Sinotruk priced its 2007 Hong Kong IPO at the top of range and raised HK$9bn

Sinotruk (Hong Kong) Ltd, the listed arm of China National Heavy Duty Truck Group and China's largest heavy-truck maker, came to market in November 2007 with 702 million new shares priced at HK$12.88 — the very top of the marketed range. The sale of a 32% stake valued the Jinan-based company at US$3.6 billion, or 18.8 times the following year's forecast profit.

Demand was overwhelming: Hong Kong retail investors sought more than 300 times their allocation and international institutions about 50 times theirs, while Bank of China's investment arm and Singapore's GIC took US$200 million of cornerstone stock. The proceeds were earmarked for new plants and technology as a construction boom pushed China's heavy-truck sales up 65% in the first ten months of 2007.

The decision to fund expansion with public equity rather than state bank credit turned a restructured state truck maker into a priced, internationally held company. Shares began trading on 28 November 2007; by May 2008 the stock had slipped below its IPO price amid macro worries, even as the company raced to expand post-earthquake sales.

HK$9bn (US$1.2bn) raised at the top of the range; the 32% stake valued the company at US$3.6bn

A 65% surge in heavy-truck sales made late 2007 the right window to sell equity.

Scarce listed heavy-truck exposure — 'not much choice for heavy-truck stocks' — drove extreme oversubscription.

Cornerstone demand from BoC Investments and GIC validated pricing at the top of the range.

Equity funding for new plants avoided piling state bank debt onto a recently restructured group.

Float a state champion into a demand spike: scarcity plus a hot market lets an SOE raise growth equity at the top of the range.

Sinotruk listed on 28 November 2007. The shares traded below the HK$12.88 IPO price in May 2008 as investors worried about Beijing's tightening, but the company used the listing to expand capacity and post-quake sales, cementing its position as China's heavy-truck leader.