The Business Herald’s markets and banking reporter.

Stock Takes: Fu Wah International targets NZ aged-care

Metlifecare is likely on the radar of Chinese property developer Fu Wah International. Photo / Supplied
Metlifecare is likely on the radar of Chinese property developer Fu Wah International. Photo / Supplied

New Zealand's listed aged care players could be in for some action on their share registers, with one of China's leading property developers eyeing investment opportunities in the sector.

Fu Wah International, which already has plans to build two hotels in Auckland, wants to take a stake in a Kiwi retirement village operator, president Chiu Yung told Stock Takes in Beijing.

He said the company didn't have any specific targets yet.

But NZX-listed Ryman Healthcare, Summerset Group, Metlifecare and Arvida Group will almost certainly be on its radar.

Chiu said Fu Wah wanted to operate retirement villages in China, which has a rapidly ageing population, and taking a stake in a New Zealand operator would allow it to gain valuable industry know-how.

The Beijing-based, privately owned firm has already demonstrated that it has deep pockets.

It's spending $200 million developing a five-star Park Hyatt hotel on a waterfront site in Wynyard Quarter owned by Panuku Development Auckland, a council organisation.

And the company revealed last week that it had bought an almost 1 ha site nearby on which it plans to spend more than $300 million constructing a three or four-star hotel and apartment complex.

Fu Wah's real estate portfolio in China is focused around Beijing, with properties in the Chinese capital including the Jinbao Tower, Legendale Hotel and the Beijing Hong Kong Jockey Club.

Chiu's mother, Chan Laiwa - one of China's richest women - founded Fu Wah in 1988.

Tech limit

Fu Wah International President Chiu Yung says it has no specific target in the aged-care sector yet. Photo / Supplied
Fu Wah International President Chiu Yung says it has no specific target in the aged-care sector yet. Photo / Supplied

Could the Australian stock exchange's moves to limit early stage tech listings be good news for NZX?

A consultation document released this month proposes changes including that companies listing on the ASX be required to have a minimum market capitalisation of A$20 million ($30 million) - up from A$10 million currently - or net tangible assets of A$5 million, A$2 million more than is presently required.

It's being read as a move to block listings of early-stage tech companies.

There have reportedly been more than 100 such floats on the ASX over the past two years, with 45 per cent of those involving companies with revenue under A$1 million.

ASX's document says the changes are aimed at ensuring it continues to be "a market of quality and integrity, and remains internationally competitive". NZX would appear to be heading in the opposite direction to its Australian counterpart.

It launched NXT last year, a new market specifically targeted at early-stage companies valued in the $10 million to $100 million range.

But in recent months New Zealand tech firms Volpara Health Technologies, 9 Spokes and Powerhouse Ventures have announced plans to skip the NZX and NXT and list across the Tasman.

That followed Christchurch-based jetpack maker Martin Aircraft Company's decision to list in Australia last year.

In the discussion document ASX describes itself as the "pre-eminent exchange for listings in Australia and New Zealand", which would probably raise a few eyebrows up at NZX.

If early-stage New Zealand companies were blocked from the Australian exchange, that could help send them NXT's way.

In play

Equipment rental firm Hirepool is back on the block after shelving plans for a sharemarket listing a couple of years ago.

But in another blow for the NZX, a trade sale now appears to be a more likely exit strategy for the company's majority shareholder, Australian private equity firm Next Capital.

The Australian Financial Review reports that Next has hired Greenstone Partners and PwC New Zealand to test the waters around potential trade and private equity buyers.

A local market source confirmed the report.

Back in 2014, Next was forced to abandon plans for a more than $260 million initial public offering after experiencing significant push-back on pricing from institutional investors.

The offer, which was mostly designed to facilitate Next's partial exit from the company, in addition to raising a small sum to repay debt, was pitched at a $1.10 to $1.50 range.

But fund managers said the price should have been well south of that.

- NZ Herald

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The Business Herald’s markets and banking reporter.

A business journalist for more than four years, he also writes the weekly Stock Takes column.Christopher’s main focus is the local sharemarket and issues facing Kiwi investors. He covered manufacturing and retail in his previous Herald role and maintains a special interest in New Zealand’s growing trade relationship with China.

Read more by Christopher Adams

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