UPDATE 4-China Evergrande plans backdoor Shenzhen listing of property assets

* Evergrande to list most property assets in Shenzhen after deal

* Shenzhen firm to issue shares, cash in lieu of property assets

* Evergrande shares jump 8.8 pct by midday (Adds analyst comments; updates share price)

HONG KONG, Oct 4 (Reuters) - China Evergrande Group plans to inject almost all of its property assets into a Shenzhen company, orchestrating a backdoor listing in mainland China aimed at boosting its valuation and making it easier for the heavily indebted company to raise any funds.

Evergrande said on Monday it will become the controlling shareholder of Shenzhen Special Economic Zone Real Estate & Properties (Shenzhen Real Estate) after the state-backed Shenzhen developer issues new shares and cash to an Evergrande subsidiary in exchange for China property assets.

Shares of Evergrande, China’s second-largest developer by sales and the country’s most indebted property firm, jumped 8.8 percent by midday on Tuesday, outperforming a flat broader market.

“We believe Evergrande and its property assets should be able to command a higher valuation in the A-share market amid mainland investors’ focus on sales and brand name,” Credit Suisse said in a note.

The brokerage estimated Shenzhen Real Estate could be valued at 200 billion yuan ($29.99 billion), which would be three times Evergrande’s current market capitalization of about $10 billion.

Evergrande, Dalian Wanda Group and other Hong Kong-listed Chinese developers are increasingly eyeing onshore listings as domestic funding costs fall. Mainland-listed firms also command higher valuations than those in Hong Kong, helped by a large pool of retail investors.

Wanda last month delisted its Dalian Wanda Commercial Properties from the Hong Kong stock exchange.

Guangzhou-based Evergrande said in a statement the deal would provide “an additional fund-raising platform” for it and “enable the market to assess the intrinsic value of the company positively and reasonably”.

Evergrande has captured investor attention after amassing some $57 billion in debt, almost six times its market value, on land acquisitions and corporate mergers.

It has bought shares worth $2.2 billion in rival China Vanke , putting itself in the middle of a high profile corporate battle. In April, it bought a majority stake in Shenzhen-listed Calxon Group, in a $553 million deal.

Evergrande may introduce strategic investment of up to 30 billion yuan into Shenzhen Real Estate, according to the statement. It also said the final issue price by Shenzhen Real Estate has not been determined yet.

Shenzhen Real Estate’s estimated core profit for the next three years is 88.8 billion yuan, it said.

The transaction is subject to approvals from shareholders and both Hong Kong and Chinese regulators, which, some analysts said indicates it was not a done deal.

JPMorgan said in a note that getting approvals could be tricky amid tightening on fund raising activities for developers in China. The structure may also irk offshore lenders to Evergrande, who might not accept an additional layer of holdings of the real assets, it said.

Shares of Shenzhen Real Estate, which has a market capitalisation of about $1.6 billion, have been on a trading halt since Sept. 14. ($1 = 6.6685 Chinese yuan renminbi) ($1 = 7.7554 Hong Kong dollars) (Reporting by Clare Jim; Editing by Edwina Gibbs and Muralikumar Anantharaman)