Sino-Ocean surges 44pc in grey market

PUBLISHED : Friday, 28 September, 2007, 12:00am
UPDATED : Friday, 28 September, 2007, 12:00am

Shares in Sino-Ocean Land Holdings, which begin formal trading today, rose 44 per cent in the grey market, according to Phillip Securities' electronic trading platform.

The shares, which were allotted at HK$7.70 each, closed at HK$11.10 after hitting HK$11.48 earlier on PhilipMart, the only Securities and Futures Commission-licensed pre-initial public offering trading platform.

The Bohai Rim-focused property developer raised HK$11.9 billion from the sale of 1.55 billion shares. The public offer was 206 times oversubscribed.

Li Ming, Sino-Ocean chief executive, said the money raised would be used for the development of its 8.59 million square metres of gross floor area of land reserves, which are mainly in Beijing, Tianjin, Dalian and Shenyang.

Among them, about seven million square metres of gross floor area is for residential use and 1.5 million sq metres designated for office and hotel use.

The company would continue to replenish its land bank, which would include buying assets from its parent Cosco International, Mr Li said.

He described acquiring assets from the parent as 'our niche'.

All new acquisitions would focus on residential sites, he added.

Mr Li said the mainland property market would see positive performance, as long as the macro economy continued to grow. 'In the foreseeable future, I expect to see a robust economy in the mainland.' Commenting on the expected credit-tightening measures on people buying their second home, Mr Li said even if the measures were introduced, they would have a limited impact on the sector, citing strong demand from end-users as a reason.

The China Daily, citing sources, this week said those buying their second property would have to pay a 40 per cent down payment, up from 30 per cent, while the deposit could reach 50 per cent for people buying flats for commercial use.

Earlier, Sino-Ocean sold a Beijing luxury residential project to Frasers Hospitality, a Singapore-based serviced residence management firm, for US$130 million.

Mr Li said earnings from the project would be booked for the financial year ending December.

He refused to disclose the amount but said gross profit margin of the group's developments was around 30 per cent.

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The offering raised HK$11.9 billion from the sale of 1.55 billion shares

The price Sino-Ocean Land shares closed in pre-IPO trade, in HK$11.10