Less than two years after delisting from the New York Stock Exchange, China’s largest real estate agency has submitted an IPO application to the Hong Kong Stock Exchange, according to a statement uploaded to the exchange’s website.
E-House China, which operates the real estate data provider CRIC Information Group in addition to its network of property sales and marketing offices across China, filed the application for what some analysts expect will be a $600 million Hong Kong listing on Thursday night, just days before new rules took effect to allow companies listing on the bourse to make use of dual-class share structures.
E-House delisted from the NYSE in August 2016 at $6.85 per share in a venture-backed deal that valued the company at $1.2 billion.
Developers Support Agency Re-Listing
E-House’s de-listing from the NYSE and the subsequent relisting has received support from mainland real estate developers which rely on the agency’s marketing services.
China’s top three developers by contracted sales, Country Garden, Evergrande Real Estate and China Vanke each hold 15 percent stakes in the property agent as it prepares for its new public listing. Country Garden disclosed in late December that it had agreed to borrow just less than HK$1.8 billion (US$228 million) from BNP Paribas for 36 months for the purposes of purchasing a 12.35 percent stake in E-House China, and the mainland developer’s Hong Kong subsidiary took an additional 4.21-percent share in E-House, according to an account in Yicai Global.
In addition to these investments by China’s big three developers, Fujian-based Lonking Holdings, Agile Property, Sunac China all took two percent stakes in E-House along with Evergrande vice chairman Xia Haijun and Guangzhou R&F Properties co-chairman Li Sze-lim who invested as private individuals.
China’s Biggest Property Marketing Firm Moves Listing Closer to Home
The agency’s primary business of marketing residential projects generated revenue of RMB 3.9 billion in 2017, making it the largest in China. Covering 186 cities across the country, the first-hand property agency services account for 84.7 percent of the company’s total revenue at an average commission rate of 0.91 percent in 2017.
E-House’s data platform CRIC is also China’s biggest real estate data provider by the number of cities covered, a Cushman & Wakefield report commissioned by E-House shows.
The Chinese company took itself private in late 2016 after being listed on the New York Stock Exchange since 2007.
Hong Kong to Allow Dual Class Shares
E-house’s IPO application comes as the Hong Kong Stock Exchange liberalised its listing rules on April 30th to allow companies that have shares with different voting rights to go public in Hong Kong. Allowing the share-holding framework, which has been popular with tech firms, is expected to attract new listings to the city.
Chinese smartphone maker Xiaomi is expected to submit its IPO application to the Hong Kong Stock Exchange this week. With a latest value being $65 billion and $70 billion, Xiaomi is expected to raise at least $10 billion from the public offering, possibly the biggest IPO in Hong Kong this year.