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Sandy Li

Shimao Property Holdings  is in talks with 10 institutional investors to  offer them stakes  in its hotel arm before  the unit seeks a listing in Hong Kong next year.
'We will sell  10 per cent to 20 per cent stakes [of the hotel arm] to two shortlisted strategic investors,' said chairman Hui Wing-mau, the mainland's third-richest entrepreneur
The remarks come after the firm reported that profit attributable to shareholders rose 79.6 per cent to 4.09 billion yuan (HK$4.56 billion) for the year  to December last year.
The result  beat the consensus forecast of 3.04 billion yuan by analysts in a Thomson Financial poll.
Excluding a 1.15 billion yuan revaluation gain on investment properties, the firm's  underlying profit jumped 61 per cent to 2.9 billion yuan,  boosted by a sharp rise of 1.61 billion yuan from other gains.
These incomes included a 750 million yuan  profit from selling a property in Wuhan to Morgan Stanley, 230 million yuan in foreign currency exchange gains, and an 80 million yuan tax refund.
Last year,  Shimao's other gains amounted to 73.62 million yuan.
Earnings before interest, tax and amortisation  from its 1,728 rooms in three hotels in Shanghai  totalled 168 million yuan, up from a loss of 33 million yuan in 2006.
Jason Hui Sai-tan, the son of Mr Hui, expressed confidence that the hotel arm would comply with  listing rules  that require  a track record of three years of profitability before the spin-off.
In 2011, the company's  hotel portfolio will expand to 19 properties with 3,250 rooms or 1.7 million square metres of gross floor area, the developer said.
Under the development plan, Mr Jason Hui said more than half of the gross floor area was earmarked for serviced apartments  that are scheduled for pre-sale beginning this year.
'So, our model is not only receiving revenue from hotel room rates but also sales revenue of serviced apartments,'  he  said. He put the 19 hotels' valuation  at 30 billion yuan.



Shimao offers stakes to investors before listing hotel unit