(Yicai Global) March 21 -- Shares in SOHO China Ltd., a major commercial property developer, have plunged after the firm announced plans to spin off its office-sharing brand to better reflect the unit’s individual value.
The parent company’s stood at HKD4.27 (USD0.54) as of 11.29 a.m. this morning, down 4.69 percent after falling 7.23 percent yesterday, the same day the firm unveiled plans for the spinoff and reported last year’s net profit at CNY4.7 billion (USD747 million), more than five times higher than 2016 as its investment properties became significantly more valuable.
SOHO 3Q runs as a financially and legally independent unit, and when conditions are right it will be split for listing, allowing the parent firm to appreciate its full potential, Chief Financial Officer Tong Ching Mau said at the firm’s annual results conference, adding that the company’s stock price did not accurately reflect the value of SOHO 3Q.
SOHO will determine the time and location of the listing based on business development and the environments of potential capital markets, Tong said.
The firm launched the SOHO 3Q brand in 2015. It adopts an online-to-offline business model to offer shared office space for tenants, and has opened 26 centers in Beijing, Shanghai, Hangzhou and Nanjing to provide 26,000 desks, according to the annual report, and plans to double that figure this year.