China Vanke investing in Huishang's Hong Kong IPO

SHANGHAI--China Vanke Co. (000002.SZ), the nation's largest property developer by revenue, has confirmed that its unit will become a cornerstone investor in Huishang Bank Corp.'s Hong Kong initial public offering, investing up to 3.43 billion Hong Kong dollars (US$442 million) in the Chinese lender.

Vanke's unit will subscribe to no more than 883,986,000 shares of Huishang, which are priced between HK$3.47 and HK$3.88, the Shenzhen-based developer said in an emailed statement late Wednesday. China Vanke will become Huishang's single largest shareholder after its IPO, and could eventually own between 8% and 8.28% of Huishang.

Vanke is taking a stake in the commercial lender "to better meet its customers' demands for financial services," Vanke President Yu Liang said in the emailed statement.

Huishang, based in Hefei, Anhui province, plans to sell 2.61 billion shares in its IPO, raising up to US$1.3 billion, the Wall Street Journal reported earlier this week. Vanke will commit about US$400 million in the IPO as a cornerstone investor, the WSJ had said, citing people familiar with the matter. Cornerstone investors are usually guaranteed large allotments in IPOs in exchange for agreeing to hold the shares for a certain length of time.

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Vanke's annual property sales have exceeded 100 billion yuan (US$16 billion) and the Huishang investment isn't considered big in comparison, Mr. Yu said.

Huishang has 199 outlets in 16 cities in Anhui province and in Nanjing, Jiangsu province. The bank reported 2012 net profit of CNY4.3 billion, a 23% increase a year earlier, research reports showed.

Vanke has a presence in more than 50 cities in China and said earlier this week that third-quarter earnings rose 18% to CNY1.60 billion. Vanke's operates mainly in the domestic market but has stakes in condominium projects in San Francisco, Hong Kong and Singapore.

--Prudence Ho contributed to the article.

Write to Esther Fung at esther.fung@wsj.com

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