With the listing of HGC, the local conglomerate has found trading through the tradesman's entrance a beneficial move Generations ago, the back door was reserved for servants and tradesmen, today it might be the choice of a celebrity trying to slip away unnoticed. Or could it just be the quickest way in or out at the time? The latter is the explanation given for Hutchison's back-door listing of its flagship telecommunications company Hutchison Global Communications (HGC) into its associate company, Vanda Systems & Communications Holdings. But, as Hong Kong's second-largest fixed-line operator, and one with global aspirations, it might seem surprising that this asset does not enter the Hong Kong stock exchange through the front door. While a listing can be time-consuming, investment bankers will happily perform the more tedious duties and the new-issues market has hardly ever seen it so good. But, perhaps, not so good for operators of what is essentially a fixed-line network in an over-wired Hong Kong. Various valuations for this business have circulated in the market but investors would have found a more sobering reality if they took a glance at No1 fixed-line play PCCW. It was the worst-performing blue chip again last year and its market capitalisation is now a mere HK$29 billion. In the future, data services may take-off and HGC has an impressive internet protocol-based network. But, for now, it is competing in a crowded market dominated by a seemingly perpetual fall in voice rates. And fund managers who want this kind of exposure will be tempted to keep their powder dry for soon-to-be-listed China Network Communications Group (CNC Group), a far sexier Chinese growth story. But Hutchison's primary reason for listing is not to raise funds but rather the need to find some profits to staunch the red ink flowing from its start-up third-generation operations in Europe. Hutchison, we are told, has once again been able to realise hidden value from its investments. The sizeable figure of a one-off US$500 million gain has been mentioned by sources close to the deal. This might seem less surprising if HGC were profitable but we are talking about exceptional gains, which generally accrue when you sell an asset for more than it cost, or the cost that it is carried in its books. Keeping track of book value is a tricky business, especially when you generate as many transactions and write-backs as Hutchison. We know that Hutchison has spent HK$10 billion in building its fixed-line network in Hong Kong but, going back to 2000, Hutchison sold a 50 per cent stake in this business to Global Crossing for US$400 million. Two years later, it bought back its stake in what was then Asia Global Crossing for US$120 million. In Hutchison's last interim results, a write-off appeared for its HK$3.1 billion worth of shares still held in Global Crossing. There was also an additional $225 million for losses relating to international bandwidth capacity. Without doing too many calculations, it is easy to see that Hutchison has substantially cut the value of assets on its books. And this makes generating an exceptional gain all the easier. These figures might reflect accounting profits, rather than any substantial improvement in the business - passing an asset from one hand to the other - but they will no doubt aid next year's results. On closer inspection, the back door may sometimes be a better entrance.