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Evergrande considers Hong Kong float

By Wang Ying (China Daily)
Updated: 2009-08-11 07:57

Property developer Evergrande Real Estate Group is planning to get listed on the Hong Kong capital market with an initial public offering that could raise as much as HK$11.7 billion.

The Guangzhou-based developer is said to have submitted its listing proposal to the Hong Kong bourse. Evergrande owns the largest land reserves among China's realty developers, with market capitalization in excess of HK$100 billion, analysts said.

Country Garden Holdings Co Ltd, a Guangdong-based property developer controlled by billionaire Yang Huiyan, had earlier raised HK$12.9 billion.

"The IPO application procedure in Hong Kong is less time-consuming than in Shanghai or Shenzhen," said Zhao Duo, analyst, Sealand Securities. "In addition, going public in Hong Kong will also help attract more international investors," said Zhao.

After last year's failed attempt, privately owned Evergrande has completed some of the listing procedures, and also retained its stock code "3333", which it acquired for 1 million yuan. Evergrande in all probability is likely to float its shares in Hong Kong by September, said analysts.

Li Chenxi, media relations officer with Evergrande, did not respond to queries on the listing plans but admitted that the developer had shelved similar plans last year due to the economic crisis.

This timer around Evergrande is believed to have scaled down its ambitious goals. Last year, it planned to raise 16.58 billion yuan from the float, with share prices ranging from HK$3.5 to HK$5.6.

"The deteriorating outlook of domestic property market and equity market, together with the tightening credit line led to last year's suspension," said Huang Qinglin, analyst, Greatwall Securities.

Related readings:  Evergrande, Wing Fat ax IPOs  Evergrande builds up pre-IPO land reserve  Real estate firm Evergrande eyes March offering

Evergrande subsequently faced a capital shortage and decided to seek $506 million of venture capital from foreign investors.

The company sold 12.7 billion yuan worth of flats in the first half, making it China's first private developer to have sales in excess of 10 billion yuan. Currently, it is the nation's sixth-largest developer by sales volume and the third-largest property developer by total area sold.

Evergrande hopes to retain the title of "the largest land bank in China", by expanding its holdings to 50 million sq m by December. Xu Jiayin, Evergrande's chairman and company founder, told reporters earlier that he expected the company to sell 18 billion yuan worth of homes in the second half.