(Updates midday price, adds details)
By Vicki Kwong
HONG KONG, Oct 31 (Reuters) - Luxury fashion retailer Ports Design Ltd made a dazzling stock market debut in Hong Kong on Friday, jumping a third on investor hopes of growing demand for expensive clothes among affluent Chinese.
The company, which runs the Ports International clothing chain in Asia, raised HK$367.5 million ($47.12 million) from a share sale handled by CLSA Equity Capital Markets Ltd.
Shares in Ports Design ended the morning session at HK$14, up 33 percent from the issue price of HK$10.50. By contrast, the benchmark Hang Seng Index eked out a 0.14 percent gain.
"The P/E is fairly low and China likes luxury goods," said Dale Tsang, managing director at GC Capital (Asia) Ltd.
Ports Design's chairman has said a typical Chinese worker would have to save two to three months' salary to afford its formal outfits, which cost an average of 2,000-3,000 yuan ($242-362).
It sold its IPO shares at a price about 13.6 times forecast 2003 earnings. Giordano International Ltd , a Hong Kong-based casual wear retailer that counts China as one of its key markets, is trading at 23.3 times forecast 2003 earnings.
Ports Design expects net proceeds of about HK$244 million from the deal, most of which will be used to open new stores, expand production facilities and repay loans.
The company, which also has a licence from BMW AG to make clothes under the German luxury car maker's brand in China, has about 250 outlets in mainland China and Hong Kong.
Ports Design has said it plans to increase its number of stores in China by 10 percent a year. It also hopes to open up to 10 BMW specialty stores annually.
The retailer sold 35 million shares, or 26.8 percent of its enlarged share capital, for its initial public offering.
The retail portion of the deal was raised to 40 percent from 10 percent after it was 90.6 times covered. The institutional tranche was 15 times subscribed.
Ports Design expects to earn at least 107 million yuan ($12.93 million) this year, which would be a 15 percent increase from 2002.
Ports Design is a unit of Canadian-listed CFS International . The Government of Singapore Investment Corp (GIC) holds 12.43 percent of the listed firm.
The company's IPO shares included 10 million existing shares sold by a shareholder. ($1=HK$7.8=8.28 yuan)