Shanghai Zendai Property Ltd, which develops real estate in China, raised US$150 million from its first dollar-denominated bond sale, according to an e-mail statement sent to investors.
The Hong Kong-listed developer priced the five-year fixed-rate notes to yield 10 per cent, or 5.19 percentage points above US Treasuries, the term sheet shows. Merrill Lynch & Co manages the sale.
The bonds are rated five levels below investment grade at B2 by Moody’s Investors Service, and one level higher at B+ by Standard & Poor’s.
Shanghai Zendai’s profit rose 14 per cent to HK$230.5 million (S$45 million) in 2006 as it sold more properties in China. At the end of 2006, it had HK$814 million of bank loans, with HK$351 million due in one year, according to its earnings report.
Property prices in 70 large and medium-size Chinese cities rose 5.3 per cent in February from a year earlier, according to a government survey.
New home prices increased 9.9 per cent in the southern city of Shenzhen and 9.7 per cent in Beijing.
Lai Fung Holdings Ltd, a Hong Kong-based developer of property in China, in March sold US$200 million of seven-year bonds priced to yield 9.125 per cent.
The securities, rated B+ by S&P, now trade at 4.47 percentage points more than US Treasuries, according to Merrill Lynch.
Source: The Business Times, 31 May 2007
Showing posts with label China's most profitable developer. Show all posts
Showing posts with label China's most profitable developer. Show all posts
Friday, June 1, 2007
Friday, April 13, 2007
Magic Middle Kingdom?
Magic Middle Kingdom?
One of the verities about China is that, although it has been occupied, it has never been culturally conquered. Chinese culture has been remarkably stable for millennia -- until now. The developing coastal areas are becoming more westernized as they join the globalized economy. This phenomenon causes critics of globalization to decry its spread; but it is a self-inflicted not a coerced consequence of prosperity. The most intriguing aspect of China's westernization that I've read about is the development of entire communities which assume the characteristics of western neighborhoods. It is like visiting Main Street in Disneyland. Ariana Eunjung Cha, writing in the Washington Post, discusses where these neighborhoods are sprouting ["West Rises In China's Back Yard," 11 April 2007]. Cha writes:
"The ding-dong from the neo-Gothic church next door signals to Wu Yuqing that it's time to wake up. On her way to the grocery store each day, she walks past the Cob Gate Fish & Chip shop and bronze statues of Winston Churchill, Florence Nightingale and William Shakespeare. Tall men decked out in the red uniforms of the Queens Guard nod hello. The place looks a lot like a small town on the Thames River, but Wu's new home is actually in a suburb of Shanghai."
The picture that accompanies the article looks like it came from a London side street. Some pundits insist this latest craze is not un-Chinese in flavor:
"As China's modernization continues to pull hundreds of millions of people from farms to cities and suburbs, a construction boom has given rise to a vast landscape of foreign-looking settlements. These real estate developments are the latest manifestation of the technique that has fueled China's economic boom: making copies."
This Epcot Center-like pursuit is taking off in a big way:
"In Nanjing, there are Balinese retreats and Italian villas. In the southeastern city of Hangzhou, there are Venice and Zurich. In downtown Beijing, everything is about Manhattan, with Soho, Central Park and Park Avenue. 'Many people in China today associate the exotic with wealth. They buy into these developments to differentiate themselves from ordinary people,' said Tino Wan, a manager of ERA Real Estate in Shanghai. Shanghai's plan is among the most ambitious, calling for a ring of satellite developments modeled after different parts of Europe, including German, Czech, Spanish and Scandanavian districts, in addition to the one that looks like London, known as Thames Town. Between now and 2015, about half the world's new construction will take place in China, with as much as 6 billion square feet of space expected to be added each year. All over the country, block-like concrete edifices and empty fields are giving way to flashy architectural developments that promise to give the new middle class a taste of places most of them have never seen."
As you can imagine, not everyone is thrilled about this. Traditionalists believe that such "theme park" developments will undermine Chinese culture.
"Some traditionalists, however, have lamented the trend, blaming it for the destruction of older, Chinese-style homes and attacking it as a form of 'self-colonization.' Yu Renze, 74, a retired government administrator from Shanghai, said she didn't not understand the appeal of the Western-style developments and that she would not allow her family to live in them even if someone gave her a house. 'We're not foreigners,' she said."
Advocates of these developments note that the West has always been willing to assimilate aspects of other cultures (recall the European fascination, during the eighteenth and nineteenth centuries, with fine china graced by Asian floral and landscape patterns). In the same way, residents of these themed developments have been attracted by their "foreignness" as well as the upscale lifestyle they offer. According to Cha, these communities are exceptional in every detail.
