The delisting trend among property developers may persist over the next 2-3 years.
Grandjoy Holdings Group Co., Ltd. (00207.HK), which went public in 2013, is set to complete its privatization in 2025, marking the end of its listing journey. On November 17, the company announced that shareholders attending or represented at the court meeting approved the privatization resolution.
Upon the scheme's effectiveness, Grandjoy's listing status on the Hong Kong Stock Exchange is expected to be officially withdrawn on November 27.
As the commercial property platform under COFCO Group, Grandjoy had developed or managed 32 commercial projects, including Joy City and Joy Breeze complexes, along with investment properties, residential developments, and luxury hotels across China's major city clusters by the end of 2024.
Currently, COFCO's property portfolio also includes A-listed Grandjoy Holdings, with Grandjoy Property serving as its consolidated subsidiary. This "A-share controlling red-chip" structure remains relatively uncommon in the industry.
In late July this year, Grandjoy Holdings announced plans to repurchase shares via scheme of arrangement and delist from HKEX, with the total repurchase cost reaching approximately HK$2.932 billion.
Industry observers attribute the privatization decision to low stock liquidity, constrained financing capacity, and governance complexities under the current structure, while providing exit opportunities for investors.
Pre-privatization, Grandjoy Holdings Group held 64.18% stake, Demao Limited owned 2.58%, and scheme shareholders controlled 33.24%. Post-transaction, Grandjoy Holdings' stake will rise to 96.13%, with Demao retaining 3.87%.
This near-total consolidation will "enhance the company's equity in Grandjoy Property and boost attributable net profit," according to the company's statement.
Grandjoy Holdings reported consecutive annual losses from 2022-2024 totaling over RMB7 billion, though it returned to profitability in H1 2025. The privatization is expected to further improve its financial performance through increased equity interests.
The property sector has witnessed growing privatization cases since Beijing Capital Land initiated the trend in September 2021. Recent examples include China Jinmao's Macro Land, Huafa Properties, and Minmetals Land alongside Grandjoy.
CRIC Research identifies three key drivers behind developers' privatization wave: 1) Market and operational pressures: Illiquid stocks hinder major share disposals without price impacts; diminished financing capacity due to prolonged low valuations; and consecutive losses with debt pressures. 2) Strategic efficiency needs: Privatization facilitates long-term strategy implementation and operational flexibility while reducing regulatory compliance costs. 3) Industry transformation: The sector's profound adjustment phase, characterized by volatile markets and declining sales, makes privatization an inevitable phenomenon. CRIC predicts this trend will continue for 2-3 years, leading to thorough industry reshuffling.
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