Graff Diamonds starts investor meetings for Hong Kong float
THE London-based Graff started meeting with investors yesterday to gauge demand for its IPO, with a roadshow set to kick off on 21 May, sources said yesterday.
In the coming two weeks, the company, its bankers and advisers will meet with fund managers and institutional investors around the world, before deciding on a price range for the deal ahead of the roadshow.
Investors will have a better view on Graff’s valuation versus its peers after the price range is set.
Graff’s profit should reach $264m (£164m) in 2014 from $117m in 2011, but the growth rate is forecast to slow in the coming years.
Profit was expected to rise 42 per cent in 2012 from 2011, 29 per cent in 2013 and 23 per cent in 2014, the research note showed.
Sales are forecast to grow 16.2 per cent a year through 2014, above Tiffany’s 12.6 per cent, but lower than the 38.7 per cent for Chow Tai Fook, according to Goldman’s estimates. Chow Tai Fook, which trades at a 2012 price-to-earnings ratio of 14.6 times, raised about $2bn in a Hong Kong IPO in December.
Graff would be tapping Hong Kong equity markets after the worst start for IPOs in the Asia-Pacific region in about four years, with overall equity market activity down about a fifth from last year.
The company is betting on resilient demand for diamonds and high-end jewellery in the coming years, its founder said in a interview in November.
Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley were hired as joint global coordinators on the IPO.
Graff’s decision to list its shares in Hong Kong rather than London is a bitter blow to the London markets.