China Jinmao sells five-star Ritz-Carlton hotel in Hainan’s Sanya for US$322 million

China Jinmao Holdings, the property development arm of state-backed Sinochem Holdings, has sold a tourism subsidiary that owns the five-star Ritz-Carlton hotel on Hainan Island for 2.26 billion yuan (US$322 million), as it pursues asset restructuring amid a prolonged downturn in mainland China’s real estate market.\nShanghai Jinmao, the developer’s wholly owned unit, reached an agreement with Sanya Luanmao on Tuesday to sell its 100 per cent stake in Sanya Tourism, which solely owned the Ritz-Carlton Sanya Yalong Bay, China Jinmao said in a statement to the Hong Kong stock exchange on Wednesday.\n“Since its opening, the Ritz-Carlton Sanya Yalong Bay has demonstrated mature and stable operations with favourable profitability and cash flow, positioning it as a prime candidate for the company’s boutique portfolio strategy,” China Jinmao said. “Asset securitisation will maximise the valuation and liquidity of the hotel assets.”\nThe restructuring may enable China Jinmao to better weather the property slump that has thrown even the industry’s biggest players – including China Vanke – into financial stress.\nWith official data showing that home prices continued to decline in November, major investment banks said Beijing would need to roll out bolder measures to arrest the decline and lessen the drag on economic growth.\nShares of China Jinmao fell 0.8 per cent to HK$1.21 on Wednesday in Hong Kong, where the stock market traded for half a day on Christmas Eve. The stock has advanced 23 per cent this year, trailing a 29 per cent gain in the Hang Seng Index.\nThe transaction price represented a roughly 6 per cent premium to the evaluated net-asset value of 2.14 billion yuan for Sanya Tourism at the end of March, according to the statement. The deal would be transacted through the China Beijing Equity Exchange, a trading venue for unlisted companies and company assets.\nSanya Tourism was established in 2004 and the Ritz-Carlton Sanya hotel opened in 2008 with 446 guest rooms. The tourism unit posted a net income of 34.6 million yuan in the first quarter of the year. Full-year profit for 2024 was 57.9 million yuan.\nSanya Luanmao is a wholly owned subsidiary of Citic Securities, China’s biggest publicly traded brokerage.\n