Shimao due for hearing in second IPO attempt

Shimao Property Holdings, a mainland property developer controlled by Shimao International chairman Hui Wing-mau, is scheduled for a hearing at the listing committee this week in a second attempt to float US$400 million worth of shares in the Hong Kong stock market, according to sources.

Shimao Property's first attempt in March last year failed after the listing committee questioned possible conflicts of interest between the company and Shimao International, which also had mainland property development at that time.

Shimao Property hired Goldman Sachs as the share sale's arranger in its first attempt, in which it planned to raise US$250 million, and added Morgan Stanley as another bookrunner in the second try.

Sources said the conflicts had been resolved after Shimao International separated its business from that of Shimao Property by focusing on the international markets. Shimao Property would focus purely on the mainland.

If the company won the go-ahead from the stock exchange, it would start preliminary marketing for the listing next week and kick off the retail offering in the middle of next month, sources said.

Shanghai's property market, where one-third of Shimao Property's projects are located, has been hit by the government's austerity measures. Prices for all types of real estate in the city rose 9.7 per cent year on year last year, slowing from a 15.9 per cent gain in 2004, the Shanghai Statistical Bureau said.

The market is now speculating another round of austerity measures may further curb prices in core cities such as Beijing and Shanghai, which may affect Shimao Property's offering.

However, the buoyant sentiment towards listings and the strong rally of recently listed mainland developers might help offset part of that impact, sources said.

Shares of Guangzhou R&F Properties have tripled since its listing in July last year. The stock closed at $44.50 yesterday, down 8.99 per cent from its record high of $48.90 on May 9.

Agile Property's shares ended at $5.65 yesterday, down 18.11 per cent from a high of $6.90 on April 6. Still, the stock is 71.21 per cent above its offer price of $3.30 when it went public in December last year.

Shimao Property has 11 residential projects in Shanghai, Beijing, Nanjing, Fuzhou, Harbin, Kunshan, Changshu and Wuhan, with a planned gross floor area of 10.14 million square metres scheduled to be completed by 2010.