Chinese developers' Hong Kong back-door listing units fall out of favour

Once stock market darlings, Hong Kong firms used as back-door listing vehicles by the mainland's property developers have lost their charm for investors, with most of the counters plunging from the time when news of the acquisition was announced.

Hopes for large-scale asset injections dimmed after some big players sought their own listing status on the Hong Kong stock exchange.

"Back-door listing is their Plan B to set up a financial platform in preparation for future fundraising," said Bocom International analyst Alfred Lau. "Plan A is floating itself on the Hong Kong stock market. When Plan A proceeds well, there is no Plan B. Investors' dreams of seeing big asset injections should end."

Dalian Wanda Group, controlled by mainland billionaire Wang Jianlin, is seeking to raise up to US$6 billion in a Hong Kong share float of its property arm. Analysts said investors had raised concerns over the role of its back-door listing vehicle, Wanda Commercial Properties (Group), following the listing.

In April last year, the group bought Hengli Commercial Properties for HK$465.5 million and later changed its name to Wanda Commercial Properties.

Shares in Hengli, which were suspended from trading on February 25 last year, soared 465.22 per cent to HK$1.95 on the day the news was announced. They then hit a high of HK$4.66 on June 18, 2013.

On Friday, the stock shed 1.9 per cent to finish at HK$1.54.