China Vanke's unit seeks up to $1.1b in Hong Kong IPO with Temasek among investors

The listing would provide a guide to how investors mulling new share sales rank assets tied to China's developers. PHOTO: REUTERS

HONG KONG - Onewo, the property management unit of real estate developer China Vanke, is planning to raise as much as about HK$6.2 billion (S$1.1 billion) through a Hong Kong initial public offering (IPO).

The firm is offering about 116.7 million shares at HK$47.1 to HK$52.7 each, according to an exchange filing.

The share sale attracted six cornerstone investors that have agreed to purchase as much as US$280 million (S$394 million) worth of shares. China Chengtong Holdings Group and Singapore's Temasek are among the cornerstone investors.

The listing would provide a guide to how investors mulling new share sales rank assets tied to China's developers. China's real estate sector has been under pressure this year, with Covid-19 lockdowns hurting home sales by already cash-strapped builders.

The IPO joins other billion-dollar offerings taking place in Hong Kong since July, following a drought of large listings in the first half of the year. Proceeds raised through new share sale in the city slumped in 2022 amid headwinds ranging from high inflation to surging rates and regulatory woes in China.

Onewo offers residential property services, commercial and urban space integrated services and so-called remote space-tech solutions, incorporating artificial intelligence and business process outsourcing, according to its prospectus. China Vanke currently owns about 63 per cent of the property management unit.

Shenzhen-based Vanke last month stood out as the first top-tier China property developer to report stronger earnings, defying a downturn that has engulfed peers once seen as relatively safe.

Onewo's IPO could boost Vanke's cash coverage of short-term debt and cornerstone investors such as Temasek could strengthen the listing's appeal, Bloomberg Intelligence analysts Kristy Hung and Lisa Zhou wrote in a note.

Onewo expects to price the shares on Thursday, with the listing in Hong Kong slated for Sept 29. Citic Securities, Citigroup and Goldman Sachs Group are joint sponsors of the offering. BLOOMBERG

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