Source: Securities Daily

It is reported that Evergrande officially lands on HKEX today. If no unexpected events occur, the company will become a mainland private enterprise with the largest market value in the Hong Kong stock market this year.
The market value exceeds 50 billion
       Evergrande shares will be traded in the Hong Kong market today. It is reported that the issues price of Evergrande is 3.5 HKD per share. The quantity of public offering is 1,610 million shares, accounting for 10.8% of the capital stock of the company. The fund raised is about 6 billion Hong Kong dollars. Estimated according to the prospectus, the total market value of Evergrande will reach 52,500 million Hong Kong dollars. According to analysts, Evergrande will become a mainland property stock with the largest market value in the year.
      In addition, judging from the corporate scale, Evergrande is also expected to be leading among the mainland property stocks. Before Evergrande, a number of mainland real estate enterprises have landed on Hong Kong this year, including Glorious Property, Powerlong, Yuzhou Properties. At present, Longfor Group is preparing for listing. Compared with these companies, Evergrande, with 51 million square meters of land reserve and 17 million square meters of construction areas, has obvious advantages in terms of the scale.
      According to a third party statistics of CRIC (China), Evergrande ranks the top five among the mainland real estate enterprises in terms of the sales amount and the sales area in the first three quarters, and ranks the first in terms of the land reserve and construction area.
The grey market considers the first-day performance as promising
      It’s worth noting that since October, at least 6 stocks from the mainland planned to land on the Hong Kong market. Impacted by the adjustment of the property stocks in the Hong Kong market, several stocks listed previously have encountered difficulties to some extent, and most of their first-day performance is not good. Glorious Property fell below the issue price on the first day of listing. Powerlong did not fall below the issue price, but the amount of increase was only 2% on the first day of listing. Yuzhou Properties, which was listed recently, again fell below the issue price on the first day for property stocks. Excellence Group and Mingfa Group, which called for capital together with Evergrande at the same time, declared to suspend listing.
       In this case, the tendency of Evergrande on the first day of listing draws the close attention of the market. According to the analysts, the first-day performance of Evergrande should be promising. Because the issue price of Evergrande is very low and has only a 5-times P/E ratio, and the quality of Evergrande is the best among the mainland property enterprises listed recently. The evidence for such analysis is the recent relevant data, which indicate that the grey market (institutional trade by agreement) price of Evergrande is about 3.8 to 4 HKD, 14% higher than its pricing. Generally speaking, if the grey market price is higher than the issue price, it indicates that the buyers will consider the first-day performance as promising.
      According to the analysts, Evergrande was sought-after by investors from the moment when it called for capital. According to statistics, the public offering of Evergrande obtains 44.72 times of excessive subscription and freezes 29,537 million HK dollars of fund. The international placement obtains 10 times of excessive subscription. After Evergrande starts the clawback mechanism, the distributable shares in the public offering are increased to 484 million shares, which is equivalent to 30% of the total sales all over the world. Analysts expect that a lot of previous purchasing funds will buy in Evergrande in the secondary market, making its first-day performance more promising.