Ovannis Capital: Chinese Real Estate company prices it’s IPO at the bottom of it’s range.
Beijing analyst for Ovannis Capital are reporting that Chinese real estate company IFM Investments Ltd. has priced it’s initial public offering at the bottom of it’s recently announce range of prices. Ovannis Capital analysts say China’s real estate market has benefited greatly from strong economic growth and improved access to credit. IFM has a franchise agreement in place to sell it’s properties under the brand Century 21 across China. IFM has sold 12.5 million shares at $7 each. This has raised $87.4 million for IFM.
Ovannis Capital analyst reported on Wednesday that IFM Investments Ltd. had cut it’s initial offering to 12.5 million shares and had hoped to sell them for $7 to $8 per share. IFM Investments Ltd. had initially planned to offer 16.65 million shares for between $8.75 and $10.75 a share.
Ovannis Capital analysts said that Chinese property prices grew strongly in 2009 and there were fears of a property bubble. Prices in December 2009 had risen 7.8 percent on last years prices. This is the fastest growth recorded in 2009. Government action are expected to lead to a slow down in the market, preventing a crash in property prices. Premier Wen Jiabao, the Cabinet and other top officials have voiced concerns over the red-hot property market of the past month, and the Central Bank in January raised reserve requirements for banks for the first time since a December 2008 cut to try and prevent any burst in asset bubbles.
IFM Investments Ltd was co-founded by brothers-in-law Donald Zhang and Harry Lu, has seen sharp increases in net revenue and income. IFM reported a net revenue of $65 million for the nine month ending in September 2009. Ovannis Capital analysts say this was up 112.4 percent on the same period in 2008.
IFM is expected to debut on the New York Stock Exchange under the symbol “CTC” on Thursday.
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