Shares of Jinmao Property Services Co. plunged in their Hong Kong trading debut, dropping as much as 35% to HK$5.32 from an initial public offering price of HK$8.14.
Sentiment toward its parent China Jinmao Holdings Group Ltd.
has been weak, as the property sector has been weighed by the debt-related woes of China Evergrande Group
The parent company also saw its contracted property sales drop more than half to 17 billion yuan ($2.69 billion) for January to February.
Jinmao Property Services was last 28% lower at HK$5.85, while China Jinmao was down 0.9% at HK$2.33, dropping 63% from its 2020 high of HK$6.32.
The decline in Jinmao Property Services’ shares comes even as the sector trades broadly higher, reflecting investor concerns over the company’s prospects. The Hang Seng Property Service and Management Index, which tracks large Hong Kong-listed property management companies, is up 1.5%.
Although there have been measures to help boost demand for homes, China’s property sector isn’t out of the woods yet, Daiwa Capital Markets said.
Some city-level governments have relaxed home-purchase restrictions and ordered banks to lower mortgage rates for first-time home buyers, but it will take time for home sales to pick up, Daiwa said. Home sales are thus likely to remain slow in the first half, which could continue to put pressure on the sector.
Jinmao Property Services said it would use its IPO proceeds for business development purposes, which would include mergers and acquisitions.