Hong Kong-listed China Overseas Land & Investment is considering restructuring its mainland property business by forming a Sino-foreign joint-stock company with its ultimate parent, China State Construction Engineering. Under the proposal, China Overseas Land and China State Construction would each inject property assets into the new company. But an announcement yesterday said no definite plan had been made regarding the size of the joint company or the type of property assets to be injected. Analysts believed the move was part of China State Construction's A-share listing plans in the mainland. China Overseas Land chairman Sun Wenjie spoke of the listing intention in April. Early this year, Mr Sun was appointed by Beijing as president of the State Council-controlled China State Construction, widely considered a key move in preparation for the restructuring and listing. China State Construction owns about 57 per cent of China Overseas Land. However, some analysts said the proposed restructuring plan would prove negative for China Overseas Land. Merrill Lynch said in a note to clients yesterday that the better quality China property assets in China Overseas Land could be transferred to the new joint company, making China Overseas Land a less direct play on the mainland's property market. China Overseas Land's earnings in the past two years were mainly derived from its strong property sales in the mainland. It has a land bank of about 28 million square feet, most of which is in Shenzhen, Shanghai, Guangzhou, Beijing and Chengdu. The company said earlier it would be increasingly cautious in making further property investments in Hong Kong due to the difficult market conditions. China Overseas Land has played a less-active role in the local property market following the Asian financial crisis in 1997. It has made provisions over the past few years for expensive land acquired during the market peak, including two luxury residential lots in Stanley and Ho Man Tin and one in Tuen Mun. It is not known whether its SAR land reserve would be injected into the proposed joint company.