Hillhouse among cornerstone investors in China Conch Venture's HK IPO

Conch Venture, an energy preservation and environmental protection solutions provider, plans to sell 265 million at HK$11.36-13.56 apiece, according to a prospectus. Gaoling Fund, a vehicle managed by Hillhouse, will subscribe to 22 million shares. Assuming the IPO prices at the mid-point of the range, Hillhouse will hold a $1.25% stake in the company.

China National Building Material, Taiwan-based TCC Investment, Asia Cement, and Sagemore Assets are also participating as cornerstone investors. They are subject to a lock-up period of six months.

According to a Roland Berger report cited by the company, Conch Venture was the second largest provider of residual heat power generation solutions for cement producers in China, with a market share of 21% in terms of sales volume last year.

Conch Venture generates about 80% of its earnings from its equity interests in Conch Holdings, which operates cement production business through its subsidiaries Conch Cement and Conch Profiles. Conch Venture recorded  profits of RMB1.13 billion ($186.1 million), RMB2.06 billion and RMB1.18 billion in 2010, 2011 and 2012, respectively.

Conch Cement, headquartered in Auhui province, is the largest cement manufacturer in China. The state-owned enterprise was listed in H-share in 1997 and traded in Shanghai stock exchange in 2002.

Hillhouse manages capital committed from institutional investors such as university endowments, foundations, family offices, pensions and sovereign funds. It focuses on consumer, internet, media and healthcare sectors across Asia.

Deutsche Securities Asia is the sole IPO sponsor, with Deutsche Bank and Goldman Sachs serving as joint global coordinators.

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• Topics
• Greater China
• Industrials
• China
• manufacturing
• Hong Kong (China)
• IPO