PROPERTY developer China Evergrande Group is seeking a market value of 228 billion yuan (US$33.66 billion) in its Shenzhen backdoor listing, according to a document for investors seen yesterday.

    Evergrande, the country’s second-largest developer by sales for the first half of this year, plans to inject all of its property projects, except for two tourism developments, into Shenzhen Special Economic Zone Real Estate & Properties (Shenzhen Real Estate) and it aims to finish the restructuring by the end of April next year.

    Hong Kong-listed Evergrande first announced in early October that it plans to inject almost all of its property assets into a Shenzhen company, orchestrating a backdoor listing aimed at boosting its valuation and making it easier for the heavily indebted company to raise funds.

    Evergrande said it will become the controlling shareholder of Shenzhen Real Estate after the State-backed Shenzhen developer issues new shares and cash for buying 100 percent of the equity interest in Evergrande subsidiary Hengda Real Estate.

    Guangzhou-based Evergrande said in a statement in October that the deal would provide “an additional fundraising platform” for it and “enable the market to assess the intrinsic value of the company positively and reasonably.”

    Evergrande has captured investor attention after amassing some US$57 billion in debt, almost six times its market value, on land acquisitions and corporate mergers.

    It has bought shares worth US$2.2 billion in rival China Vanke, putting itself in the middle of a high profile corporate battle. In April, it bought a majority stake in Shenzhen-listed Calxon Group, in a US$553 million deal.

    Evergrande may introduce strategic investment of up to 30 billion yuan into Shenzhen Real Estate. It also said the final issue price by Shenzhen Real Estate has not been determined yet.

    “We believe Evergrande and its property assets should be able to command a higher valuation in the A-share market amid mainland investors’ focus on sales and brand name,” Credit Suisse said in a note in October.

    Evergrande, Dalian Wanda Group and other Hong Kong-listed mainland developers are increasingly eyeing onshore listings as domestic funding costs fall. Mainland-listed firms also command higher valuations than those in Hong Kong, helped by a large pool of retail investors. (SD-Agencies)