Mainland digital music provider A8 Digital Music Holdings, which plans to raise HK$216 million through its Hong Kong IPO, opens its offering today. Meanwhile, four other companies, which have kicked off IPO marketing roadshows, will open their retail offer in the coming two weeks.

Despite the volatile market condition and poor response of recent IPOs, at least seven companies are looking to list in Hong Kong by the end of June.

A8 Digital Music is offering 91 million shares, including 11 million sale shares, at HK$1.66 to HK$2.38. The price represents a multiple of 12 to 17 times of its 2007 earnings.

"The recent telecom restructuring on the mainland will have positive impact on the company as players will compete in the areas of providing digital music," said chief executive officer and founder Alvin Liu.

"The higher quality of 3G is also expected to increase subscriptions to our services," said Liu, who was one of the founders of Hong Kong-listed Tencent Holdings.

A major part of the company's revenue comes from selling ringtones of songs of independent artists and famous singers to mobile phone and Internet users.

A total of 86 percent and 14 percent of the company's revenue come from its collaboration with China Mobile and China Unicom respectively. The company's 2007 profits were 55 million yuan.

About 50 percent of the net proceeds will be used to fund potential acquisitions including music-related content providers or mobile application-related companies. A total of 35 percent will be used to further develop its mobile built-in music box platform and introduction of 3G technology.

SBI E2-Capital is the sole sponsor of the IPO. The company's shares will start trading on the Hong Kong Stock Exchange on June 12.

Meanwhile, mainland's Shandong Chenming Paper and Chongqing Machinery have kicked off roadshows on Monday to raise as much as HK$4.2 million and HK$1.71 million respectively, according to sources quoted by Reuters.

The paper manufacturer plans to sell 355.7 million shares or 17.25 percent of its enlarged share capital at a price ranging from HK$9 to HK$11.80 each. The price range represents a multiple of 9.6 to 12.6 times of 2008 forward earnings made by its sponsors.

Chenming Paper will be the first company with all three types of shares, including yuan-dominated A shares, foreign currency B shares and Hong Kong-listed H shares.

It plans to open its offering to Hong Kong retail investors on June 4 and is scheduled to begin trading on June 18.

Chongqing Machinery is offering 1 billion H-shares or 27.3 percent of its enlarged share capital at HK$1.30 to HK$1.70 each. It plans to open retail subscription on Friday and the shares are scheduled to start trading on June 13.

Macquarie and Guotai Jun'an are sponsoring Chenming's deal while Credit Suisse is sponsoring Chonqing Machinery's deal.

Meanwhile, Little Sheep and Wah Kwong Maritime Transport Holdings, which will raise a total of about HK$2 billion, will open their retail offer on Thursday.

(HK Edition 05/28/2008 page3)