"If not for the street signs with Chinese characters in Venice Aquatic City, it would be difficult to place where in the world you were exactly. Gondolas ply canals just below Hu Jun's new apartment. Her view includes porticos with flowers and half-moon bridges. 'St. Mark's Plaza' is a five-minute stroll away. ... James Ho, director of Henghe Real Estate, which developed the downtown area of Thames Town, also talks about efforts to create an escape. Shanghai's Thames Town is not an exact replica of anything in Britain but features a mishmash of hundreds of years of architecture, from Gothic to Tudor. 'At the beginning we were afraid to build such a classic project,' Ho said. 'So we paid a lot of attention to detail.' Some buildings were built and razed and then built again because they did not look authentic enough. Workers took three trips to Britain to learn different roof tiling, stone molding and other techniques. In the end, they were so skilled at old techniques, Ho said, that the team was asked to help work on a new Thames Town-like development -- in Britain."
Cha points out that many residents of these developments fail to appreciate the details (or even the incongruities) of their neighborhoods. They just know it is different and expensive -- which means it must be good. I'll leave to others the debate over whether these developments are culturally good or bad for China. It is patronizing for anyone to presume they know what is best for those who want a better quality of life. When people are prosperous they want to use that prosperity to improve their lives and boost their self-esteem. Buying something "unique" often accomplishes both objectives. The fact that the West is rising in China at the same time a peaceful China is trying to rise in the world is a good sign. It means that occidental things are not being dismissed out of hand and that the East and West can work together -- using common rule sets -- to foster globalization's advance. That said, I believe China's culture will remain as resilient as it has always been. Themed developments will only represent a minute portion of the development that is taking place in China.
One of the verities about China is that, although it has been occupied, it has never been culturally conquered. Chinese culture has been remarkably stable for millennia -- until now. The developing coastal areas are becoming more westernized as they join the globalized economy. This phenomenon causes critics of globalization to decry its spread; but it is a self-inflicted not a coerced consequence of prosperity. The most intriguing aspect of China's westernization that I've read about is the development of entire communities which assume the characteristics of western neighborhoods. It is like visiting Main Street in Disneyland. Ariana Eunjung Cha, writing in the Washington Post, discusses where these neighborhoods are sprouting ["West Rises In China's Back Yard," 11 April 2007]. Cha writes:
"The ding-dong from the neo-Gothic church next door signals to Wu Yuqing that it's time to wake up. On her way to the grocery store each day, she walks past the Cob Gate Fish & Chip shop and bronze statues of Winston Churchill, Florence Nightingale and William Shakespeare. Tall men decked out in the red uniforms of the Queens Guard nod hello. The place looks a lot like a small town on the Thames River, but Wu's new home is actually in a suburb of Shanghai."
The picture that accompanies the article looks like it came from a London side street. Some pundits insist this latest craze is not un-Chinese in flavor:
"As China's modernization continues to pull hundreds of millions of people from farms to cities and suburbs, a construction boom has given rise to a vast landscape of foreign-looking settlements. These real estate developments are the latest manifestation of the technique that has fueled China's economic boom: making copies."
This Epcot Center-like pursuit is taking off in a big way:
"In Nanjing, there are Balinese retreats and Italian villas. In the southeastern city of Hangzhou, there are Venice and Zurich. In downtown Beijing, everything is about Manhattan, with Soho, Central Park and Park Avenue. 'Many people in China today associate the exotic with wealth. They buy into these developments to differentiate themselves from ordinary people,' said Tino Wan, a manager of ERA Real Estate in Shanghai. Shanghai's plan is among the most ambitious, calling for a ring of satellite developments modeled after different parts of Europe, including German, Czech, Spanish and Scandanavian districts, in addition to the one that looks like London, known as Thames Town. Between now and 2015, about half the world's new construction will take place in China, with as much as 6 billion square feet of space expected to be added each year. All over the country, block-like concrete edifices and empty fields are giving way to flashy architectural developments that promise to give the new middle class a taste of places most of them have never seen."
As you can imagine, not everyone is thrilled about this. Traditionalists believe that such "theme park" developments will undermine Chinese culture.
"Some traditionalists, however, have lamented the trend, blaming it for the destruction of older, Chinese-style homes and attacking it as a form of 'self-colonization.' Yu Renze, 74, a retired government administrator from Shanghai, said she didn't not understand the appeal of the Western-style developments and that she would not allow her family to live in them even if someone gave her a house. 'We're not foreigners,' she said."
Advocates of these developments note that the West has always been willing to assimilate aspects of other cultures (recall the European fascination, during the eighteenth and nineteenth centuries, with fine china graced by Asian floral and landscape patterns). In the same way, residents of these themed developments have been attracted by their "foreignness" as well as the upscale lifestyle they offer. According to Cha, these communities are exceptional in every detail.
