HONG KONG (AFP) – Chinese shopping mall developer Dalian Wanda made its trading debut in Hong Kong Tuesday after raising $3.7 billion in an initial public offering that broke records despite concerns about China’s cooling property market.
But shares in the Beijing-based company were down at HK$44.65 ($5.76) by the afternoon, almost seven per cent less than its HK$48 offering price, following the biggest IPO in the world by a real estate firm.
Owned by the property arm of Dalian Wanda Group and controlled by Chinese billionaire Wang Jianlin, the company is one of the world’s largest developers of shopping malls, owning dozens across China.
“Today is a historic day for Wanda and also an important milestone for the business development of Wanda,” said Wang before striking the gong at the Hong Kong exchange to mark the listing.
Wang raised a glass of champagne with bourse officials and gave a double thumbs up before trading began.
The listing comes after China cut interest rates in November to spur the mainland property market, which remains under pressure from a hefty inventory of unsold newly-built homes.
House prices fell on a monthly basis for the seventh straight month in November, according to the independent China Index Academy.
Wanda slashed its IPO fundraising target by about a third from the original goal, possibly to attract investors concerned by the slowing real estate market.
Analysts also pointed to the company’s high debt levels.
Dalian Wanda Commercial Properties says it is the second-largest commercial property owner and operator in the world, with 175 property projects across China, including 71 Wanda Plazas, each made up of a combination of shopping centres, luxury hotels, and office and residential towers, according to the bourse filing.
Wang topped the Forbes China Rich List in 2013 with an estimated net worth of $14.1 billion, but was displaced this year after charismatic Internet entrepreneur Jack Ma floated his e-commerce powerhouse Alibaba Group in the world’s biggest ever IPO. Ma’s fortune is now estimated at nearly $20 billion. Wang may find himself on top again after the Dalian Wanda listing.
“To be on the rich list is not my goal, my goal is to have my company become diversified and comprehensive,” Wang told reporters Tuesday.