Dongbai Group announced that it plans to transfer its 100 per cent stake in three warehousing and logistics projects to a wholly owned subsidiary of Link Real Estate Investment Trust (00823.HK). The deal is expected to increase the company's 2022 net profit by 140 million yuan.
It is proposed to transfer three warehousing and logistics projects, which is expected to increase the annual return net profit by 140 million yuan. The company announced that it intends to transfer its 100 per cent stake in three warehousing and logistics projects to a wholly owned subsidiary of Link Real Estate Investment Trust (00823.HK). The three projects are Jiaxing Wangdian, Changshu Kainan and Changshu Kaibei warehousing and logistics projects, with a total construction area of about 192100 square meters. Among them, the construction area of Jiaxing Wangdian project is about 99300 square meters, the construction area of Changshu Kainan project is about 23800 square meters, and the construction area of Changshu Kaibei project is about 69000 square meters. At present, both the Jiaxing Wangdian project and the Changshu Kainan project have been completed and have entered a stable operation stage. This transaction is expected to increase the company's net profit by about 140 million yuan in 2022. After the transfer, the company will continue to provide operation and management services.
Practice the closed-loop operation mode of "investment-construction-recruitment-retreat-management" again. In 2018, the company reached a strategic cooperation with Blackstone Group Inc Group of the United States. by 2021, the company has sold 80 percent of its shares in four projects totaling 500000 square meters to Blackstone Group Inc Group of the United States. the company continues to be responsible for the asset management of these projects and collects management fees.
The cooperation with the leader once again practices the closed-loop operation mode of "investment-construction-recruitment-withdrawal-management", and the cooperation with well-known funds also reflects the recognition of the company. By the end of 2021, the company has a warehouse construction area of 1.84 million square meters, of which 420000 square meters have been completed and 920000 square meters are under construction. according to the progress of construction, it is expected to continue to release increments in the next three years. On the one hand, the company's own assets will contribute to rental income, on the other hand, this form of cooperation with well-known funds is expected to continue to operate and increase investment income.
Maintain the "highly recommended-A" investment rating. The company takes commercial retail and warehousing logistics as its two main businesses, and we expect the commercial retail business to maintain steady growth, while the warehousing logistics business will enter the fast lane with the release of the company's reserve area. In the first quarter of 2022, the company's revenue slightly decreased by 0.9% to 510 million yuan compared with the same period last year, and its net profit increased slightly by 0.1% to 30.195 million yuan compared with the same period last year. We maintain our profit forecast and estimate that the net return profit for 2022-24 will be 260,000,000 yuan respectively. Based on: 1) benefiting from downstream demand, warehousing logistics, especially high-bid warehouse demand growth; 2) the company's warehousing and logistics reserve area is expected to release in the next three years, the company's warehousing and logistics business has entered a high-speed development channel; 3) the company's valuation is expected to be close to the valuation of the logistics real estate industry, maintaining the company's "highly recommended-A" rating.
Risk tips: offline consumption is not as expected; warehousing and logistics demand is not as expected; the company's warehousing logistics reserve release is not as expected.