Hong Kong’s Chinachem Moves into Healthcare with $57M Acquisition

Hong Kong developer Chinachem has agreed to pay HK$451.2 million ($57.5 million) for a majority stake in a Hong Kong-listed senior care provider as the company prepares to expand into healthcare and senior living.

Privately held Chinachem will acquire a 56.15 percent interest in HKEX-listed Pine Care Group from entities owned by Stan Tang, the youngest son of late “Shop King” Tang Shing-bor, his brother Jason Tang and the patriarch’s widow, according to a Tuesday joint announcement by Chinachem and Pine Care.

“This agreement marks another crucial investment under our business diversification strategy, and opens a new chapter in our healthcare and elderly care business development,” Chinachem executive director and CEO Donald Choi said in a release. “Given Hong Kong’s ageing demographics, we are confident in the prospects of the healthcare and elderly care industry.”

The investment is the third major move towards diversifying its portfolio that Chinachem has taken this month, after the Hong Kong firm took a 49 percent stake in an ESR project in mid-August as its first logistics project and last week was revealed as the buyer of a London office building, which is now its first overseas asset.

Elderly Services

Upon completion of the transaction, the Tang family and other insiders will retain 18.9 percent of Pine Care Group and other public shareholders will own 24.96 percent. Chinachem will then make a mandatory unconditional cash offer for the remaining issued shares it does not own.

Founded in 1989, Pine Care Group began trading on the Hong Kong stock exchange in 2017. The company operates 11 elderly care facilities, including one in Hong Kong Island, seven in Kowloon and three in the New Territories.

Pine Care’s revenue, which amounted to HK$267.7 million in fiscal 2022, is mainly generated from elderly home care services and sales of related goods.

The group’s land and buildings, which are occupied and used by Pine Care for its business, were independently appraised at more than HK$1.5 billion as of March 2022. Factoring in the carrying value for the land and buildings yielded a revaluation surplus of HK$918 million.

The Tangs have been scrambling to unload assets in the wake of Hong Kong’s COVID-led retail slump and their patriarch’s death last year. The family reportedly sold the Patina Wellness Centre, a Kowloon City facility managed by Pine Care and Tang’s Living Group, to K&K Property Holdings for HK$1.14 billion around July of this year.

More recently, the Tangs agreed to sell the Wing Shing Industrial Building in Kowloon to fund manager Kailong Group for HK$433 million, marking the family’s 20th major asset sale in 2022.

Buying Bonanza

Chinachem, founded more than 60 years ago by a Shanghai merchant family, has stayed busy buying real estate during the market dip.

In April of this year, the developer picked up its third Hong Kong site in 15 months when it won a government tender for a commercial site near the city’s international airport with a $350 million bid.

In May of last year, Chinachem had teamed up with local competitor Hysan Development to acquire a commercial site in the Causeway Bay area in a separate government tender for $2.6 billion.

The privately held firm went global in August with the £158 million ($186.2 million) purchase of TikTok’s London headquarters, known as the Kaleidoscope, in the Farringdon area.

The London transaction was reported just one week after it was revealed that Chinachem was making its initial venture into the logistics market by taking a 49 percent stake in a $1.4 billion ESR project in Hong Kong’s Kwai Chung area.