China's flagship carrier Air China began pre-marketing a $800 million to $1 billion IPO on Monday under the lead management of CICC and Merrill Lynch. Based on December 2005 profit forecasts of $305 million to $333 million, the deal is being pitched on a forward multiple of 8 to 10 times earnings.
At the mid point of this range, the deal is being marketed at a 4% premium to China Eastern, a 10% discount to China Southern, an 18% discount to Cathay Pacific and a 35% discount to its own 69% owned subsidiary, China National Aviation Corp CNAC.
These discounts are based on the mid points...
