drew a tepid response in terms of margin application, for which seven local securities houses granted less than HK$35 million in margin lending.

A spokesperson of a local securities house said investors are unenthusiastic in subscribing the shares because economic uncertainties loom.

Sources said that the international placing received a satisfactory response that the trache has been oversubscribed.

The indicative range of the share offer is between HK$4.85 and HK$6.45 each.

According to the listing document, the company's net profits will be at least 167 million yuan in the first half.

The company's net profits increased fivefold to 307 million yuan in 2007.

The company's executive director, Chang Chen-kuen, told reporters yesterday that the overall production capacity would reach 10 million tons by the end of the year, up from 5.54 million tons.

Still, he added that the company will strive to seek acquisition opportunities for its expansion plans.

Despite the lukewarm response, Tung Tai Securities Associated Director Tang Sing-hing hailed the prospects of the company. "The offering price is relatively cheap with a considerable discount to its peers such as Anhui Conch Cement."

Tang believes the response of the retail offer will be more ardent than the previous newcomers', since the market sentiment has returned to normal.

The projected earning of the company is estimated at about 15 to 20 times its offering price, relatively lower than its industrial counterparts.

The public offer will close at noon on Thursday, and the shares will begin to trade on the mainboard on May 20.

(HK Edition 05/06/2008 page2)