HONG KONG: Mainland property developer Fantasia is set to raise up to $414 million in an initial public offering of shares in Hong Kong.

The developer plans to sell 1.458 billion shares, including 243 million existing shares, at an indicated price range of HK$1.75-2.20 per share, the term sheet said.

Fantasia's offering price represents a multiple of about 5.25 times to 6.6 times 2010 earnings forecasted by joint sponsors. By comparison, its peer SOHO China trades at 6.6 times 2010 forecast earnings.

Fantasia plans to start its Hong Kong public offering on November 12 and will set its final pricing on November 18, with trading scheduled to start on November 25.

The company has pledged six cornerstone investors, including China Poly Group, for a combined $63 million worth of shares.

The firm plans to use more than half of the proceeds to acquire additional land reserves, including the property rights that the firm intends to acquire for Shenzhen Meinian Plaza for about 300 million yuan.

Investment banks Deutsche Bank, BOC International, Goldman Sachs, ICBC International and CITIC Securities are handling the deal.

Separately, China Longyuan Power Group, Asia's largest wind power generator, has nearly doubled its initial public offering target, hoping to raise about $1.3 billion in a Hong Kong IPO, sources familiar with the deal said.

The company plans to sell 2.1 billion shares, or 30 percent of its enlarged share capital, one of the sources said.

Longyuan initially planned to raise around $700 million in a Hong Kong IPO, but the company has boosted its expectations due to strong demand.

Investment banks Morgan Stanley and UBS are handling the deal.

Longyuan is the largest wind power generator in China and the fifth-largest in the world. It had a 24 percent share of China's wind power market in terms of total installed capacity as of the end of 2008, according a UBS report, citing wind power research company BTM Consult.

UBS estimates Longyuan's 2009 earnings will jump 144 percent to 895 million yuan ($131.1 million), excluding non-recurring items such as an impairment loss in 2008, and a further 100 percent jump to 1.8 billion yuan in 2010.

The growth is mainly because of capacity expansion in the wind power segment and lower coal costs. China's renewable energy sector has grown remarkably in recent years, as Beijing pushes for sustainable development, but overcapacity is already threatening polysilicon and wind power equipment industries as a result of blind expansion.

China Daily/ Agencies

(HK Edition 11/10/2009 page3)