(Yicai Global)  March 12 -- Zhejiang New Century Hotel Management, a Chinese midscale to upscale lodging franchise, has raised HKD1.2 billion (USD147.8 million) in its modestly aspirational initial public offering in Hong Kong. 

New Century Hotel [HK: 1158] priced its shares at HKD16.5 each. It opened at HKD15 yesterday and rose 2.3 percent to HKD16.88 by the close. The stock slipped to trade at HKD16.44 at 9.52 a.m. 

The company will use up to 60 percent of the proceeds to develop its premium and mid-range hotels, its prospectus shows. The rest will go to branding, talent acquisition, technology upgrades and operations.

New Century Hotel will expand its portfolio through a flexible operation and management model to enhance its brand influence, Chairman and Executive Director Jin Wenjie said in an interview with Yicai Global.

The firm's management costs are very low since most of its hotels are franchised, Zhao Huanyan, a specialist at Shenzhen's Huamei Restaurant Management Consulting, told Yicai Global. 

China's biggest online travel agency Ctrip.Com and Shanghai's GreenTree Hospitality Group are some of the cornerstone investors in the IPO. The investment may involve deepening collaboration but as the stock purchases are quite small, the main purpose may be to wait until the price rises and then sell, according to Zhao. 

Washington-headquartered private equity firm the Carlyle Group allegedly invested USD100 million in the hotel group many years ago but the prospectus shows that the investor is not among the shareholders. 

Editor: Emmi Laine