Wanda Commercial shares surge 18 per cent after it proposes privatisation

Dalian Wanda Commercial Properties saw its shares jump 18 per cent after it proposed a potential privatisation, only 15 months after listing on the Hong Kong stock exchange.

Analysts said the move reflected Wanda’s determination to relocate to a mainland stock exchange, in the belief that its shares were seriously undervalued in Hong Kong -- a perception that is shared by other Hong Kong-listed developers, who might also be tempted to migrate their listings to Shenzhen or Shanghai.

“Wanda feels the share price completely underestimates the value of the company,” said David Hong, head of research at consultancy China Real Estate Information Corp.

A source from Wanda Group, the parent of Wanda Commercial, said the company is focusing on a return to the mainland share markets as its stock price has languished in Hong Kong.

Wanda Commercial,the property arm of conglomerate Wanda Group, controlled by China’s richest man Wang Jianlin, said it is in the “preliminary phase” of considering a voluntary general offer for the company’s H shares which could result in privatisation.

The price will not be less than HK$48, according to its filing to Hong Kong stock exchange on Wednesday, making the total capital needed at HK$31.3 billion.