Text/Leju Finance, Liu Zhiying

Another real - estate behemoth is on the verge of ending its 12 - year listing tenure on the Hong Kong stock market.

On the evening of November 17, Joy City Property (00207.HK) disclosed that at the court meeting held on the same day, the plan shareholders had green - lit the privatization resolution. Once the plan takes effect, its listing status is anticipated to be officially revoked starting at 4:00 PM on November 27.

Joy City Property serves as the flagship real - estate business under the COFCO Group. It made its debut on the Hong Kong stock market in 2013 through a backdoor listing as "COFCO Land". In 2019, COFCO embarked on a significant asset restructuring. The A - share listed platform, Joy City Holdings, acquired a 64% stake in Joy City Property via share issuance, creating a distinctive "A - controlled Red Chip" structure.

At present, Joy City Property's core operations encompass the development, operation, and management of urban complexes under the Joy City brand. It also engages in the development and sale of other property projects. Its business footprint extends across the core cities of five major urban clusters, with a presence in 24 mainland cities and Hong Kong. The company owns or manages numerous commercial projects, high - quality investment properties, and luxury hotels.

In the first half of 2025, Joy City Property reported total revenue of RMB 8.124 billion, marking a year - on - year decline of 5.8%. The profit attributable to the company's owners stood at RMB 105 million, a year - on - year decrease of 26.6%. Meanwhile, the overall gross profit margin reached 34.4%, up by 2.9 percentage points year on year.

As early as the end of July this year, Joy City Holdings unveiled a privatization plan. It announced that its controlled subsidiary, Joy City Property, would repurchase shares through a scheme of arrangement and intended to delist from the Hong Kong Stock Exchange. The total repurchase cost was estimated at approximately HKD 2.932 billion, representing a premium of 67.6%.

Prior to privatization, Joy City Holdings held 64.18% of the ordinary shares of Joy City Property. Demao, a wholly - owned subsidiary of its controlling shareholder COFCO Group, owned 2.58% of the ordinary shares and 1.095 billion preferred shares. Plan shareholders held a 33.24% stake. After the transaction, Joy City Holdings' stake will soar to 96.13%, and Demao will hold 3.87%, essentially achieving full ownership of Joy City Property.

Industry insiders noted that following privatization, Joy City Property will be seamlessly integrated into the Joy City Holdings system. This move is expected to resolve long - standing management efficiency issues stemming from the dual - listing structure between the two entities. It will also cut operational costs and boost decision - making efficiency. During a period of profound industry transformation, this integrated operational model might offer a competitive edge in tackling market challenges.

Regarding the delisting rationale, Joy City Property stated that over the past few years, its share price has consistently traded at a discount to its net asset value per share, coupled with overall low liquidity. This has hampered its ability to raise funds from the capital market. Given the challenging and complex market landscape, the company's listing status fails to provide sufficient offshore financing support, with no significant improvement foreseen in the near future.

In recent times, several real - estate firms and their subsidiaries have opted to go private and delist. This trend was set in motion by Capital Land in September 2021, followed by announcements from China Hongtai Development under China Jinmao, Huafa Property under Huafa Securities, Capital Grand under Capital Group, and Ronshine Service under Ronshine China.

CRIC believes that the primary reasons for real - estate enterprises and their subsidiaries to go private and delist can be distilled into the following three aspects:

1. Market and operational challenges: Inadequate stock liquidity makes it arduous for shareholders to offload large quantities of shares without impacting prices. The erosion of financing capabilities is also a concern, as listed real - estate enterprises' share prices have remained depressed for extended periods, leading to low valuations and restricting their access to capital market funds. Moreover, continuous losses and debt crises have further complicated the situation.

2. Strategic and efficiency imperatives: Privatization paves the way for the implementation of long - term strategies and enhances business agility. Additionally, reducing regulatory costs is a significant driving force. As listed companies, they are bound by a host of regulatory requirements, which inflate operational costs and add to management complexity. After privatization, these burdens can be alleviated, enabling more nimble strategic decision - making.

3. Shifts in the industry environment: Owing to the profound transformation of the current real - estate industry and the complex and volatile market conditions, real - estate enterprises have witnessed a year - on - year decline in sales volumes. Furthermore, against the backdrop of prolonged depressed share prices in the real - estate sector, privatization also aids in valuation restoration.

CRIC points out that passive delistings or privatization - driven delistings of real - estate enterprises and their related entities are inevitable phenomena during a period of profound industry adjustment. This trend is likely to persist over the next 2 - 3 years, with the industry undergoing a more thorough reshuffling and restructuring. Enterprises need to adapt to market changes and counter industry downturns and delisting challenges stemming from depressed valuations through strategic adjustments and operational optimizations.