SHANGHAI (BLOOMBERG) - China Evergrande Group, Asia's hottest stock, raised 60 billion yuan (S$12.3 billion) from selling a stake in a property unit, exceeding its previous guidance for the fundraising and providing more fuel for a rally that has crushed short-sellers.

The residential developer, which has projects across mainland China, surged as much as 8.5 per cent in Hong Kong on the stock sale on Tuesday (Nov 7). The stock was up 3.4 per cent as of 10:49am.

Evergrande will cut its stake in Hengda Real Estate to 63.5 per cent from 73.9 per cent, it said in a Hong Kong exchange filing on Monday. The company previously sold another 70 billion yuan of the unit's stock.

Once China's most-indebted developer, Evergrande has surged more than 500 per cent this year, the top performer in the MSCI Asia Pacific Index, partly through its efforts to reduce leverage. Also in the mix: the prospect of a higher valuation through a backdoor listing of Hengda's assets in China, share buybacks to fight off short-sellers, and signs of industry consolidation.

The fundraising amount exceeded August guidance of 30 to 50 billion yuan. Evergrande's leverage will decline to 151 per cent after the sale from 240 percent in the first half, Morgan Stanley analysts led by John Lam wrote in a note on Tuesday.

The six investors in the latest round of fundraising include Shandong Highway Investment and Suning Electrical Appliances. Evergrande also raised its profit forecasts for Hengda for the three financial years through 2020.

The latest sale implies a pre-fundraising valuation for the unit of 365 billion yuan, higher than the 268 billion yuan indicated when strategic investors bought stakes in June, Nomura Holdings Inc. analysts led by Elly Chen wrote. Nomura on Tuesday raised its price target for Evergrande to HK$32.6.

In Monday's filing, changed wording for a previously articulated investor guarantee indicated that Evergrande has given itself a longer timeframe to complete Hengda's backdoor listing.

Previous statements had said that Evergrande or its Chairman Hui Ka Yan are obliged to fully repurchase any investors' stakes in Hengda if the listing isn't completed by January 2020. That date was changed to January 2021 in the latest filing.

An extraordinary general meeting will be held Nov. 23 for shareholders to approve the stake sale, the exchange filing shows.