All ‘A’ eyes are on Wanda realty arm before re-listing

Expected listing of Dalian Wanda Commercial Properties Co on the Shanghai Stock Exchange’s A-share market, after it delists from the Hong Kong bourse, will likely see mainland investors chasing its shares, experts said.

Earlier this month, Chinese billionaire Wang Jianlin, the largest shareholder in Dalian Wanda Commercial Properties, won shareholders’ approval to buy out the Wanda group’s real estate arm for HK$34.5 billion ($4.4 billion), which would make it the biggestever delisting in Hong Kong.

“Mainland investors, including existing A-share companiesthat arepart-funding the Hong Kong delisting and potential shell firms that the Wanda group company may need if it decides to have a backdoor listing, will eye shares in DalianWanda Commercial Properties,” said Ma Wenya, general manager of Sunday Fund Co Ltd, which manages assets worth 300 million yuan.

Dalian Wanda Commercial Properties said in its filings with the Hong Kong exchange that mainland’s A-share companies Royal Group Co Ltd, Heilongjiang Interchina Watertreatment Co Ltd, Macrolink Culturaltainment Development Co Ltd and Ningbo Shanshan Co Ltd are part-funding its delisting.

Shares in Royal Group Co Ltdrose to 21yuanonWednesday, up47 percentfromAug15, when DalianWandaCommercial Properties released shareholders’ vote result on the delisting deal.

In the same period, Heilongjiang Interchina Watertreatment Co Ltd surged 40 percent to 6.46 yuan.

Wang Jianlin told Reuters

“Mainland investors will eye (its) shares... in case it decides to (go in for) a backdoor listing.” general manager of Sunday Fund Co Ltd.

MaWenya, that DalianWanda Commercial Properties would list on the Shanghai Stock Exchange through either an initial public offering or a backdoor listing.

Approval for an IPO could take two or three years, while a backdoor listing would require more than a year.

By Aug 18, 850 companies were awaiting approval of their IPO applications. Only 107 of them had completed all examinations and received approvals, according to the China Securities Regulatory Commission.

DalianWandaCommercial Properties is one of the other 743 companies that are yet to get through all the examination and approval processes.

LiuJipeng, deanof theCapital Finance Institute, which is under the aegis of theChina University of Political Science and Law, said the delisting of Dalian Wanda Commercial Properties is reasonable because its valuation is low in theHongKong market.

Fresh listing on the A-share market can unlock the stock’s value and benefit investors, he said.

Typically, mainland-listed firms command higher valuations than those traded in Hong Kong, helped by a large pool of retail investors.