Dynamic duo

16 January 2017 By Robyn Mak Follow @mak_robyn

Property developer Sunac is ploughing funds worth more than half its market value into the overstretched TVs-to-electric cars group led by billionaire Jia Yueting. The partnership makes Jia’s earlier pledge to slow down sound unconvincing, and could lead Sunac astray too.

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Chinese technology conglomerate LeEco secured a new round of investment worth 15.04 billion yuan ($2.2 billion) from property developer Sunac China Holdings, according to filings made by Sunac on Jan. 13.

Sunac Real Estate, an indirect wholly owned subsidiary of the Hong Kong-listed group, will invest 6.04 billion yuan in LeEco's Shenzhen-listed unit, Leshi Internet Information and Technology, for an 8.61 percent stake.

Sunac Real Estate will also invest 1.05 billion yuan in LeEco's film production company for a 15 percent stake, as well as an additional 7.95 billion yuan for a 33.5 percent stake in another Leshi subsidiary that makes smart internet-connected TVs.

In November, LeEco's founder and chairman Jia Yueting said in an internal letter to staff that the company was facing financial obstacles due to the rapid pace of growth in various businesses, including electric cars, cloud technology and smartphones.

Shares of Leshi were up 8.4 percent to 38.80 yuan by mid-morning Hong Kong time on Jan. 16. Shares of Sunac China Holdings were down 8.8 percent to HK$6.65.

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