DALIAN Wanda Commercial Properties Co., the world’s second-largest developer of shopping malls and office buildings, is seeking to raise between US$3.2 billion and US$3.86 billion through a Hong Kong IPO, cutting the size of the planned offer by at least a third as investors balked at the high valuation.

    The company, backed by Chinese billionaire Wang Jianlin, is offering 600 million new shares in a range of HK$41.80 (US$5.39) to HK$49.80 each, IFR, a Thomson Reuters publication reported Saturday. That would give the company a market value of between US$20.8 billion and US$24.7 billion, IFR said, quoting sources.

    It had initially targeted to raise up to US$6 billion, Reuters previously reported.

    Wang, 60, China’s fourth-richest man with a net worth of US$13.2 billion, according to Forbes, plans to use the IPO proceeds to fund the expansion of an empire built at speed using cheap government land. He has already opened 100 Wanda Plaza mixed-use developments from 21 just four years ago.

    The IPO is set to be launched today, with pricing slated for Dec. 15. Even at the bottom of the range, Wanda’s will be the second-largest IPO in the Asia Pacific excluding Japan this year.

    The IPO comes at a time when Chinese real estate sector is battered by a slump, with slowing sales and a high debt burden pulling down corporate earnings. Dalian Wanda’s net profit fell 47 percent in the January to June period to 4.97 billion yuan (US$808 million) due to a decline in the fair value gain of its properties.

    The price range represents a 46-54 percent discount to Dalian Wanda’s 2015 estimated net asset value and 2015 price to earnings (PE) multiple of 7.4 to 8.9, IFR reported. Chinese real estate companies trade at median PE ratio of 5.93, according to Thomson Reuters data.

    (SD-Agencies)