Country Garden Services Nearly 4 Billion HK Dollars Behind The Issuance Of Yang Huiyan'S Capital Operation And 100 Billion Market Capitalization Road

As the Hong Kong stock market is currently the highest value of the property market, Biguiyuan service Holdings Limited (hereinafter referred to as "country garden service") once again raised the ripple of the capital market.

A few days ago, in the case of cash abundance, country garden services issued convertible bonds up to nearly HK $4 billion, which is the second time since its listing in 2018.

The purpose of financing may have been a potential acquisition target. In the past two years, M & A is an important means of scale expansion for Wuguan company, which serves the issuance of the debt, or will carry out the merger and acquisition activities under the impact of the epidemic, and continue to stir up the competition pattern of the property market.

In the capital market, a number of developers have split their properties. In just over a year, Biguiyuan service has become a leading company with nearly 100 billion revenues and a market value of nearly 100 billion.

This is inseparable from the capital operation behind it. Yang Huiyan, the co host of Biguiyuan and her team, is the same as her father.

Yang Huiyan's innovation experimental field

Second large scale financing activities of Biguiyuan services sparked market concern.

According to the announcement, Biguiyuan service and its wholly owned Affiliated Companies Best Path Global Limite issued a HK $3 billion 875 million zero interest convertible bond, led by the UBS AG Hongkong branch. The conversion period is 1 years, the initial conversion price is HK $39.68 per share, the issue premium is 11%, convertible shares account for about 3.59% of the company's existing issued share capital, and 3.47% after conversion and dilution.

For the purpose of issuing bonds and proceeds, Country Garden Services clearly indicated that the net proceeds would be used for future potential M & A, strategic investment, working capital and general purpose of the company.

Although the company has not yet identified specific targets for acquisitions or strategic investments, it will closely monitor the group's business and market conditions, but in the case of ample cash, it has nearly 4 billion debt issuance.

Biguiyuan service is one of the new businesses led by Yang Huiyan, chairman of the joint venture of Biguiyuan. Yang Huiyan is the controlling shareholder of the company, holding 53.53%.

Backed by Yang's family, the company has been developing rapidly in recent years. Since its listing in June 2018, Biguiyuan service has become the highest listed Property Management Company in Hong Kong stock exchange. The latest market value is HK $98 billion 500 million, or about 89 billion 600 million yuan.

Although the country's garden area has increased continuously from third sides, and its share has also continued to rise, the contribution from the third party developers has increased from 3.5% at the beginning of the year to 11.4% at the end of 2019. However, in the overall revenue structure, the main revenue of Biguiyuan services still depends heavily on the properties developed by the Biguiyuan group.

In order to break away from this dependence, on the one hand, country garden service has been trying to expand diversified businesses in recent years, and even cross-border insurance business.

Since April this year, Biguiyuan service is also expected to take up about 10% of the fortune of the company, with an offer price of HK $1.5 per share, a premium of 7.14% before the suspension. If the transaction is completed, the country garden service will act as a concerted action with the Fu Fu brilliant chairman, Wei Wei Cong, holding a 50.49% stake in the company and holding a controlling position.

This is not the first time that Fu Fu has come to accept the game of collecting and receiving games from country garden service. The Hong Kong Union real estate acquired by Biguiyuan service last year was owned by 85.5% of the company's brilliant holdings, and the two party obviously had close ties.

Behind these moves, country garden service has the intention to make up short business and improve business structure. In the Maori structure, community value-added services account for a relatively high proportion, which is an important factor in the quality of earnings and the sustainable development of the future.

On the other hand, M & A has always been a weapon of scale expansion for the Wuguan company. The country garden service is also looking for potential acquisition targets to enhance its management area, and the company acquired 5 Property Management Company continuously.

Last year, Country Garden Service bought 100% of the real estate services of Hong Kong Union at 375 million yuan, acquired 100% equity in the city of Kacai city with 173 million yuan, plus a number of other property companies purchased from third to 453 million yuan, which cost about 988 million yuan, and the area of contract management increased by 40 million square meters.

According to the financial report, as at the end of last year, the total bank deposits and cash in country garden services were 6 billion 926 million yuan, the net cash income from operating activities was 3 billion 257 million yuan, and the net cash earned from operating activities was 1.9 times the net profit of that year. Cash in hand has been quite sufficient, and the cash balance of Biguiyuan services will exceed 10 billion yuan after issuing bonds.

Disputes over property owners

In recent years, with the real estate entering the era of stock competition, property service companies have begun to go out from behind developers, and have been flying alone or even spin off.

Last year, the most notable acquisitions in the property sector included the acquisition of China life property, the new China civil property, the acquisition of Chongqing new fortune by the poly property company, the reorganization of the two central enterprises, the China Aviation property and the China Merchants property reorganization, and the development of the world trade cooperation in the acquisition of the Hai Liang property and the three far property.

In 2020, under the impact of the epidemic, community epidemic prevention highlighted its importance, and property became a growing industry of concern.

The epidemic led to the service of country garden services, and the potential window for mergers and acquisitions was observed. Li Changjiang, general manager of the company, said at the performance meeting in March that the property industry was still very scattered and concentrated at a very low level, especially during the recent epidemic, and that the opportunities for M & A were earlier and more.

Li Changjiang said bluntly: "with regard to the current cash volume of the company, it is possible to reach the acquisition target without meeting the super standard. Unless there is a super scale, our cash will not be enough. " Wang Yingwu, chief marketing officer, also made clear that the company's first priority in the whole epidemic period was the acquisition of mergers and acquisitions.

Although Biguiyuan service has the highest market value at present, the old and new forces have been stirring up the overall pattern of the industry.

Following the first batch of Hong Kong listed property companies such as Choi life, Zhonghai property, and Greentown services, it was recalled that in 2019, another 7 housing companies pushed their properties to the Hong Kong stock exchange. By the end of last year, there were 19 listed companies in Hong Kong stock market outside 3 A share listed companies.

As regards the area of management, as of the end of last year, a total of four listed property management companies broke through 200 million square meters, including poly property, country garden service, elegant living service and Greentown service, which were 2.86, 2.76, 2.34 and 212 million square meters respectively.

At present, apart from country garden services, poly property, elegant life services, Greentown services and Zhonghai properties are strong in scale and revenue, and their market capitalization is over ten billion.

On the scale ladder, Vanke, Hengda, and Chong Chong's property companies have not yet appeared in the capital market, but this has not stopped their expansion.

Take Vanke property as an example, in 2019, Vanke property business income 12 billion 700 million yuan, an increase of 29.7% over the same period, accounting for inter divisional sales, operating income of 14 billion 290 million yuan, has exceeded the country garden service.

After buying 4.9% of Dead Leung Ban's shares in the initial public offering pricing system in 2018, Vanke property in 2019 set up a joint venture with Dead Leung Ban to set up commercial property services.

Vanke property is a strong competitor of Biguiyuan service. Yu Liang, chairman of Vanke's board of directors, once said that Vanke property should be considered in the market if it had to achieve 100 billion market capitalization.

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