China Merchants' REIT IPO seeks US$800m

Business | Bloomberg and Avery Chen 17 Jul 2019

China Merchants Shekou Industrial Zone, the parent of China Merchants Land (0978) is planning an initial public offering of a real estate investment trust in Hong Kong, the city's first REIT listing in five years, according to people with knowledge of the matter.

The company has engaged potential advisers for the share sale and aims for a listing as soon as this year, they said, asking not to be identified because the information is private. The share sale could raise about US$800 million (HK$6.24 billion).

China Merchants Shekou's offering would be the first REIT listing in Hong Kong since Spring Real Estate Investment Trust (1426) raised US$216 million in 2013.

Meanwhile, six companies started trading on the mainboard yesterday, with five stocks closing above their IPO prices.

Shares of mainland developer Zhongliang (2772) advanced 7.21 percent to HK$5.95. Chief executive Hang Chunlei said the mainland home price will remain stable in the second half as the government is not expected to ease property market control. The company set its full-year contracted sales target at 130 billion yuan (HK$147.7 billion) in 2019, 8 percent higher than last year.

Mainland higher education provider Edvantage (0382) rose 0.7 percent to HK$2.85, eyewear manufacturer Kelfred (1134) increased by 6 percent to HK$1.06, while integrated circuit supplier Contel Technology (1912) was also up 6 percent to HK$0.69.

Thailand information technology provider Platt Nera (1949) was the best performer among the six companies, whose shares surged 24 percent to HK$1.55. Only Kimou Environmental (6805), wastewater treatment services provider, fell 2.2 percent to HK$1.3.

Elsewhere, Alibaba's shareholders approved the one-to-eight share split plan, as the e-commerce giant prepares for a stock sale in Hong Kong. The split should take place no later than July 2020.

It proposed to increase the number of ordinary shares eight-fold to 32 billion.

Alibaba is said to have filed for a listing in Hong Kong last month via a confidential exchange application. Mainland media reported that Alibaba aims to raise about US$10 billion, only half of the previously reported target of US$20 billion.

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