Evergrande shares dazzle on HK debut

08:46, November 06, 2009      

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Evergrande Real Estate Group Ltd, the largest mainland developer by third-quarter sales, rose as much as 37 percent on its trading debut in Hong Kong.

Guangzhou-based Evergrande gained 34 percent from its initial public offering price of HK$3.50 to close at HK$4.70 yesterday. It rose as high as HK$4.80 earlier.

Home prices in the mainland rose at the fastest pace in a year in September on a $586-billion government stimulus plan, lower bank cash-reserve requirements and a one-year lending rate at a five-year low. Evergrande and existing stockholders raised HK$5.65 billion ($729 million) selling 1.61 billion shares last month after pricing the IPO shares in the middle of the offered range.

"Investors are impressed by Evergrande's size," Francis Lun, general manager at Hong Kong-based Fulbright Securities Ltd, said in an interview. "This probably helps distinguish them from the other recently listed developers."

With a 68-percent holding, Chairman Hui Ka-yan and his wife may have become the mainland's richest couple based on the Hurun Rich List released last month. At the current share price their stake is worth about $5.2 billion. BYD Chairman Wang Chuanfu, is the richest person on the mainland according to Hurun, with a net worth of around $5.1 billion.

Hong Kong individuals ordered about 48 times the number of shares reserved for them in Evergrande's IPO, according to a person familiar with the matter. The institutional demand was multiple times shares available to them, the person said.

Evergrande develops mainly residential projects, including the Evergrande Royal Scenic Peninsula in Guangzhou, with 54 apartment buildings and 243 villas.

Excellence Real Estate Group Ltd, the largest developer in the central business district of Shenzhen, delayed a Hong Kong IPO last month that aimed to raise as much as $1 billion, citing "market conditions".

Yuzhou Properties Co, a Xiamen-based property developer, declined as much as 10 percent on its debut in Hong Kong this week. Mingfa Group (International) Co, a developer in the provinces of Fujian and Jiangsu, last week said it will restart its IPO later and cut the top end of an offering range by 24 percent.

Source:China Daily
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