China Vanke Subsidiary Onewo Seeks $784 Million in Hong Kong IPO

Onewo Inc, the property management division of China Vanke Co Ltd (SZ:000002), wants to raise up to HK$6.2 billion ($784 million) via a long-awaited initial public offering in Hong Kong.

The company will sell 116.7 million shares at a price range of HK$47.1 to HK$52.7 per share. If investors exercise their over-allotment option, the company will offer 134.2 million shares to raise around HK$7.1 billion.

China Vanke disclosed the sum in a filing to the Hong Kong exchange. Earlier reports stated that the company sought to raise as much as $1.5 billion. Nonetheless, it is one of the largest IPOs in Hong Kong this year.

Onewo's market capitalization will range between HK$54.97 billion and HK$61.51 billion upon conclusion of the transaction. Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), and Citic Securities are the offering's joint sponsors.

Oneto provides property management services that use artificial intelligence and outsourcing approaches for business processes. Vanke holds around 60% of the company.

The offering coincides with a severe downturn in China's real estate market, which has been compounded by a series of COVID lockdowns this year. Several large developers are suffering a liquidity constraint as a result of mortgage boycotts and greater regulatory scrutiny, while new home sales decline.

China Vanke has thus far bucked the slowdown, as seen by its month-to-month profit and revenue rise in its interim results. However, both the company and Onewo have warned of a potential downturn in the property market due to other challenges.

This year, the Hong Kong IPO market has also slowed because to COVID lockdowns and growing regulatory scrutiny in China.

The Hang Seng, Hong Kong's benchmark stock index, has declined by almost 25 percent over the past year, and local market prices are also under pressure.