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Tianjin Development  
Product Ref: 98/18C Company: Tianjing Development

Product Type: Case Industry: Conglomerates
Public Policy & Strategy

Related Product(s): Teaching Note
Authors: Ko Wang   Su Han Chan   Probir Banerjee
In early December 1997, Merrill Lynch Far East Asia Ltd. and Oriental Patron Asia Ltd. were evaluating the details of a proposed offering of 181.54 million common shares by Tianjin Development Holdings Limited, a Mainland Chinese company. The shares would be offered to the Hong Kong public as well as placed to institutional and strategic investors, with trading expected to commence on the Hong Kong Stock Exchange on December 10. The company, upon listing, would join the group of China-affiliated companies (or Red Chips) currently listed on the Exchange. Although Red Chip companies had had a series of past successes in raising equity capital through IPO, the bullish sentiments for Red Chips started waning soon after the handover of Hong Kong to Chinese rule. The case looks at the circumstances surrounding the 'Rise and Fall of the Red Chips' and the pricing of IPOs under bearish stock market sentiments.
Functional Area : Finance & Investments

Issues: IPO Valuation, Red Chips, H Shares
Length: Text: 8 pages
Exhibits: 11 pages
Country: Hong Kong SAR

Pub. Year: 1999 Level of Difficulty: 2
This product type is available in the following language(s):      English
Related Information: N/A
This case is UGC funded.
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