Dalian Wanda Group is looking to raise 20 billion yuan ($3.08 billion) before listing its commercial property management unit in Hong Kong.
The Chinese conglomerate is targeting a valuation of 200 billion yuan ($30.79 billion) for its unit Wanda Light Asset Commercial Management Co., as reported by Reuters today, citing people familiar with the situation. Meanwhile, one source noted that the valuation was “too high,” according to the news outlet.
By July, Wanda intends on finishing fundraising and then file for an IPO application in September.
Assuming 10% of Wanda Light’s shares are sold at a 200 billion yuan valuation, then it would become the biggest Hong Kong IPO by a property management firm since at least 2016.
The news of the IPO comes after a hot 2020 for Chinese real estate stocks in Hong Kong. According to data from Refinitiv, Chinese property developers and managers fetched a record $10.4 billion via Hong Kong listings in 2020.
Some listings included Shimao Services (HKEX: 0873) and KWG Living Group (HKEX: 03913), which spun off from their parent companies, raising HK$9.8 billion ($1.26 billion) and HK$3 billion ($386.9 million), respectively.
Evergrande Property Services Group Ltd. also spun off from its parent company, raising HK$14.3 billion ($1.84 billion).
The demand to raise funds for Chinese property management firms comes amid pressure from regulators. Companies have been looking to raise money to cut debt and tackle other financial challenges.
Wanda Commercial Management Group, the parent of Wanda Light, withdrew its mainland China IPO application over “strategic considerations.”
In March, the Zhuhai municipal government invested 3 billion yuan in Wanda Light. Also, the Zhuhai government will serve as one of the lead investors on the fundraising ahead of the IPO, according to Reuters.