Chinese developer Sunac China Holdings Ltd.is considering spinning off its indoor ski parks business for a Hong Kong initial public offering as early as next year, according to people familiar with the matter.
The real estate giant is weighing a first-time share sale for its ice and snow assets to capitalize on the government’s push to boost the nation’s winter sports industry, the people said, asking not to be identified discussing private information. The company may decide to spin off other units in the future, but has prioritized the ice and snow division because it is among the most profitable, one of the people said.
Sunac’s plans are preliminary and could change, the people said. A representative for Sunac declined to comment.
A listing may help Sunac raise cash at a time when China has cracked down on borrowings by indebted developers. The curbs have prompted some to sell non-core assets and spin off units to comply with new rules. Although Sunac’s debt woes aren’t as bad as those of China Evergrande Group, it was among 12 companies directed by regulators in 2020 to disclose details on financing on a monthly basis.
Sunac’s snow business has largely driven the growth of the group’s culture and tourism segment, which also includes malls, water sports venues and some high-end hotels. The unit reported a 166% jump in revenue in the first half of 2021 from a year earlier to about 2.61 billion yuan ($404 million).
The Beijing-based company owns six ski resorts in Chengdu, Harbin, Guangzhou, Wuxi, Kunming, and Chongqing, two of which are operational now. All of them are indoor venues and are usually connected to other properties such as hotels and entertainment projects. Founded in 2019, Sunac’s Guangzhou “Snow World” saw more than 6,500 visits in a single day this May, a record for indoor ski resorts of the world. The company has more such facilities in the pipeline, according to local media.
As China prepares to host the Olympic Winter Games in Beijing next year, it expects a boom in ice and snow tourism, according to a report released by the China Tourism Academy. The country is expected to have 340 million ice and snow tourists spending about 680 billion yuan in the 2021-22 winter season, the report said.