"If not for the street signs with Chinese characters in Venice Aquatic City, it would be difficult to place where in the world you were exactly. Gondolas ply canals just below Hu Jun's new apartment. Her view includes porticos with flowers and half-moon bridges. 'St. Mark's Plaza' is a five-minute stroll away. ... James Ho, director of Henghe Real Estate, which developed the downtown area of Thames Town, also talks about efforts to create an escape. Shanghai's Thames Town is not an exact replica of anything in Britain but features a mishmash of hundreds of years of architecture, from Gothic to Tudor. 'At the beginning we were afraid to build such a classic project,' Ho said. 'So we paid a lot of attention to detail.' Some buildings were built and razed and then built again because they did not look authentic enough. Workers took three trips to Britain to learn different roof tiling, stone molding and other techniques. In the end, they were so skilled at old techniques, Ho said, that the team was asked to help work on a new Thames Town-like development -- in Britain."
Cha points out that many residents of these developments fail to appreciate the details (or even the incongruities) of their neighborhoods. They just know it is different and expensive -- which means it must be good. I'll leave to others the debate over whether these developments are culturally good or bad for China. It is patronizing for anyone to presume they know what is best for those who want a better quality of life. When people are prosperous they want to use that prosperity to improve their lives and boost their self-esteem. Buying something "unique" often accomplishes both objectives. The fact that the West is rising in China at the same time a peaceful China is trying to rise in the world is a good sign. It means that occidental things are not being dismissed out of hand and that the East and West can work together -- using common rule sets -- to foster globalization's advance. That said, I believe China's culture will remain as resilient as it has always been. Themed developments will only represent a minute portion of the development that is taking place in China.
Country Garden Holdings Co., China's most profitable developer
Country Garden Raises $1.65 Billion in Hong Kong IPO (Update3)
By Bei Hu and John Liu
April 13 (Bloomberg) -- Country Garden Holdings Co., China's most profitable developer, raised HK$12.9 billion ($1.65 billion) in a Hong Kong initial public offering, two people with direct knowledge of the share sale said.
Country Garden sold 2.4 billion shares, equal to a 15 percent stake, at HK$5.38 apiece, said the people who declined to be identified because the details are still private. The sale, at the top end of the range, values Country Garden at about $11 billion in the biggest IPO by a Chinese real estate developer.
The sale underscores investor optimism about China's property market even as the government tries to prevent overheating. Average home prices jumped 12 percent last year in Guangdong, where home sales rose 22 percent annually in the decade through 2005.
``People are really bullish on this company because it has a large land bank, which means the company will have great cash flow and great bottom-line growth,'' said Oscar Choi, a real estate analyst at DBS Vickers Securities Hong Kong Ltd.
Country Garden, based in Foshan in Guangdong province, is raising money to fund projects ranging from apartments to townhouses and villas, as well as to buy more building sites. The province's economy grew 13.8 percent in 2005, compared with 10.4 percent for the nation as a whole.
Morgan Stanley and UBS AG arranged the share sale.
Callis Lau, an external spokeswoman for Country Garden, and Chris Cockerill, a UBS spokesman in Hong Kong, declined to comment. Wayne Fu, a Hong Kong-based spokesman at Morgan Stanley, also declined to comment.
Richest Woman
The sale makes Yang Huiyan, the 25-year-old daughter of company founder and Chairman Yeung Kwok Keung, China's richest woman. Her stake held on behalf of her family is valued at about $6.6 billion, according to Bloomberg News calculations, or almost three times the latest Forbes-estimated wealth of Yan Cheung, chairwoman of manufacturer Nine Dragons Paper (Holdings) Ltd.
Yang, who owned 70 percent of Country Garden before the stock sale, stands to see her ownership diluted to 59.5 percent after the IPO before any sale of extra shares to cover excess demand, the sale document said.
Most Profitable
Five corporate investors bought a combined HK$3.5 billion of shares through the institutional portion of the sale. The investors were controlled by Temasek Holdings Pte., Hong Kong billionaires and developers Lee Shau-kee and Cheng Yu-tung, Citic Pacific Ltd., and the Kuok Group, founded by Robert Kuok, the Malaysian palm-oil-to-hotel billionaire.
Country Garden may post HK$3.9 billion of profit this year, the most for a China developer, Morgan Stanley estimated in a March 16 report obtained from a fund manager. The company was the largest domestic developer by operating income in 2005, according to China's National Bureau of Statistics.
Hong Kong individuals ordered more than 250 times the amount of stock initially reserved for them. A so-called clawback from institutional buyers will double the number of shares offered to them to 480 million, or 20 percent of all initial public offering shares.
International institutions bought the remaining 1.92 billion shares, or 80 percent of the offering.
Land Bank
The company may sell another 360 million shares, or 15 percent of the original size of the offering, to cover the excess demand, lifting the amount raised to HK$14.8 billion.
The IPO values Country Garden at about 21.3 times forecast earnings of 25 Hong Kong cents a share for this year. China Vanke Co., the nation's biggest publicly traded real estate developer, trades at 23.4 times estimated 2007 profit.
