9 Public Reits Listed For The First Time: The Collective Rise Turnover Exceeded 1.8 Billion Yuan, And The Medium And Long-Term Value Was Determined By The Underlying Assets

On June 21, the public offering REITs ushered in its IPO debut.

At the beginning of the trading, 9 public offering REITs rose collectively, ushering in a good start. Among them, Shougang green energy rose 20%, Yangang REIT and Shekou Industrial Park rose 10% respectively, and investors' enthusiasm was high.

By the end of the afternoon, the total turnover of the first batch of public offering REITs reached 1.860 billion yuan, of which n-plos ranked first with 305 million yuan, and Yantian REIT had the smallest transaction amount of 120 million yuan.

Although all of the nine REITs were traded at a premium, the overall rise and fall were quite differentiated. For example, Shekou Industrial Park increased by 14.72%, while Guangzhou Guanghe only slightly increased by 0.68% compared with the issuers.

"REITs is a very good investment configuration." Kong Lingyi, chief investment officer of Shenzhen Venture Capital real estate fund management (Shenzhen) Co., Ltd., told the 21st century economic reporter: "at present, China's REITs market has just started, and the market still needs to be expanded. When the REITs market reaches a trillion yuan scale, it is believed that it will become the asset selection for mainstream investment institutions to allocate large categories of assets."

A researcher from a securities firm in South China believes that compared with the project valuation, many REITs are issued along the lower limit of the quotation range, so there will be a large increase after listing. However, after short-term speculation, the medium and long-term trend will be obviously differentiated, and even trade at a discount. Therefore, investors are reminded to pay attention to the risk of speculation in the early stage.

Shekou Industrial Park led the rise by 14.72%

On the first day of listing, 9 infrastructure REITs realized premium trading. Specifically, Shekou Industrial Park and Shougang green energy increased significantly, reaching 14.72% and 9.95% respectively. N Zhangjiang REITs, n Zhejiang Hangzhou Hui, n capital, Yantian teit and N plus rose by more than 2%, 5.89%, 4.97%, 4.95%, 2.91% and 2.11%, respectively. The growth of nsuyuan and Guangzhou Guanghe was less than 1%, 0.7% and 0.68% respectively. It is worth mentioning that the lowest price of nsuyuan was 3.876 yuan / share, which was lower than its issue price of 3.88 yuan / share.

"The quality of the project is good and the income expectation is stable." Industry insiders believe that Shekou Industrial Park not only has high-quality underlying assets, but also has a higher price rise than the project valuation.

The reporter of 21st century economic report also learned that during the inquiry period, Shekou Industrial Park is most popular with institutions, with an overall subscription multiple of 15.31 times.

According to the data, the underlying assets of the REIT in Shekou Industrial Park include Wanrong building and Wanhai building in Shekou Wanggu, which were completed in 2014 and have been in operation for about six years, with building areas of 41700 square meters and 53600 square meters respectively.

At the same time, the corresponding dividend sources of REITs in industrial parks include the rise of rent and assets, and the rent mainly considers the full rent rate and rent level. According to the recruitment brochure of Boshi Shekou Industrial Park REIT, by the end of 2020, the rental rates of Wanrong building and Wanhai building were 84% and 94% respectively.

In terms of the amount available for distribution, the predicted distributable amount of the fund in 2021 and 2022 is 91.3457 million yuan and 92.672 million yuan respectively; The net cash flow distribution rate was 4.10% and 4.16% respectively.

Guoxin Securities believes that the first batch of public REITs underlying assets are relatively high quality on the whole. Through the "stock + debt" capital weakening, it can achieve a certain degree of tax saving and make the dividend basis closer to free cash flow. According to the issue price, the cash flow distribution rate in 2021 is between 2.99% and 9.58%, which is attractive as a whole.

Medium term or discount transaction

As a new type of investment, the limit of rise and fall of public offering REITs on the first day of listing is 30%. Therefore, many institutional people suggest that investors pay attention to risks.

