Ying Li's land bank includes two plots of land on Chongqing Financial Street, an area slated to be the 'Wall Street' of China's western region. The Chongqing Municipal Government earmarked Rmb 15 billion for the development of Chongqing Financial Street. KPF artists' impressionINVESTOR DISAPPOINTMENT over the uncertain outcome of China Everbright International's takeover of Hankore Environment Tech Group could have been the key dampener on the stock price of Ying Li International Real Estate.
Instead of rallying like what SIIC Environment and Hankore did after announcements of state-owned enterprises becoming their strategic investors, its stock price slid by about 15% over 4 to 5 weeks after it announced China Everbright Limited would become a strategic investor.
Ying Li's stock price fell from 29.5 cents on 30 June to a low of 25 cents in early August. Bloomberg dataHankore's investor is China Everbright International (SEHK 257), an investor of energy and water projects.
On the other hand, Ying Li's investor is China Everbright Limited (SEHK 165), a financial goup with businesses ranging from fund management to brokerage and investment banking.
Under its fund management business, portfolios managed by the financial group range from private equity, venture capital, sector focus to bonds and mezzanine financing.
China Everbright Limited's real estate fund (Everbright Ashmore Investment) is the fastest-growing fund among its five sector fund portfolios in terms of asset size and profit contribution.
It is also one of China's leading real estate firms, with assets that are primarily large-scale commercial and residential property projects in first- and second-tier PRC cities.
Everbright Ashmore had assets under management of about US$2.06 billion as at 31 December 2013.
CEO Fang Ming remains Ying Li's controlling shareholder with a 35.79% stake after China Everbright Limited takes a stake of 14.9% by subscribing for 381 million new shares at 26 cents each.China Everbright Limited's conversion of the US$185 million callable convertible securities issue into Ying Li shares will increase the financial group's stake to 30.68%, while Mr Fang's stake will be diluted to 29.15%.
Photo by Sim Kih
Everbright Ashmore sees enormous potential in Ying Li, given its market position as a leading property developer in the first tier PRC city of Chongqing.
Chongqing has a reputation of being the Chicago on the Yangtze River.
Even though it is not as large or as wealthy as the coastal cities of Beijing or Shanghai, it has been growing rapidly, having been earmarked by the PRC government as the financial center of inland China.
The Ministry of Housing and Urban-Rural Development has earmarked Chongqing as a National Central City - which is a major city that leads surrounding cities in modernizing and integrating infrastructure, finance, public education, social welfare, sanitation, business licensing and urban planning.
This puts Chongqing in the league of other National Central Cities like Beijing, Guangzhou, Shanghai, Tianjin, as well as Hong Kong.
"We are confident of adding value to Ying Li for the long haul," said Richard Tang, CFO and executive director of China Everbright Limited, at a media luncheon held at Pan Pacific Singapore on Tuesday (2 September).
Ying Li CEO Fang Ming as well the Everbright Ashmore CEO James Pan were also present at the meeting.
As an illustration of the success China Everbright can bring to companies, Mr Tang pointed out that it was one of the early investors in China Aircraft Leasing Group, whose Hong Kong IPO in July raised about US$100 million.
When China Everbright acquired 48% in China Aircraft Leasing Group for US$17.3 million in 2011, the aircraft lessor only had a fleet of 8 aircraft.
Its fleet size has since increased 4-fold to 32 aircraft in the past 3 years.
"We are targeting long term growth in sizable quantum. We are not a fund with an investment holding period of 3 to 5 years," he said.
 "I want to assure shareholders that we have no intention or history of selling our assets at a high price to the companies we invest in," said Richard Tang, CFO and executive director of China Everbright Limited.Photo by Sim Kih Mr Richard Tang, CFO of China Everbright Ltd, explained the following ways that the financial group will value-add to Ying Li. "We have been able to pro-actively help companies reach their goals in the fastest and most effective way by providing expertise in capital management. |
Recent story: YING LI To Get S$284 M From New Strategic Shareholder, China Everbright
