While winning 86.3 billion of the war investment to continue to hold shares, while spinning off the property subsidiary listed, Xu Jiayin's two big moves in one fell swoop to repel the recent market doubts about Evergrande.
Evergrande Property Services submitted a listing application to the Stock Exchange for the listing and trading of his shares on the main board of the Stock Exchange on September 29, and plans to conduct a global offering of shares upon approval of the listing. So far, Evergrande Property Services has beenChina Evergrande GroupIndirectly hold 71.94% interest, Evergrande Property Services is still its subsidiary after the completion of the listing.
China Evergrande Group said that the separate listing of Evergrande Property Services can improve the efficiency of its operation and financial management by providing funds for its existing business and future expansion without relying on the company. As of the first half of the year, Evergrande Property Services has provided services for 1354 projects, with a total management area of about 254 million square meters. There is no doubt that Evergrande Property Services's spin-off listing will further reduce Evergrande's debt level.
Affected by a number of positive factors, China Evergrande Group opened sharply higher in early trading, and then the increase continued to expand. At one point, it soared 18% in intraday trading. As of the release of the brokerage in China, China Evergrande Group rose more than 14%.China Evergrande New Energy VehicleThe increase is also more than 3%.
It is worth noting that on August 13, not long ago, China Evergrande Group also announced the financing of Evergrande Property Services's Pre-IPO round: 14 strategic investors, including Huatai International, Red shirt, CITIC Capital, Yunfeng, Tencent, and so on, invested a total of 23.5 billion Hong Kong dollars.
Chen Kaiyun, Hong Kong's richest woman, also appeared on the list as the only individual investor, taking a HK $4.5 billion bid for a 5.37 per cent stake in Evergrande Property Services. And her husband is Hong Kong, which has been friends with Xu Jiayin for many years.Chinese home ownershipFounder Joseph Lau.
Evergrande Property Services plans to be spun off and listed
On September 25, China Evergrande Group received approval from the Stock Exchange for the proposed spin-off and planned to spin off its subsidiary Evergrande Property Services to be listed independently on the main board of the Stock Exchange.
Evergrande Property Services mainly provides property management services and related value-added services in China. At present, China Evergrande Group indirectly holds 71.94%. Evergrande Property Services is expected to remain a subsidiary of China Evergrande Group after listing.
Evergrande Property Services is one of the largest and fastest-growing operators of integrated property management services in China, with net profit rising at a compound annual growth rate of 195.5 per cent from 2017 to 2019, according to listing applications disclosed on the evening of September 29th.
As of the first half of the year, Evergrande Property Services has provided property management services, non-owner value-added services and / or community value-added services for 1354 projects, covering more than 280cities, with a total management area of about 254.0 million square meters and a contracted area of about 513.3 million square meters. serving nearly two million families.
From the perspective of the three main business income, property management services are still Evergrande Property Services's core source of income. As of the first half of the year, the income from property management services was HK $2.824 billion, accounting for 61.9%, followed by non-owner value-added services income of HK $1.231 billion, accounting for 27%, and community value-added services HK $508 million, accounting for 11.1%.
However, it is worth noting that at present, Evergrande Property Services's main source of business is still properties developed by Evergrande Group, accounting for 98.8% of the income by the end of June, while the sources of income provided by properties from associated enterprises and independent third parties are only 0.7% and 0.5%, respectively, indicating Evergrande Property Services's great dependence on the group's resources.
Pre-IPO has just raised HK $23.5 billion
Evergrande Property Services's listing was jointly sponsored by five investment banks, namely Huatai International, UBS UBS, Agricultural Bank of China International, CCB International, CITIC Lyon and Citic Lyon.Haitong International。
It is worth mentioning that the affiliated enterprises of Huatai International, Agricultural Bank of China International and CITIC Capital also participated in Evergrande Property Services's Pre-IPO round financing in August. Of this total, Huatai International Greater Bay area Investment Co., Ltd. contributed HK $4 billion, ranking first among institutional investors; CCEagleInvestmentsLimited, associated with CITIC Capital Holdings Limited, contributed HK $3 billion; and the portfolio managed by Agricultural Bank of China International Asset Management Co., Ltd. contributed HK $1 billion.
At the same time, Sequoia Capital's SCCGrowthVI2020B,L.P. Contributed HK $3.45 billion; BABA's Yunfeng Fund subscribed for HK $1.5 billion.TencentSubscribe for HK $1.2 billion; AdvancePowerInternationalLimited controlled by President China Evergrande Group Xia Haijun subscribe for HK $550 millionChow Tai Fook JewelleryFounder Zheng Jiachun family subscribed for HK $500 million and so on.
Evergrande Property Services said that the company has brought in a group of reputable strategic investors, including Sequoia Capital, CITIC Capital, Yunfeng Fund and Tencent, and bought a total of 28.061 per cent of the company. It is believed that the company will continue to explore new business synergy and other cooperation with major investors, expand the depth and breadth of its business, and support the company's long-term sustainable development.
In addition, Evergrande Property Services's Pre-IPO round of financing was led by an individual investor! According to public information, Chen Kaiyun contributed a total of HK $4.5 billion to subscribe for a 5.37 per cent stake in Evergrande Property Services, making her the only individual investor in the financing. Her husband is Joseph Lau, founder of Hong Kong Chinese real estate, who has been friends with Xu Jiayin for many years.
In fact, long before the purchase of Evergrande Property Services, the Liu Luanxiong family owned more than 5 per cent of China Evergrande Group and actively invested in Evergrande Group stocks and bonds. For BABA and Tencent, who are also involved in the subscription, Jack Ma bought a stake in Guangzhou Evergrande Football Club owned by Xu Jiayin in 2014, and Tencent also established a partnership with Evergrande.Hengteng network。
Vigorous and vigorous layout of inter-industry acquisitions
According to the introduction of HK $23.5 billion to buy a total of 28.061 per cent of Evergrande Property Services's equity, Evergrande Property Services was valued at HK $83.746 billion as of the Pre-IPO financing period. Taking into account the valuation growth brought about by the issuance of new shares, the total amount of capital raised by Evergrande Property Services is expected to be considerable.
How should I spend so much money? Although the specific plans for the use of funds have not yet been disclosed, Evergrande Property Services still listed five major funds for reference.
First of all, strategic acquisitions and investments, including acquisitions and investments in other property management companies, as well as companies providing property management related services.
Evergrande Property Services revealed that since the establishment of an external business development team in June 2020, the company has launched a series of acquisitions.
As of the latest practicable date, agreements have been entered into to acquire five regional property management companies with a total managed area of 7.72 million square metres, all developed by independent third-party property developers, and the acquisition is expected to be completed in October.
As the proposed acquisition mainly provides property management services to properties developed by independent third-party property developers, Evergrande Property Services believes that the acquisition is expected to help further expand its property management service portfolio and broaden its customer base, especially independent third-party property developers.
The second is to focus on the development of value-added services, including the acquisition and investment of companies that complement their community value-added services, and to further develop existing value-added services.
At the same time, Evergrande Property Services also plans to purchase and upgrade software and smart hardware to improve smart community solutions; upgrade and maintain existing mobile applications, intelligent community management systems and other internal information systems; upgrade and optimize equipment and facilities in the managed community.
In addition, recruitment and training, as well as supplementary working capital will also be Evergrande Property Services's investment direction after listing.
Source: Securities firm China (ID:quanshangcn)