GF Securities collates the performance of Hong Kong REITs after listing, which provides reference for domestic infrastructure REITs investment.

As of June 18, 2021, there were 13 REITs in Hong Kong, with a total market value of HK $265.2 billion. Among them, the three REITs listed in Hong Kong in 2005 (lingzhan real estate fund, Hongfu Industrial Trust and Yuexiu real estate trust fund) showed a higher increase in the closing price than the initial price on the first day of listing, which were 14.56%, 20.37% and 13.82% respectively.

Since then, REITs, which have been listed on the market, have broken out and become normal.

There are two reasons. One is that REITs listed in Hong Kong in 2005 have the first effect. Investors pursue new investment varieties and then push up the price on the first day of listing. On the other hand, compared with the domestic market, the stock exchange of Hong Kong stock exchange is more common. With the decline of the popularity of REITs, the listing of REITs is similar to the listing of companies, and the situation of breaking is increasing.

Therefore, GF Securities believes that investors are enthusiastic about the listing of domestic infrastructure REITs. For a period of time after listing, the price of infrastructure REITs may also be similar to the performance of Hong Kong REITs at the initial stage of listing, showing a rise first and then a decline. It is not ruled out that the market value is lower than the asset valuation.

Wells Fargo also said that public REITs were favored by allocation funds at the time of issuance, but it does not mean that they will still be recognized by trading funds after listing and trading. For example, some public funds with a long period of closure have received a large amount of capital subscription at the time of issuance, and even started the confirmation of proportional placement. However, after listing, due to the long closing period and high time cost, they may still trade at a discount.

Therefore, there is no basis to deduce that the secondary market price will rise after listing from the recognition when the public offering REITs are issued, and the transaction price of public REITs secondary market should be treated rationally.

An analyst of Huatai Securities also believes that there is a high probability of new speculation at the initial stage of listing, especially for the small-scale, unique name and high dividend payout rate varieties. But in the medium term, the overall pricing is reasonable, and the common discount trading problems of closed-end funds are worth paying attention to. Therefore, it is suggested that the successful investors should actively grasp the cash opportunity at the initial stage of listing, and long-term investors should wait for the allocation opportunity after the market sentiment cools.

Prices are determined by underlying assets and market transactions

The listing of the first batch of public REITs makes the transaction price of secondary market come into being.

It is generally believed that the market price of REITs is determined by the underlying assets and market transactions. Excluding the short-term market speculation, the medium and long-term value of REITs is mainly determined by the underlying assets.

According to Guoxin Securities, due to the low possibility of significant changes in the valuation of the underlying assets of the first batch of public offering REITs and the value destruction similar to that of some companies, the value of the underlying assets can be taken as the lower limit of the value of REITs. As for the upper limit, it is mainly determined by the dividend yield of REITs, which should not be significantly higher than the maturity yield of high-grade bonds.

Generally speaking, infrastructure public offering REITs can be roughly divided into property rights and management rights.

The income of REITs can be divided into dividend income and value-added income, reflecting cash distribution and value change of assets respectively. For the property rights REITs such as warehousing logistics and industrial parks, in addition to dividend yield, the future rent growth may also bring the appreciation of underlying assets; The value of operating rights of REITs similar to expressways is mainly dividend income, and the value of operating rights will decrease year by year until the final value returns to zero, so the embodiment of value-added income may not be obvious.

Huatai Securities believes that, from the perspective of long-term investment value, property rights projects are based on the value of underlying assets themselves and have growth potential. Therefore, they have stronger equity nature and need to focus on the asset value growth potential of specific projects.

The income REITs are more similar to the fixed income products of ultra long term or even perpetual bonds. Due to the lack of guarantee for the value increment of underlying assets, and considering the mismatch between the duration of franchise rights and the duration of funds, the future growth of fund valuation is not good.

Therefore, Huatai Securities believes that the logistics park project and the three industrial park projects are more like growth stocks in the stock market, with high long-term investment value.

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