Wanda Commercial soars on plans to take the company private

Shares of Dalian Wanda Commercial Properties Co Ltd soared more than 18 percent on the Hong Kong Stock Exchange on Thursday after its parent Dalian Wanda Group said it was considering taking the company private just 16 months after listing.


The stock surged 18.43 percent to close at HK$45.95 ($5.93). Meanwhile, the benchmark Hang Seng Index edged down 0.13 percent, or 26.69 points, to close at 20,776.70.


Dalian Wanda, established by billionaire Wang Jianlin, said in a statement on Wednesday it was looking into buying all of its shares back for HK$48 a share, the offering price it listed, marking a 24 percent premium to its Wednesday close.


Analysts, however, were unsure of the motive.


Du Jinsong, an analyst at Credit Suisse Group, said the move may indicate that Wanda believes the A-share market is sufficient to feed its funding demand. As the company is more likely to acquire higher valuation among A-share investors, listing on the mainland may have become a preferred choice.


Du added overseas equity and debt capital markets are less and less attractive to mainland companies because the swift development of onshore bond market as well as the increasing volatility of the yuan exchange rate.


Yet, he doesn't expect many developers to follow suit.


But other analysts said the developer may actually aim at saving its share price rather than delisting in Hong Kong.


"Domestic money is cheap now, but the Hong Kong stock market is still an important channel of overseas funding. There is no need to shut it in a rush," said Philip Tse, analyst from BOCOM International Holdings Ltd. "Duel listing is perfectly acceptable, if Wanda wants an A-share IPO as well."


The article transsshipment from China Daily