Country Garden, which started developing property in 1997, has 27 projects with an average gross floor area close to 900,000 square meters, according to the Morgan Stanley report. About 87 percent of that floor area is in the company's home province of Guangdong, the report said.
China is taking steps to curb property overinvestment as part of a plan to prevent the economy overheating. The government has tightened controls on land use, imposed more property taxes and vowed to more strictly enforce the land appreciation tax. The central bank has also raised interest rates three times in the past year.
Country Garden has about 18 million square meters of land waiting to be developed, which may help boost annual profit 120 percent in 2007 and as much as 70 percent in 2008, Choi of DBS Vickers said.
The stock is scheduled to begin trading on the Hong Kong Stock Exchange on April 20.
By Bei Hu and John Liu
April 13 (Bloomberg) -- Country Garden Holdings Co., China's most profitable developer, raised HK$12.9 billion ($1.65 billion) in a Hong Kong initial public offering, two people with direct knowledge of the share sale said.
Country Garden sold 2.4 billion shares, equal to a 15 percent stake, at HK$5.38 apiece, said the people who declined to be identified because the details are still private. The sale, at the top end of the range, values Country Garden at about $11 billion in the biggest IPO by a Chinese real estate developer.
The sale underscores investor optimism about China's property market even as the government tries to prevent overheating. Average home prices jumped 12 percent last year in Guangdong, where home sales rose 22 percent annually in the decade through 2005.
``People are really bullish on this company because it has a large land bank, which means the company will have great cash flow and great bottom-line growth,'' said Oscar Choi, a real estate analyst at DBS Vickers Securities Hong Kong Ltd.
Country Garden, based in Foshan in Guangdong province, is raising money to fund projects ranging from apartments to townhouses and villas, as well as to buy more building sites. The province's economy grew 13.8 percent in 2005, compared with 10.4 percent for the nation as a whole.
Morgan Stanley and UBS AG arranged the share sale.
Callis Lau, an external spokeswoman for Country Garden, and Chris Cockerill, a UBS spokesman in Hong Kong, declined to comment. Wayne Fu, a Hong Kong-based spokesman at Morgan Stanley, also declined to comment.
Richest Woman
The sale makes Yang Huiyan, the 25-year-old daughter of company founder and Chairman Yeung Kwok Keung, China's richest woman. Her stake held on behalf of her family is valued at about $6.6 billion, according to Bloomberg News calculations, or almost three times the latest Forbes-estimated wealth of Yan Cheung, chairwoman of manufacturer Nine Dragons Paper (Holdings) Ltd.
Yang, who owned 70 percent of Country Garden before the stock sale, stands to see her ownership diluted to 59.5 percent after the IPO before any sale of extra shares to cover excess demand, the sale document said.
Most Profitable
Five corporate investors bought a combined HK$3.5 billion of shares through the institutional portion of the sale. The investors were controlled by Temasek Holdings Pte., Hong Kong billionaires and developers Lee Shau-kee and Cheng Yu-tung, Citic Pacific Ltd., and the Kuok Group, founded by Robert Kuok, the Malaysian palm-oil-to-hotel billionaire.
Country Garden may post HK$3.9 billion of profit this year, the most for a China developer, Morgan Stanley estimated in a March 16 report obtained from a fund manager. The company was the largest domestic developer by operating income in 2005, according to China's National Bureau of Statistics.
Hong Kong individuals ordered more than 250 times the amount of stock initially reserved for them. A so-called clawback from institutional buyers will double the number of shares offered to them to 480 million, or 20 percent of all initial public offering shares.
International institutions bought the remaining 1.92 billion shares, or 80 percent of the offering.
Land Bank
The company may sell another 360 million shares, or 15 percent of the original size of the offering, to cover the excess demand, lifting the amount raised to HK$14.8 billion.
The IPO values Country Garden at about 21.3 times forecast earnings of 25 Hong Kong cents a share for this year. China Vanke Co., the nation's biggest publicly traded real estate developer, trades at 23.4 times estimated 2007 profit.
Country Garden, which started developing property in 1997, has 27 projects with an average gross floor area close to 900,000 square meters, according to the Morgan Stanley report. About 87 percent of that floor area is in the company's home province of Guangdong, the report said.
China is taking steps to curb property overinvestment as part of a plan to prevent the economy overheating. The government has tightened controls on land use, imposed more property taxes and vowed to more strictly enforce the land appreciation tax. The central bank has also raised interest rates three times in the past year.
Country Garden has about 18 million square meters of land waiting to be developed, which may help boost annual profit 120 percent in 2007 and as much as 70 percent in 2008, Choi of DBS Vickers said.
The stock is scheduled to begin trading on the Hong Kong Stock Exchange on April 20.
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