China's real estate portal aims to list on mainland

A property showcase in Beijing. Developers are among a growing number of Chinese companies seeking higher valuations by moving their listings from New York or Hong Kong to mainland exchanges.
A property showcase in Beijing. Developers are among a growing number of Chinese companies seeking higher valuations by moving their listings from New York or Hong Kong to mainland exchanges.PHOTO: EUROPEAN PRESSPHOTO AGENCY

It is among Chinese firms seeking higher valuations by switching from listings abroad

BEIJING • SouFun Holdings plans to switch its stock listing from the United States to China, joining companies including Dalian Wanda Commercial Properties that are seeking higher valuations on mainland stock exchanges.

SouFun, China's biggest real estate Web portal, is seeking to move its shares to the Shanghai stock exchange via an asset and share swap with storage-battery manufacturer Chongqing Wanli New Energy.

Wanli will use shares worth 16.2 billion yuan (S$3.7 billion) to buy SouFun assets through its units, Wanli said in a revised asset purchase filing on Tuesday.

Separately, Wanli plans to raise 3.01 billion yuan through private placements to fund operations. The proposal is pending regulatory approval.

Shares of Wanli surged by the 10 per cent daily limit to 36.40 yuan after they resumed trading in Shanghai yesterday. They had been suspended since last August.

SouFun is among a growing number of Chinese companies, notably developers, seeking higher valuations by moving their listings from New York or Hong Kong to mainland exchanges.

Billionaire Wang Jianlin's Wanda Commercial is asking investors to back an effort to take his Hong Kong-traded property company private and relist it in China, according to a document obtained by Bloomberg News.

Sources said Dalian Wanda may seek a "backdoor listing" on the Shanghai stock exchange if it does not get regulatory approval to launch a planned initial public offering on the bourse soon, which could set it on a quicker track to tap the mainland China share market.

The prospect of buying a shell firm as a means to establish a listing in Shanghai is a backdoor listing.

Two previous Shanghai IPO applications by the property arm of China's richest man were rejected in 2010 and 2014 as Beijing sought to keep a lid on expansion of the property sector.

Evergrande Real Estate Group agreed to acquire a stake in a Shenzhen-listed entity, an acquisition that could signal that chairman Hui Ka Yan is also considering a similar move of relisting in China.

The firm has become the most indebted of 198 listed Chinese real estate developers, data compiled by Bloomberg shows.

SouFun's valuation would be 40 times its expected 800 million yuan profit this year, based on Wanli's share price before the stock was suspended, China Securities analysts led by Shanghai-based Chen Shen wrote in a note.

SouFun's US-listed shares trade at 11.9 times 2015 earnings, data compiled by Bloomberg shows.

China-listed stocks trade at an average 139.4 times 2015 earnings, compared with 28.4 times for stocks traded in Hong Kong and 40.2 times for US-listed companies. 

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on May 05, 2016, with the headline 'China's real estate portal aims to list on mainland'. Print Edition | Subscribe