Thid undated file photo shows an advertisement for China Vanke Co Ltd in the Shenzhen Metro. (PHOTO / XINHUA)
HONG KONG - Developer China Vanke Co Ltd's property services arm has launched the largest initial public offering of 2022 in the Hong Kong Special Administrative Region, aiming to raise up to US$783.5 million.
The subsidiary, Onewo Space-Tech Service, has set a price range of HK$47.1 (US$6) to HK$52.7 a piece in the public offering of 116.74 million of its shares, which represent 10 percent of the company's share capital, according to a deal term sheet.
China Vanke Co Ltd, which is Chinese mainland's second-largest property developer by sales and is listed both in Shenzhen and the HKSAR, owns 62.9 percent of Onewo Space-Tech Service and is its biggest customer, regulatory filings showed
The price range values Onewo at US$7 billion to US$7.8 billion.
Vanke, which is Chinese mainland's second-largest property developer by sales and is listed both in Shenzhen and the HKSAR, owns 62.9 percent of Onewo and is its biggest customer, regulatory filings showed.
Once Onewo's shares debut on the Hong Kong stock exchange, their performance is also likely to influence the prospects of other property services companies looking to raise capital through public offerings.
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The Onewo IPO would not be directed at raising liquidity for Vanke, Yu Liang, chairman of the parent company, said on Aug 31. The subsidiary accounted for only 1 percent to 2 percent of Vanke's assets and profits, Yu added.
Global financial market volatility led to Onewo's IPO being scaled back from an initial ambition to raise up to US$2 billion, people with knowledge of the matter previously told Reuters.
Onewo said it planned to use funds from the IPO to expand its existing businesses, upgrade its software and take majority stakes in three to five "value added" service providers in its sector.
Onewo said it planned to use funds from the IPO to expand its existing businesses, upgrade its software and take majority stakes in three to five "value added" service providers in its sector
The IPO deal has participation from six cornerstone investors that have together subscribed for up to US$280 million worth of the shares, the filings showed. Among those investors are the mainland's Mixed Ownership Reform Fund, China Chengtong Investment and UBS Asset Management.
The IPO final price will be set on Sept 22; public trading of the shares is due to begin on Sept 29.
The deal also comes as a boost for the HKSAR bourse.
Companies have raised just US$2.42 billion in IPOs in the HKSAR so far in 2022, versus US$23.76 billion in the same period of 2021, Refinitiv data showed.
Onewo's transaction will become the city's largest IPO of 2022, eclipsing that of Huitongda Network Co Ltd, which raised $297 million in February.
The two largest equity deals in the HKSAR this year - China Tourism Duty Free Corp's US$2.1 billion share sale and one by Tianqi Lithium's worth US$1.7 billion - were secondary listings. Both firms were already listed on the mainland.
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