Sunshine 100 aims to list IPO in HK this year

But it is also wary of govt measures on properties, which will depress markets


(BEIJING) Chinese property developer Sunshine 100 aims to list shares in Hong Kong this year, although it is also watching whether the government imposes more measures to curb the red-hot sector, which could depress markets, its president said yesterday.

Sunshine 100 Real Estate Group, which has been planning to go public for several years, had hired Morgan Stanley and UBS as underwriters, industry and banking sources said.

Previously, the Beijing-based developer had tapped Credit Suisse, Deutsche Bank and UBS to underwrite an initial public offering that had aimed to raise US$1 billion, the sources said.

The company declined comment about its underwriters or the size of the offering.

President Yi Xiaodi said that the company would closely monitor government policies and market conditions, which have been volatile over the past month or so.

Earlier this month, Russia's Strikeforce Mining & Resources (SMR), China Tian Yuan Mining Ltd and Swire Pacific's 0019.HK property arm shelved IPO plans in Hong Kong as global debt worries dented investor appetites for corporate fundraising.

Swire Properties had put off plans as the pricing was relatively high, which might sap investor sentiment, analysts said.

'We have a very zen attitude about this. We don't want to be like other companies that want to price at a really high level. We'll be happy so long as it's priced reasonably,' Mr Yi told Reuters in an interview.

Sunshine 100 focuses on China's second- and third-tier cities, such as Liuzhou, Shenyang and Wuxi, where price rises have been more subdued than first-tier cities.

Analysts have warned of asset bubbles brewing in tier-one cities such as Beijing and Shanghai.

Some property developers, such as Evergrande 3333.HK, have delayed product launches or cut prices temporarily, wary of weak buying sentiment after the government announced a slew of measures in mid-April to curb prices.

That included raising down payments and mortgage rates for second home buyers, with the market looking to see whether cities such as Shanghai, will implement a controversial property tax.

'If they are in too much of a hurry to cut prices, then it'll be like pouring cold water on the market. There are bound to be side effects from a strong clampdown,' Mr Yi said.

Partly as a result of the latest measures, seen as the harshest in more than half a year or so, the 46-year-old said that the company expected sales this year to fall short by 20 per cent of its original target of around 8 billion yuan (S$1.63 billion).

However, the figure would still be higher than last year's 5 billion yuan, Mr Yi added. For next year, he said he was targeting sales of 10-12 billion yuan.

'There is a lot of urbanisation going on in second- and third-tier cities. That's going to help us drive growth.' - Reuters

Source: Business Times, 18 May 2010