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E-House’s IPO valued at up to HKD 5.7bn
Posted on Wednesday, 11 July 2018 13:32
E-House China is returning to the stock market, albeit in Hong Kong and not in the US, some two years after the Chinese real estate services giant was taken private for about USD 562.40 million.
Today, the brokerage network-to-agency activities operator has lined up an initial public offering (IPO) that values the entire company at HKD 21.10 billion and HKD 25.94 billion (USD 2.69 billion and USD 3.31 billion).
It has also roped in Alibaba, Overseas Chinese Town, City Developments and a company associated with Henderson Land as cornerstone investors for the debut slated for 20th July.
E-House is selling 322.84 million stocks to raise between HKD 4.64 billion and HKD 5.71 billion to finance the upgrade of data systems and geographical expansion of brokerage and agency operations.
Proceeds will also fund staff training, brand promotion and the development of an integrated service management platform.
At HKD 14.38 to HKD 17.68 apiece, the price range values unaudited pro forma adjusted net tangible assets at HKD 5.57 to HKD 6.28 per share.
E-House claims to be a leading real estate transaction service provider in China, with the largest revenue from agency activities in the primary market in 2017, based on a report by Cushman & Wakefield,
According to the prospectus, the company was also the biggest by most cities with both property deals and land data covered, and second in terms of brokerage network by the number of stores, as of 31 December 2017,
It generated revenue of CNY 4.63 billion (USD 698.74 million) in the financial year ended 31st December 2017 and CNY 930.20 million in Q1 2018.
Net profit has steadily risen and reached CNY 765.31 million and CNY 152.38 million in FY 2017 and Q1 2018, respectively.
It has reduced its gearing ratio from 20.8 per cent, as at 31st December 2017 (31st December 2016: 26.7 per cent), to 17.7 per cent, as at 31st March 2018 (31st March 2017: 30.1 per cent).
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