Chinese Property Portal SouFun Seeks Backdoor Mainland Listing
May 3, 2016 — 8:12 PM PDT
SouFun Holdings Ltd. plans to switch its stock listing from the U.S. to China, joining companies including Dalian Wanda Commercial Properties Co. that are seeking higher valuations on mainland stock exchanges.
SouFun, China’s biggest real estate web portal, is seeking to move its shares to the Shanghai stock exchange via a backdoor listing by acquiring a majority stake in storage-battery manufacturer Chongqing Wanli New Energy Co. Wanli will raise 3 billion yuan ($462 million) through private placements to purchase SouFun assets, Wanli said in a stock filing on Tuesday. The plan is pending regulatory approval.
Shares of Wanli surged by the 10 percent daily limit to 36.40 yuan as of 10:25 a.m., after they resumed trading in Shanghai on Wednesday. They had been suspended since August.
SouFun is among a growing number of Chinese firms, notably developers, seeking higher valuations by moving their listing from New York or Hong Kong to mainland exchanges. Billionaire Wang Jianlin-controlled Wanda Commercial is asking investors to back an effort to take his Hong Kong-traded property company private and re-list it in China, according to a document obtained by Bloomberg News. Evergrande Real Estate Group Ltd. agreed to acquire a stake in a Shenzhen-listed entity, an acquisition that could signal Chairman Hui Ka Yan is also considering a similar move.
SouFun’s valuation would be 40 times its expected 800 million yuan profit in 2016 based on Wanli’s share price before the stock was suspended, China Securities Co. analysts led by Shanghai-based Chen Shen wrote in a note Wednesday. SouFun’s U.S.-listed shares trade at 11.9 times 2015 earnings, data compiled by Bloomberg show.
