China Appliance King Said to Eye IPO of $12 Billion Property Arm

Updated on
  • Midea founder plans Hong Kong listing for real-estate business
  • Offering could take place as early as second half of 2018

Chinese billionaire He Xiangjian, who founded the world’s largest appliance maker Midea Group Co., is planning an initial public offering of his real estate business, according to people with knowledge of the matter.

Guangdong Midea Property Co. has been speaking with investment banks about a potential Hong Kong share sale that could take place in 2018, the people said. The Chinese developer had about 77.6 billion yuan ($12 billion) of assets at the end of June, according to its interim report.

Deliberations are at an early stage, and Midea Property hasn’t decided on an exact fundraising size or the valuation it will seek in the IPO, the people said, asking not to be identified because the information is private.

Chinese real estate companies listed in Hong Kong have risen an average 60 percent this year, outpacing the 30 percent rise in the city’s benchmark Hang Seng Index. That rally led to $1.5 billion of follow-on stock offerings from the mainland property industry this year, according to data compiled by Bloomberg.

Biggest Stake

An official at Midea Property said he has no clarity on the topic. An email sent to a general inquiry address listed on Midea Property’s website wasn’t immediately replied.

Midea Group founder He and his daughter-in-law, Lu Deyan, own a combined 100 percent of Midea Property, the developer’s interim report shows. He is China’s 10th-richest person with a net worth of $14.5 billion, according to Bloomberg Billionaires Index.

The appliance tycoon’s family is the biggest shareholder of Shenzhen-listed Midea Group with a 33.9 percent stake, data compiled by Bloomberg show. Midea Group shares have risen 79 percent this year, giving the company a market value of about $50 billion.

Midea Property owns 103 projects including residential developments, malls and golf courses spread across 10 provinces and 30 cities in China, according to the company’s website. Its net income surged more than eightfold to 695 million yuan in the first half of this year, while operating revenue more than quadrupled to 5.8 billion yuan.

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