Longfor seeks up to US$1 billion in unit's HK IPO

LONGFOR Group Holdings is considering an initial public offering for its property management business in Hong Kong that could raise as much as US$1 billion, sources said.

The Chinese real estate developer is working with China International Capital, HSBC Holdings and JPMorgan Chase & Co on the proposed first-time share sale, said the sources. The listing could take place as soon as the first half of 2022, they said. Deliberations are ongoing and details such as timing and fundraising size could change, they said. Representatives for CICC, HSBC, JPMorgan and Longfor declined to comment.

Shares in Longfor rose as much as 3.1 per cent on Wednesday (Nov 24) in Hong Kong, touching their highest intraday level since July 27.

Longfor is weighing a separate listing at a time when Chinese developers are facing an unprecedented liquidity crisis and housing prices and sales have begun to slide. New home prices declined in September - the first drop in 6 years - and continued to slump in October, National Bureau of Statistics figures showed.

The Beijing-based company is among the Chinese real estate developers least affected by the crunch. Its shares have declined nearly 12 per cent in the year to date, only the eighth largest fall on Bloomberg Intelligence's China Real Estate dashboard. The largest is China Evergrande Group, whose shares fell 80 per cent this year.

Longfor would join a slew of Chinese developers taking similar businesses public. China Vanke is planning to list its property service unit in Hong Kong, the company said in an exchange filing this month. The country's biggest developer by market value could raise about US$2 billion in an IPO of the unit, Bloomberg News reported in April.

Founded in Chongqing in 1993, Longfor's businesses include residential and commercial real estate and rentals, according to its website. Its Longfor Smart Service unit, started in 1997, serves over 3.6 million household owners across a contracted service area of 480 million square metres.

Longfor's property management and related smart services revenue jumped 58 per cent year on year to about 4 billion yuan (S$856 million) in the first half of this year, the company's 2021 interim report said. BLOOMBERG