DALIAN Wanda Group is looking to take its real estate arm off the Hong Kong bourse just 15 months after its debut, unhappy with its share performance and preferring to place its bets on an upcoming Shanghai listing.

    Mainland-listed firms typically command higher valuations than those in Hong Kong, helped by large pools of retail investors. An index tracking dual-listed companies shows mainland listings trade at an average 34 percent premium to the same company listed in Hong Kong.

    Dalian Wanda Commercial Properties Co., the mainland’s largest business property developer, said last week that its parent firm was in the early stages of considering a general offer that could result in it being taken private.

    The offer would be no less than HK$48 (US$6.19) per share, a level in line with its pricing for its initial public offering, in which it raised about US$4 billion.

    Its shares surged 18 percent Thursday to HK$45.95, giving the company a market value of US$26.8 billion, although they remain down 41 percent from an all-time high marked last June.

    Wanda Commercial did not state a reason for the potential privatization, but a source with knowledge of the matter said the group felt that the Hong Kong shares were undervalued, which could hurt the pricing for its planned listing on the mainland.

    The move would, in many ways, make sense for Wang Jianlin, chairman of Wanda Group.

    On one hand, Wanda trades at a 56 percent discount to its net asset value, according to Citigroup. Credit Suisse also estimates the fair value of the company at HK$60 per share.

    By contrast, Wanda Cinema Line, Wang’s other listed business that trades in Shenzhen, has quadrupled in value since its January 2015 debut.

    (SD-Agencies)