MAJOR domestic property developer Evergrande Real Estate Group Ltd. will invest HK$950 million (US$122.5 million) in New Media Group Holdings for a controlling stake in the Hong Kong-based magazine publisher, in yet another move to diversify from the sluggish housing market.

    The Guangzhou-based developer has signed a memorandum of understanding to buy 647.95 million shares, or a 74.99 percent stake in New Media Group, a firm that publishes Chinese-language magazines such as Oriental Sunday and Weekend Weekly.

    Evergrande Real Estate, which lists shares in Hong Kong, in recent times has been expanding into businesses that have no link to real estate, such as solar energy, baby formula and bottled water.

    Last month, the developer said it plans to invest a total of HK$1.2 billion in a U.S. solar company, Solar Power Inc., and another Hong Kong-listed firm, Guocang Group Ltd., as part of its plans to develop business in the new energy sector.

    Evergrande, well known in China for owning a successful soccer team, said in August it would spend 10 billion yuan (US$1.63 billion) in China’s oil, grain and dairy markets. Last year, it started a new business line distributing bottled water.

    Domestic real estate developers have been facing tighter margins and weakened property sales as China struggles with ballooning levels of housing inventories.

    Some are expanding into real estate development abroad to cater to demand from Chinese buyers who are eyeing homes outside the sagging domestic market.

    Analysts have raised concerns about Evergrande’s strategy of diversifying, noting its high-debt levels and a large inventory of apartments.

    Following Evergrande’s move to invest in solar energy, ratings firm Moody’s Investors Service lowered its outlook on the property developer to negative from stable. (SD-Agencies)