Greentown Management will list on the Hong Kong bourse with a market capitalisation of HKD 4.78 billion (USD 616.75 million) on 10th July after pricing its initial public offering (IPO) at HKD 2.50 apiece.
The Cayman Islands-incorporated real estate project management company is raising HKD 1.19 billion through the sale of 477.56 million shares, representing a 25.0 per cent post-issue capital.
It has provided underwriters, including Credit Suisse, Deutsche Bank and BNP Paribas, with an overallotment option for a further 47.76 million stocks.
Founded in 2010, Greentown claims to be the largest project management company in China’s real estate market in terms of accumulated contracted gross floor area (GFA) from 2017 to 2019, and total revenue in 2019.
In particular, in 2019, the company had 72 newly contracted developments with GFA of 16.0 million square metres.
The group held 23.7 per cent in the country’s real estate project management market, which is more than double the size of the second-largest player, according to data cited in the prospectus.
As of 31st December 2019, Greentown had 260 schemes located in 85 cities across 26 provinces, municipalities and autonomous regions in China and one city in Cambodia.
The company generated revenue of CNY 1.99 billion (USD 283.76 million) in the 12 months ended 31st December 2019 (FY 2018: CNY 1.48 billion; FY 2017: CNY 1.02 billion).
It booked net profit of CNY 370.72 million in FY 2019 (FY 2018: CNY 364.95 million; FY 2017: CNY 262.58 million).
Greentown had a liquidity ratio of 1.2x and a return on equity of 26.7 per cent, as at 31st December 2019.
Proceeds will be used to scale up its business through organic growth and strategic acquisitions along the downstream value chain, such as design institutes and occupational training centres.
Money raised will also go towards repaying debt, working capital, marketing and other general corporate activities.
© Zephus Ltd