Chinese shopping mall developer Dalian Wanda Commercial Properties makes its debut in Hong Kong on Tuesday in what will be Asia's biggest initial public offering (IPO) this year, but market sentiment is far from strong, according to experts.
The property arm of Chinese billionaire Wang Jianlin's Dalian Wanda Group, Wanda Commercial Properties, raised $3.7 billion last week after selling 600 million shares at $6.19 each, the higher end of its price range.
The flotation is expected to see Wang regain his title as China's richest man, a position he held in 2013 before being overtaken by Alibaba founder Jack Ma this year. Wang, who owns 98 percent of the Wanda Group, is currently ranked China's fourth-richest man, according to Forbes.
"It's not going to have a blockbuster debut. They will manage to have a flat opening because of the size and valuation. They valued themselves at single-digit PEs [price-to-earnings ratios], cheaper than other property stocks in Hong Kong," said Jackson Wong, associate director at United Simsen Securities.
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The IPO values the firm at 8.6 times 2015 earnings forecasts, higher than major mainland property players China Resources Land and China Vanke, according to Reuters. The Beijing-based firm has China's largest commercial property portfolio, with 159 Wanda Plaza shopping centers and 6 Wanda City projects spread out across the country.
"Property stocks are not hot in Hong Kong right now, so I don't expect a huge opening but it will be better than what most people think. Recent IPOs have had a 10-20 percent drop from their debut price, so this could perform just ok tomorrow," Wong added.