Mainland property stock offerings in Hong Kong are coming off the boil amid poor market sentiment, with Zhong An Real Estate putting in a lacklustre first-day performance.
Shares of the Hangzhou-based firm fell as much as 16.04 per cent before closing at HK$6.71 yesterday, a 0.6 per cent gain from its offer price and well below the debuts of other recent property listings.
In contrast, mainland power company GCL-Poly Energy Holdings climbed 10.24 per cent on its first day as investors bet on growing electricity demand in the country.
Concerns about credit tightening in the mainland and relatively expensive pricing kept Zhong An shares from topping the solid trading debuts of rivals such as Sino-Ocean Land Holdings, Soho China and China Aoyuan Property Group. They all posted gains ranging from 15 per cent to 43 per cent on their first trading day in Hong Kong.
'Zhong An's timing is not good, given poor market sentiment and the fact that a lot of hot money was invested in GCL-Poly,' said Michael Wong, a research director at Hantec Investment International. 'Zhong An does not have a big land bank and its valuation is a bit expensive.'
Patrick Yiu Ho-yin, an associate director at CASH Asset Management, agreed Zhong An's valuation was not cheap and there was selling pressure.
