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Sun Hung Kai could list UAF: Bloomberg
Posted on Friday, 21 April 2017 08:33
Sun Hung Kai is revisiting two-year-old plans to float United Asia Finance (UAF) in Hong Kong via an initial public offering (IPO) potentially worth USD 500.00 million, a source with knowledge of the matter told Bloomberg.

When contacted by the news provider, a spokeswoman for the Hong Kong-listed parent, which owns 58.0 per cent of the consumer finance arm, said in an email: “At the moment there is no definitive timetable for its separate listing.

“Generally we are open to options to crystallise value of our business and investments at the right time, and UAF will be an attractive investment for investors given its solid business and growth prospects.”

Sun Hung Kai took control of UAF from Allied Group in 2006 for HKD 4.33 billion (USD 556.90 million at current exchange rates) - giving the business a market valuation of between HKD 8.55 billion and HKD 8.89 billion.

According to Zephyr, the M&A database published by Bureau van Dijk, the deal was one of the largest acquisition of a Hong Kong-based or incorporated company that year.

Today, UAF operates as Sun Hung’s consumer finance arm through online platforms and a branch network in the region and mainland China and mainly offers unsecured loans to individual consumers and small businesses.

It has spent more than a year strategically restructuring its operations in the People’s Republic following an abrupt economic downturn which led to an increase in loan deficiencies and ended up hurting the unit’s results.

During 2015 UAF closed 51 underperforming branches on the mainland, leaving a total of 107 locations as at the end of 2016 and has been phasing out its property mortgage activities to focus mainly on unsecured personal loans.

Its net profit attributable to shareholders increased to HKD 623.80 million fiscal 2016 (FY 2015: HKD 530.40 million), generating an 8.4 per cent annual return on average shareholder funds of HKD 7.45 billion during the year.

© Zephus Ltd