By Dai Yan (chinadaily.com.cn)
Updated: 2007-09-19 11:51

China Construction Bank (CCB), one of the nation's four big State-owned commercial lenders, is expected to raise a record 58.05 billion yuan (US$7.71 billion) after selling nine billion A shares in its initial public offering (IPO), at 6.45 yuan per share, according to a CCB announcement issued today.

The new record exceeded the 1.9 trillion yuan received by the Bank of Beijing, the country's largest city commercial bank, earlier this month.

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The price is at the top of its range set earlier between 6.15 and 6.45 yuan per share. It implied a price-to-earnings ratio of 32.91 times the bank's diluted earnings in 2006.

The IPO represents less than 3.85 percent of the expanded share capital of 233.7 billion shares, and the proceeds would be used to boost its capital adequacy ratio. The market value is expected to reach 1.6 trllion yuan.

CCB will issue 2.7 billion shares to off-line investors and 63 billion to on-line investors.

The bank's earnings per share in the first half of 2007 was 0.15 yuan, compared with 0.12 yuan for the ICBC and Bank of China.

Its non-performing loans ratio stood at 2.95 percent at the end of June, lower than the 3.29 percent half a year ago.

The bank has attracted a record 2.26 trillion yuan in subscriptions for the IPO. Analysts said the record came as investors rushed to IPOs for almost certain high price rises on debut and chased blue chips for stable earnings as risks started to build on the heated domestic equity markets.

The shares are likely to start trading at 7.8 to 9.6 yuan on the Shanghai Stock Exchange on September 25, experts said.

The government has encouraged the return of China's large red-chip companies, mainland firms incorporated outside the mainland and listed in Hong Kong, to mainland bourses to disperse excessive liquidity and help cool down the stock markets.