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CDL to invest HK$237.81m in property service provider E-House's Hong Kong IPO

E-House IPO
E-House has a salesforce of 17,000 agents in 186 cities across 30 Chinese provinces.

CITY Developments Limited (CDL) will invest HK$237.81 million (S$41.1 million) in property services provider E-House's initial public offering (IPO) on the Hong Kong Stock Exchange, making it a cornerstone investor alongside Alibaba, China state-owned Overseas Chinese Town Holding, and an associate company of Hong Kong-based Henderson Land Development.

E-House's main businesses comprise real estate agency services in the primary market (E-House Marketing), real estate data consultancy (CRIC) and property brokerage network services (Fangyou). With a salesforce of 17,000 agents in 186 cities across 30 Chinese provinces, E-House is "widely-regarded as China's preeminent real estate transaction service provider", CDL said in a press statement on Tuesday.

The company's key business of marketing residential projects generated revenue of 3.9 billion yuan (S$796.53 million) in 2017, CDL said.

According to E-House's prospectus, CDL will make the investment through its wholly owned investment holding firm, Educado Company Limited. The offer price for E-House's stock is expected to be between HK$14.38 and HK$17.68, with the price determination date on or around July 14, and no later than July 19.

CDL is expected to subscribe for a range of shares between 13.45 million (at the higher end of the indicative offer price range) to 16.54 million (at the lower end).

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CDL group chief executive Sherman Kwek said that he sees "strong potential in E-House's growth", adding that CDL was "very honoured to be invited as a cornerstone investor in E-House's IPO".

"Aside from investing in residential, commercial and mixed-use projects in Shanghai, Suzhou and Chongqing, the next logical step was to invest in the nation's (China's) top sales agency with an extensive network of agents and a deep,
robust database for purposes of research and analytics," Mr Kwek said.

CDL's shares were up 1.14 per cent to S$9.73 as at 11.11am on Tuesday.

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