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China Vanke property services unit Onewo targets up to US$1.5 billion in Hong Kong IPO

  • Onewo is playing up its use of technology such as ‘AIoT’, or artificial intelligence of things, as a differentiator
  • China Vanke, the country’s second-largest developer by sales, owns about 63 per cent of Onewo

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A file photo from July of Connect Hall at the Hong Kong exchange. Onewo’s IPO schedule could change as it is subject to market conditions. Photo: Jonathan Wong
Georgina Lee

Onewo, the property services unit of property developer China Vanke, has received the go-ahead from the Hong Kong stock exchange’s listing committee for an initial public offering (IPO), and will start the investor education process this week, said a source close to the transaction.

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The Shenzhen-based firm is aiming to raise between US$1 billion and US$1.5 billion, with a share sale scheduled for later this month, said the source, who is not authorised to speak publicly about the deal. Onewo’s IPO schedule could change as it is subject to market conditions.

Onewo’s IPO will come at a tough time for China’s property sector – major developers such as Country Garden have seen their earnings plummet amid a downturn in the property sector, which is estimated to account for a quarter of China’s gross domestic product. Country Garden said this week that its net profit for the first six months of 2022 had declined by 96 per cent, its worst half-year results since its listing in 2007.
Embattled developers such as China Evergrande Group, Sunac China and Zhenro Properties have defaulted because of China’s “three red lines” deleveraging campaign. This has led to a wave of mortgage boycotts by homebuyers frustrated by suspended projects linked to some of these cash-depleted players.
A China Vanke construction site in China’s Qinghai province is seen in this file photo from September 2021. Revenue from its parent firm accounted for 16.1 per cent of Onewo’s net profit for the whole of last year. Photo: Bloomberg
A China Vanke construction site in China’s Qinghai province is seen in this file photo from September 2021. Revenue from its parent firm accounted for 16.1 per cent of Onewo’s net profit for the whole of last year. Photo: Bloomberg

“Due to delay in construction and/or sales schedules, we may experience a slower growth in our value-added services for developers,” Onewo said in a draft prospectus filed with the exchange. There was “no assurance that such incidents may not bring about further negative development to overall property development industry in China”, it said.

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Onewo is playing up its use of technology as a differentiator. It uses “AIoT”, or artificial intelligence (AI) of things, which combines AI with internet of things infrastructure to digitise workflows, according to its draft prospectus.

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