Gzitic Hualing Holdings, the loss-making refrigerator and air-conditioner maker controlled by the Guangzhou municipal government, is expected to acquire property projects from its parent in about two months, according to sources. The asset injection will represent the first step majority shareholder Guangzhou International Trust & Investment Corp has taken to diversify and turn around Gzitic Hualing since gaining control of the company in November 1996. Market sources said property projects were selected from a host of the parent's wide-ranging projects as they were the most accessible. The property projects would comprise mainly rental office space in Guangzhou with a rate of return of more than 6 per cent. The assets have been held by the parent for more than three years, making it unnecessary to obtain approval for the purchase from the China Securities Regulatory Commission. The cost of the acquisition had yet to be determined, as it hinged on the final decision on the assets to be bought, a source said. The purchase probably would be financed through the issue of new shares, the source said. Gzitic Hualing is the second listed arm of the Guangzhou municipal government to venture into the property market in the city after Guangzhou Investment. 'There is no reason why Gzitic Hualing could not conduct property business if those projects yield good returns,' the source said. Meanwhile, merchant bankers said rumours were intensifying that mainland authorities were to relax controls over asset injections and listings by red chips. The rumours coincided with a recent visit by officials from the Hong Kong stock exchange to the mainland which reaffirmed the positive role red chips had played in the SAR, a merchant banker said. Another merchant banker dismissed the possibility of a flood of back-door listings by mainland entities following those of Wing Shan International and Hansom Holdings. 'These seem more like special cases,' he said.