Chinese truck and sport utility vehicle maker Great Wall Automobile priced its IPO at the top end of an indicated range yesterday, raising HK$1.516 billion (US$194 million) from an issue that was massively oversubscribed, sources close to the deal said.

The retail portion of Great Wall's IPO was more than 680 times subscribed - a level not seen in Hong Kong since tycoon Li Ka-shing's Internet firm Tom.com listed at the tail end of the dot-com boom in early 2000.

The huge demand for Great Wall Automobile Holding bodes well for listings of other Chinese firms in Hong Kong.

China Life Insurance opened its IPO to retail investors on Monday and could raise up to US$3 billion in what would be the biggest listing in the world this year.

"I think this mania will last for at least one to three months," said Peter Lai, a director at OCBC Securities. "There are lots of funds coming into Hong Kong, because of the concept of good development of the mainland."

As Great Wall's IPO was more than 100 times subscribed by retail investors, their portion of the offering will be raised to 50 per cent from 10 per cent - a regular move in Hong Kong IPOs.

The deal was priced at HK$13.30 per share, near the top of an indicative range of HK$10.05 to HK$13.40 per share. The firm is selling 114 million shares, or 25 per cent of its share capital, with trading set to begin on December 15.

BNP Paribas Peregrine underwrote the deal.

With the broader market in Hong Kong losing steam, investors are clamouring for new issues. Several retail applicants for Great Wall shares said they hoped to sell their stock on the first day of trade to lock in profits.

"We knew all along this would be hot, but it's a little bit surprising that the subscription is so high," said Samantha Ho, fund manager at Manulife Funds Direct, who said she expected heavy interest in the China Life IPO.

Another listing candidate, gold miner Fujian Zijin Mining Industry, may push back its planned Hong Kong debut from December 19 to December 22 because many small investors have funds locked up with their applications for shares in Great Wall and China Life, sources familiar with the IPO said.

Nearly HK$105 billion (US$13.5 billion) in Hong Kong investor funds have been effectively frozen with their applications for Great Wall shares. Refund checks will be issued to investors by Friday.

China-based Zijin Mining aims to raise up to HK$1.15 billion (US$147 million).

Louis Wong, research director at Phillip Securities, said interest in new listings should persist for the next few months, depending on the after-market performance of IPO shares.

"Liquidity is still awash. Interest rates remain low. There is a lack of investment opportunities," Wong said.

The pricing of Great Wall's IPO was set at about 12.5 times its forecast 2003 profit of 512 million yuan (US$61.8 million).

That is a cheaper valuation than shares in other Hong Kong-listed mainland car and truck makers such as Qingling Motors, Denway Motors, Brilliance China Automotive Holdings, and recently listed minicar and helicopter maker AviChina Industry & Technology.

All four stocks rallied after Great Wall's huge subscription.

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