UPDATE 1-China developer Changjia plans up to $600 mln HK IPO

* Changjia focused on high-end Shanghai properties

* Company targets Hong Kong listing in March

* UBS, Citi hired to jointly handle IPO
(Adds quotes, details and background)

By George Chen and Kennix Chim

HONG KONG, Jan 26 (BestGrowthStock) – Changjia Group, a Chinese
developer focused on high-end residential projects in Shanghai,
plans to raise between $500 million and $600 million from a Hong
Kong listing in March, sources familiar with the matter.

Shanghai-headquartered Changjia had hired Swiss bank UBS
(UBSN.VX: )(UBS.N: ) and U.S. bank Citigroup (C.N: ) to jointly handle
its initial public offering of shares, the sources said on
Tuesday.

Changjia was expected to have an IPO hearing in Hong Kong
shortly after the Lunar New Year holiday, which starts on Feb.
14, said one of the sources. If Changjia gets approval, it would
go public in the former British colony no later than the end of
March, the source added.

“Timing is really important. Changjia definitely hopes to
list as soon as it can because you will see a number of other
property IPOs coming up soon,” said the source. “The challenge
now for all developers readying IPOs in Hong Kong is that whoever
goes first wins.”

The sources declined to be identified as they were not
authorised to speak to the media.

A Changjia representative could not immediately be reached
for comment.

Chinese developers are rushing to Hong Kong to raise capital
from IPOs as Beijing tightens bank credit, especially loans to
the real estate sector, which some economists and officials have
warned may be already overheated.

China SCE Property Holdings, a Chinese developer based in the
southern Chinese city of Xiamen, launched its IPO roadshow last
week, aiming to raise about $255 million in a Hong Kong IPO this
month. [ID:nHKF000087]

REAL ESTATE IPOS

Changjia has built several high-end residential properties
including luxury villas, targeting China’s emerging “new money”
class, in Shanghai’s Lujiazui area, dubbed China’s Wall Street,
as well as in western suburbs of the city where state guest
houses serve top government leaders.

Changjia, a private company started in 1992 by Zhao Changjia,
a self-made entrepreneur who used to teach at a local school and
served in the Chinese army, also operates in the pharmaceutical
and asset management sectors, according to the company’s website
(www.changjiagroup.com).

Chinese policymakers are concerned that more people are
borrowing to buy assets at inflated prices, including property,
after bank loans and household debt grew sharply in 2009.

Some banks in Beijing have raised mortgage rates on first
homes to 85 percent of the benchmark lending rate from 70
percent, the official China Securities Journal reported on
Monday. [ID:nTOE60O02X]

Nine Chinese property companies listed in Hong Kong last
year, raising a combined $5 billion, according to Reuters
calculations.

The flood of real estate IPOs has put pressure on offerings,
but underwriters lowered the deals’ valuations and managed to
draw big name investors to support several deals. Glorious
Property (0845.HK: ), which raised $1.28 billion in October last
year, fell 14.5 percent on its debut, and is now trading 31
percent below its offering price.

Investing Research

UPDATE 1-China developer Changjia plans up to $600 mln HK IPO