High Tech IPOs With Good Stories Are Coming Back To Hong Kong's GEM

Mary Swire, Tax-news.com, Hong Kong

05 July 2000

The recent recovery in the Hang Seng by almost 20% since the end of May and China Unicom's successful launch has encouraged a number of technology companies to dust off the listing plans they shelved back in the spring when the dotcom crash began, although perhaps surprisingly the GEM itself has not recovered any of the ground it lost in the spring.

The most significant of the upcoming bunch of GEM listings will be Henderson Cyber, due to begin trading on 14th July. The Henderson group spin-off aims to raise more than HK$1bn from placing 15% of its shares. Next biggest will be Across Asia Multimedia which will raise around HK$600m before listing on 13th July.

Among a bunch of infrastructure and equipment companies are Intcera High Tech Group, listing this week, and DigiTel Group, aiming for 12th July.

Still, many of the firms that pulled back from listing have not yet plucked up enough courage to risk the still-fragile market. 23 approved listings are pending, while there are 21 applications in the GEM's pre-listing pipeline.

Local investment bankers say that a number of companies which could have floated successfully before the downturn on the basis of an Internet strategy would not now be able to get their listings away. What is needed now is strong financial backing from a parent, or a proven and profitable infrastructure or equipment business, as was the case with Excel Technology International (Hong Kong) whose IPO last week was 43 times oversubscribed. Brokers say that what demand there is comes mostly from retail investors

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