China Vanke, the mainland's biggest listed property developer, will study overseas markets for at least two to three years before making a major investment abroad, company president Yu Liang says.
Yu said places such as the United States and Hong Kong, with large numbers of mainland Chinese immigrants, would be primary choices for the company. But further studies were needed before it drew up detailed plans and a timetable.
Yu made the remarks after the presentation of China Vanke's interim results.
Net profit for the first half of the year was up by a quarter year on year to 3.73 billion yuan (HK$4.56 billion), on revenue that was up by 53 per cent to 28.96 billion yuan.
In May, China Vanke took a "small" step towards offshore expansion when it bought a 74 per cent stake in Hong Kong-listed Winsor Properties for HK$1.08 billion.
Yesterday, it said it planned to sell down about 10.4 per cent of the total issued share capital of Winsor to help the Hong Kong-listed company comply with listing requirements that entailed at least 25 per cent being held by the public.
Wkland Investments, a wholly owned subsidiary of China Vanke, will place 27 million shares in Winsor at a price of about HK$5.62 per share.
"The water is very deep," Yu said. "A small company like Winsor is actually good for us to test the market first. If it is too big, we may drown."
He said Vanke's Hong Kong office would start operations next month, and the company was hiring staff. "We want to hire more local talent to help us expand our business as they have a better understanding of the local market," he said.
By the end of June, the company had 47 billion yuan in cash and cash equivalents. Yu said the amount was "just a fraction compared with overseas property developers".
"Capital is not our advantage; a deep understanding of Chinese customers is," he said. "So we welcome overseas partners as we can co-operate and tap our respective advantages."
He said that 20 years ago, the company sent employees to Hong Kong to learn from Sun Hung Kai Properties, whose work in property management he valued. "We hope that we can have an opportunity to co-operate with Sun Hung Kai Properties, as well as other local property developers," he said.