NewChinese developer Evergrande wins approval to list its soccer club on China’s NEEQS

Evergrande Real Estate, China’s biggest developer in terms of area sold, on Friday listed its loss-making football club on the Shenzhen over-the-counter board amid a flurry of fundraising activities to fuel its rapid expansion.

The company’s shares in Hong Kong were little moved, up only 0.5 per cent during the day to HK$6.26, as investors had already priced in the spin-off since the application to the National Equities Exchange and Quotations System, China’s so-called third growth board, was announced in July.

The move means that Guangzhou Evergrande Taobao Football Club, set up in 2010, has become Asia’s first listed football club, according to an Evergrande statement, adding that it aims to become the world’s top 20 within five years and turn profitable next year.

The listing came a week after the team, Guangzhou Evergrande, sealed its fifth straight Chinese Super League title. Last year, China’s e-commerce giant Alibaba paid 1.2 billion yuan (HK$1.46 billion) for half of the country’s most successful football club after a night of drinking between the two billionaire chairmen Jack Ma Yun and Hui Ka-yan.

Hui has ambitions to grow the debt-ridden Evergrande at an annual pace of 30 per cent in coming years, despite dwindling mainland housing demand. He announced the growth goal after reporting debts of 100.8 billion yuan due before June next year.

“Evergrande will continue its high growth at high leverage, while other developers [aim] to compress their borrowing amount,” said Jefferies property analyst Venant Chiang.

Such a strategy has long worried investors in Hong Kong, putting the stock high on the short-selling list, with high transaction volume.