Mainland firms lead pack for 2013 debuts

A mainland property developer and an apparel retailer will be the first two companies to debut on the Hong Kong stock exchange in 2013, aiming to raise up to HK$1.01 billion in total.

Golden Wheel Tiandi, a Nanjing-based real estate developer founded in 1994, is set to raise as much as HK$890 million in an initial public offering that starts today. It plans to offer an aggregate of 450 million shares at between HK$1.38 and HK$1.72 each.

With a focus on commercial and retail projects linked to metro stations or transport hubs, the developer had a land bank of about 290,000 square metres, Golden Wheel executive director Kenny Chan Wai-kin said. Four shopping malls, including one to be completed next year, accounted for about 90,000 sqm of the bank. The remainder was still under construction, including commercial properties and some residential projects.

"We believe that the continuing development of metro systems in second and third-tier cities will create significant opportunities for developing and investing in metro-linked commercial properties, like lifestyle shopping malls," chief executive Kenny Wong Kam-fai said.

Half of the HK$639.7 million net proceeds from the initial share sale would be used to buy land for new projects and fund construction, the company said in its prospectus. Another 40 per cent would be budgeted for four projects now under development.

But Golden Wheel said it might have to pay a fine of up to 22.4 million yuan (HK$27.49 million) or forfeit part of its land for failing to fully comply with laws in respect of certain projects. For example, the company was late in finishing its Nanjing Jade Garden and Golden Wheel Star Plaza projects. But its management said yesterday that it was confident the relevant projects would be completed in time.