China First Heavy Industries fails to raise highest valuation

China First Heavy Industries failed to raise the maximum amount of capital sought in its mainland IPO, Bloomberg reported. The offering by the manufacturer of heavy equipment for the mining, energy, and petrochemical industries raised US$1.67 billion from 2 billion shares, but share prices failed to reach the upper end of the predicted price range. This represents the first time since June that a company’s offering has failed to reach the highest possible valuation, and is likely due to the adjustment made by the Chinese Securities Regulatory Commission to the pricing mechanism for IPOs. Combined with the recent first-day declines of China XD Electric and China Erzhong, China First Heavy’s performance offers further evidence that China may be losing its appetite for IPOs.