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Luxury car dealer takes to the road

The Standard - Luxury car dealer China Harmony Auto Holding starts a roadshow today for a HK$2.44 billion initial public offering.

The firm will sell 275 million shares at HK$6.08 to HK$8.88 each, with the retail book opening on Friday.

With 25 outlets, Henan-based Harmony is a primary agent for 10 European and Japanese luxury auto brands including BMW, Rolls-Royce, Lexus, Ferrari and Maserati. It boasts of being the largest distributor of luxury cars in central China, a region where it held a 9.7 percent market share last year.

The firm sold cars worth 5.24 billion yuan (HK$6.6 billion) in 2012, up 90.5 percent on 2011 and registering the fastest growth among rivals including Zhongsheng Group (0881) and China Yongda Automobiles Services (3669).

Harmony's gross profit margin on new vehicle sales fell 2.2 percent last year to 9.2 percent from 2011.

But the showing was "exceptional" compared with an industry average of 5-6 percent, a Shanghai analyst said.

But the same analyst warned that sales of luxury and ultra-luxury cars in China is currently slowing. Also, there is widespread speculation that the central government may impose a 20 percent sales tax on luxury cars from next month.

In other action, Hopewell Hong Kong Properties starts bookbuilding on Thursday for its HK$6.4 billion IPO. Shareholders of parent Hopewell Holdings (0054) will be able to subscribe to reserved shares via an online system, which will be a first for the SAR.

And casino operator Macau Legend Development will start bookbuilding for a HK$4.68 billion IPO on June 7. The target is 25 percent less than expected.

Ina Chan Un-chan - third wife of tycoon Stanley Ho Hung-sun - and SJM Holdings (0880) hold 17.9 percent and 4 percent respectively in the firm.

Wheelon Co., CNAIC All rights reserved. 
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