China’s biggest developer Greenland Group to make back-door listing

Shanghai Jinfeng Investment shares opened up by the daily limit of 10 per cent in Shanghai on Friday and remained there for the rest of the day after regulatory approval for it be a back-door listing vehicle for China’s biggest developer, Greenland Group.

State-owned Greenland will inject assets worth 65.5 billion yuan into Jinfeng in exchange for 11.3 billion new shares of the Shanghai-listed firm at 5.58 yuan per share. That will make it the biggest Chinese developer listed anywhere in terms of market capitalisation, overtaking Dalian Wanda Commercial Properties, which listed in Hong Kong last year.

The regulatory approval “marks a key step in the public listing of Greenland Group as a whole”, said analysts Zhu Yiming and Fu Yichen at property consultancy China Real Estate Information in Shanghai.

Global ratings agency Standard & Poor’s viewed the listing as credit neutral to Greenland, saying it expected the developer’s leverage to remain high over the next one to two years and the transaction would not bring in any new cash.

Jinfeng shares, suspended since April 16, resumed trading on Friday and surged to 26.64 yuan, up from the previous close of 24.22 yuan. Marking the new shares to its current price, total capitalisation will hit 315 billion yuan, far exceeding rivals such as Dalian Wanda and China Vanke.