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China Unicom top Asia IPO
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June 16, 2000: 4:14 p.m. ET
China telecom provider share sale is biggest out of Asia, ninth globally
By Staff Writer Luisa Beltran
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NEW YORK (CNNfn) - China Unicom raised nearly $5 billion in its initial public offering Friday, ranking the telecommunications provider among the top IPOs of all time and the largest ever to emerge from Asia.
The Beijing-based company, which ranks as China's No. 2 telecommunications provider, raised nearly $4.92 billion after pricing 234 million American depository receipts (ADRs) and 123 million common shares in Hong Kong. The ADRs, which each represent 10 ordinary shares, were priced at $19.99 each in a sale led by underwriter Morgan Stanley Dean Witter.
 The offering ranks China Unicom as the ninth-largest IPOs of all time and the largest since AT&T Wireless' (AWE: Research, Estimates) $10.62 billion float in April, which currently ranks as the third-largest in history, according to CommScan, a New York-based investment banking research firm. Italy's Enel Societa per Azioni's $16.5 billion offering last October ranks as the largest offering ever.
Still, the deal outpaces the previous top float out of Asia: a $3.9 billion deal from the Hong Kong-based China Telecom Ltd. (CHL: Research, Estimates), a cellular telecommunication services provider, in 1997.
China Unicom is scheduled to start trading Wednesday, June 21 on the New York Stock Exchange and June 22 in Hong Kong. The company's proposed symbol is "CHU."
More than just telephones
Steve Harmon, chief executive of Internet investment firm Zero Gravity Internet Group (e-harmon.com), said the company's lock on the China market gives China Unicom a high cash flow and high revenue streams. In fiscal 1999, the company reported net income of $101 million and revenue of $2.1 billion.
China Unicom offers cellular, paging, long distance, data and Internet services. "China Unicom has multiple revenue streams and it's not just into telephone and wireless," Harmon said. "Their potential is massive as a global telecom."
China Unicom could also begin acquiring other companies in Europe because its uses the Global System Mobile Communications (GSM), a wireless standard that is used worldwide.
"Because they use GSM technology they have the ability to move into other parts of Europe. It makes acquisition easier," he said.
China Unicom's only competition in the country is China Telecom, the dominant wireless provider in China. In 1999, China Telecom's revenue climbed 47 percent to $4.7 billion.
However, Harmon doesn't expect the deal to climb into the triple digits. "There will be a moderate pop, maybe up to 10 percent," he said. Similar to the experience of AT&T Wireless, which offered a huge 360 million shares at $29.50 each, China Unicom's 2.46 billion American depositary receipts at $19.99 will keep first day gains low, Harmon said.
In addition to the 2.46 billion shares sold Friday, China Unicom granted its underwriters an overallotment of 368.87 million shares, which can be sold if demand for the offering runs high. Including that overallotment, the deal could reach a value of up to $5.65 billion, Reuters said Friday.
On Monday, China Unicom boosted the price range of the IPO to $17.71-to-$20.53, after originally filing to price its ADRs at $14.76-to-$18.61 each. 
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