Onewo, a China Vanke Subsidiary, Seeks $784 Million in an IPO in Hong Kong

Onewo Inc, the property management branch of China Vanke Co Ltd (SZ:000002), is planning a long-awaited initial public offering in Hong Kong to generate up to HK$6.2 billion ($784 million).

The company would sell between HK$47.1 and HK$52.7 per share for a total of 116.7 million shares. If investors exercise their over-allotment option, the company will offer 134.2 million shares for about HK$7.1 billion to raise capital.

China Vanke revealed the amount to the Hong Kong exchange in a file. Earlier reports indicated that the corporation was seeking to raise up to $1.5 billion. Nonetheless, it is one of Hong Kong's largest IPOs this year.

Upon completion of the deal, Onewo's market value will vary between HK$54.97 billion and HK$61.51 billion. The joint sponsors of this offering are Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), and Citic Securities.

Oneto offers property management services that incorporate artificial intelligence and outsourcing strategies. Vanke owns around 60% of the business.

This offering coincides with a catastrophic decline in China's real estate market, which has been exacerbated this year by a series of COVID lockdowns. Several large developers are experiencing a liquidity crunch as a result of mortgage boycotts and heightened regulatory scrutiny, while new house sales fall.

China Vanke has defied the slowdown thus far, as seen by its month-to-month profit and revenue growth in its interim financial reports. However, both the firm and Onewo have warned of a future fall in the property market due to other difficulties.

This year, the Hong Kong initial public offering (IPO) market has also slowed due to COVID lockdowns and increasing regulatory scrutiny in China.

Hong Kong's benchmark stock index, the Hang Seng, has plummeted by about 25 percent in the previous year, and local market prices are also under pressure.