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China firm Legend spins off skill section to concentration on consumer and use sector

The multibillion-yuan sale of skill projects by mainland firm Legend Holdings to home builder Sunac China Holdings is a latest pierce by Legend to revamp a business, after a 75 per cent decrease in net distinction in a initial half during a skill section dragged down a group’s halt performance.

Speaking to a Post on Monday, Ning Min, arch financial officer of Legend, said: “We trust a consumer and use sectors will move opportunities for discerning expansion … a understanding will promote Legend to thoroughness resources on core businesses including financial services, medical services, complicated cultivation and renovated expenditure services.”

Revenue during a skill section increasing usually 3 per cent year on year in a initial 6 months to 4.49 billion yuan, notwithstanding being driven by sales in initial and second-tier cities, while net distinction forsaken 75 per cent to 365 million yuan.

After repaying superb debt of about 7.5 billion yuan in a genuine estate growth business, net deduction from a sale, value 13.79 billion yuan, would be used to deposit in a core business, a organisation pronounced in a filing on Sunday night.

Li Xingwen, an researcher with ICBC Research, pronounced a land package sole by Legend comprised “both good and bad land pieces all over China”, and was a discount for Sunac.

“Sunac now has clever sales ability, good pattern and construction ability, so appropriation land from Legend saves money, time and energy. It will give a home builder a boost, though it is doubtful to lift financial opening this year due to allotment arrangements,” he said.

Sunac’s first-half income rose 94.5 per cent year on year to 10.6 billion yuan, though net distinction plunged 92.3 per cent to 72.9 million yuan, as aloft financial costs eroded many of a gains from increasing skill sales.

Analysts pronounced a understanding was a pointer of a serve converging in China’s skill marketplace amid rising foe and squeezed distinction margins in a industry.

“While stronger players can acquire a land of companies that quit a marketplace – a cost would be reduce than during open auction and this is heading to serve converging and thoroughness of resources in China’s skill market,” he said.

Hong Kong-listed Legend and Sunac released a corner matter on Sunday dusk announcing a sale.

The understanding includes equity interests in some 40 companies that reason a rights to a skill projects, as good as a onshore and offshore debt they carry.

After a deal, Legend will see a skill business mostly spun off, solely for an seductiveness in a Beijing industrial park, with leasable area covering about 180,000 block metres, and a 60 per cent equity seductiveness in a Wuhan skill association before owned by a group.

Legend pronounced in a filing that a projects are widespread opposite 16 mainland cities including Beijing, Tianjin, Chongqing, and Hangzhou, cover an sum site area of about 6.94 million sq metres, a sum sum building area of about 18 million sq metres, and an unsold area of about 7.3 million sq metres.

Sunac pronounced a understanding would concede a association to enhance a skill growth in vital and second-tier mainland cities.

Legend’s share cost rose 2.04 per cent to tighten during HK$20 in Hong Kong on Monday.

Meanwhile, a cost of Sunac’s shares increasing 7.12 per cent to finish during HK$5.87.