Shimao considers tourism property listing
Shimao Property Holdings says it has made preliminary inquiries with the stock exchange on the possibility of spinning off its hotel, tourism and leisure property business on the main board.
However, no formal listing application has yet been submitted, the company added in a filing to the stock exchange.
Analysts estimated Shimao could raise approximately 10 billion yuan (HK$11.95 billion) from the proposed separate listing, which could be applied to funding its hotel and tourism property projects.
'The intention of listing comes at a boom time for the mainland tourism market,' said Dundas Deng, an analyst at Guotai Junan Hong Kong.
The fast-emerging middle class on the mainland will generate strong travel growth, said Deng. 'It will create demand for more hotel rooms.'
The firm owns four hotels, with 1,994 rooms, and three others - the Hilton Shimao Nanjing, Holiday Inn Shimao in Shaoxing, and Hilton Shimao Tianjin - will be completed this year.
The company's tourism property arm has a landbank of 3.63 million square metres in 20 cities. To capitalise on mainland tourism potential, it has set up Shimao Tourism, a company engaged in tourism and leisure and hospitality property industries.
Meanwhile, the group is expanding into leisure property through Shimao International Studio which will set up 15 sites with 100 new cinema screens within three years, and aims to increase its studios to 40 and screens to 300 within five years.
The company abandoned plans to list its mainland hotel operations on the Hong Kong stock exchange in 2009 after the market slumped following the global financial crisis.
Last year, Shimao said turnover from hotel operations amounted to 974 million yuan, representing a year-on-year growth of 52 per cent.
Earnings before interest, tax, depreciation and amortisation was 343 million yuan, a year-on-year rise of 110 per cent.
'Hotel revenue remains small as it only accounted for 4.5 per cent of Shimao's turnover,' said Deng.
Shimao's shares fell 0.38 per cent to close at HK$10.44.