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Hengda Real Estate Keen on HK IPO
(SinoCast China Financial Watch Via Thomson Dialog NewsEdge) HONG KONG, May 22, SinoCast -- Hengda Real Estate Group, a leading property developer in economically developed province Guangdong, expects to go public in Hong Kong next month, reports said. Total fundraising is expected to reach between USD 500 million and USD 750 million. Hengda began raising money from international investment banks last December. Merrill Lynch, Deutsche Bank and Temasek Holdings, in this January, invested a total of USD 400 million for a combined 8% stake in the group. The real estate developer is understood to be attracted by easier listing procedures in Hong Kong compared with those at home. Any applicant with strong profit-making capability and brilliant prospect can be qualified to get listed on the Stock Exchange of Hong Kong. Hong Kong investors consider more about a company's land reserve when judging a real estate stock. To win investors, Hengda bought 18 land plots in several cities in the first three months this year. On April 20, it invested CNY 3 billion into a super-large project in Luoyang, the second-biggest city in central China's Henan Province. Hengda's IPO just follows Country Garden Holdings (2007.HK), also a Guangdong-based developer who got listed in Hong Kong stock market on April 20. Country Garden was warmly embraced by Hong Kong investors during its IPO. It sold 2.4 billion H-shares at HKD 5.38 per share, the top end of the indicative price range. The share offer generated total proceeds of HKD 12.9 billion, the ever largest amount raised by a mainland developer. At the same time, Hong Kong property companies are turning more sights into the mainland market. Sun Hung Kai Properties (0016.HK), the biggest real estate developer by market capitalization in Hong Kong, is applying for a six-year syndicated loan. HKD 14.5 billion has been approved, according to local sources. In the past year, Sun Hung Kai Properties collected HKD 8 billion. All the moves are believed to finance its mainland land reserve. Currently, mainland land reserve accounts for 10% of the company's total assets. The figure is expected to reach 15% in the near future. The Hong Kong real estate king recently is seeking investment opportunities in mainland cities of Wuxi and Hangzhou, said its chairman, Walter Kwok Ping-sheung. Another player CITIC Pacific Limited (0267.HK) plans to raise the mainland business from present 50% to 70% in the following two to three years. The company is wholly owned by China International Trust & Investment Corporation Hong Kong (Holdings) Limited. (USD 1 = CNY 7.66)
Copyright 2007 SinoCast LLC
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