Yang Huiyan, the wealthiest woman in Asia, became a legend in 2007. Yang's company, Country Garden Holdings, had a total turnover of 7.94 billion yuan and a net profit of 1.67 billion yuan in 2006. On April 3, Country Garden made an IPO of 2.4 billion shares, raising $1.2 billion, the biggest IPO ever for a mainland real estate company listed overseas. Yang holds 9.52 billion shares of the company on behalf of her family, or 70 percent of all its equity. Currently, the share price of the company is about HK$13 a piece.

It is easier for property companies to list in Hong Kong. The cornerstone industries there are largely comprised of finance, trade and property, and are familiar to Hong Kong investors. On the mainland, the IPO procedure for such companies is much more complicated.

Land is the lifeblood of property companies. The most direct impact for listed property companies is the considerable increase of land reserves. After Country Garden was listed, the money it raised helped more than double its land reserves, which were up to 45 million square meters at the end of July 2007.

Hitting the big time

The mainland and Hong Kong markets may not be big enough for some developers. Limited sources of financing and high access requirements in both markets are forcing real estate companies to seek listings throughout the world.

"Some property companies are discussing their listing plans in the United States," said Liu Zheng, Executive Officer of North American Security Group's Beijing Representative Office.

Liu also explained that although overseas mutual funds are interested in investing in Chinese properties, they fear the absence of exit mechanisms and relevant regulations.

"Therefore, many property developers are eyeing IPOs in overseas stock markets," Liu said. Currently, Liu's company has helped one Chinese property company achieve IPO approval from U.S. Securities and Exchange Commission. Some other property companies are also planning IPOs on stock markets abroad with the help from Liu's agency.

Liu said he found that many conceptual problems are plaguing companies tinkering with the idea of listing. Many property companies tend to believe that if they are not qualified for domestic IPO, they would be far from qualified for an overseas IPO.

"The IPO requirements of the United States are different from China's," Liu said. Domestic IPO requirements focus on company scale and financial strength, meaning that only a handful of companies can meet the targets. In the United States, those requirements aren't as stringent. The NASDAQ's OTC Bulletin Board, for example, does not have requirements regarding a company's assets, nor a minimum IPO number. As long as the company has more than 30 initial shareholders and a business blueprint of the next three to five years, they can seek IPO approval.

"U.S. investors focus more on the development potential of a company," Liu said. "They have their eye on the future, whereas we seem to focus on the present."

Liu said some mainland property companies have made a big mistake. "They want to trade on the U.S. main board directly to raise large sums of money and are reluctant to make IPO bids in the OTC Bulletin Board."

He said mainland companies must change their approach and mentality, otherwise these kinds of rash acts can hurt their sustainable development. The "get-rich-overnight" model might be attractive on the surface, but is harmful for the overall development of a company, Liu said.

Meng Hui, a researcher with Southwest Securities, stated that although the United States doesn't have strict IPO requirements, they have stricter requirements on the return of investment of listed companies. Mainland property companies are poor in cash flow and it is hard for them to maintain a steady profit.

Meng worries that the overseas listing of Chinese companies will lead to profit outflows from China and won't benefit the domestic economic development. He suggests that the government explore more ways to finance domestic companies.