TCL will sell property unit to Fantasia

Chinese electronics maker TCL Corp will sell its property unit in Huizhou, South China's Guangdong Province, for 164 million yuan ($27 million) to Fantasia Holdings Group, according to a filing posted on the Shenzhen bourse Tuesday.

Hong Kong-listed Fantasia also announced Tuesday that it acquired 100 percent equity interest in Huizhou TCL Real Estate, which reported a profit of 21.3 million yuan in the first three quarters this year, and a loss of 32.51 million yuan in 2012.

Also, Fantasia issued 863 million subscription shares to TCL's Hong Kong branch at HK$1.41 a piece, raising a net proceed of HK$1.22 billion, according to a Fantasia statement on the Hong Kong bourse Tuesday.

The subscription shares represent around 17.65 percent of Fantasia's previously issued share capital, and 15 percent of its issued share capital after enlarged by the allotment and the issuance of the subscription shares.

According to Fantasia's interim financial statement, the company made HK$325 million in profit in the first half of 2013, up by 67 percent from the same time last year.

China's major electronics makers, including Konka Group, based in Shenzhen, South China's Guangdong Province, and Haier, headquartered in Qingdao, East China's Shandong Province, have all gotten involved in the real estate market.

News portal 163.com cited an unnamed analyst as saying that profitability in China's consumer electronics market has been sliding in recent years due to fierce competition, so the companies have been entering the property market in order to make easier and quicker profits.

"The profit margin for property companies is usually higher than 10 percent, and the firms can get a return within three years," the analyst said.

Fantasia is devoted to developing real estate projects in China's second-tier cities such as Wuhan, Central China's Hubei Province, news portal hexun.com reported Monday. The company will own 1.2 million square meters of land reserves after the purchase.