Record number of Chinese property management companies expected to flock to Hong Kong for IPOs this year
- Segment is countercyclical compared with other industries, especially in economic downturns and shocks such as the pandemic, industry insiders and experts say
- The average stock price of 27 property management companies listed in Hong Kong has gained 53.7 per cent since the start of this year
When Shanghai-based property management company Ever Sunshine Lifestyle Services Group was listing in Hong Kong in December 2018, it was unsure about an initial public offering (IPO) in the special administrative region.
“When Ever Sunshine was planning to go public, the capital market had limited knowledge of the property management segment. So its management was hesitant. The company finally decided to list in Hong Kong after considering the opportunities ahead,” Gerry Xie, CRIC Securities’ chief executive in Hong Kong, whose team helped Ever Sunshine with its IPO, said.
As of Thursday, Ever Sunshine’s stock price had risen sevenfold.
More such companies are expected to go public in Hong Kong this year, even hit a record high, as the coronavirus has revealed the importance of property management.
“The Covid-19 outbreak has increased concern about public health in China, which has led to an increase in demand for hygiene-related services,” said Kevin Chan, senior director of valuation advisory services at JLL, the professional services firm that specialises in real estate and investment management. “At the same time, property managers are offering more value-added services to residents who are now spending more time in their properties.”
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Investor sentiment around the segment is positive because it remains an underdeveloped market. It is also countercyclical compared with other industries, especially in economic downturns and shocks such as the pandemic, according to industry insiders and experts.