This report is read as follows:

Hanyang District SASAC injects asset support companies to become bigger and stronger

The issue price of 6.32 yuan has become a low price event: the Han Shang Group has issued a targeted additional offering announcement. The content of the announcement is: the company intends to issue A shares to the major shareholder, Hanyang District SASAC, to purchase the five cases of state-owned land use rights and their land attachments that it intends to inject. The initial estimate of the five assets is 150 million yuan, and the initial issue price is 6.32 yuan per share. Except for one site, 215 Parrot Avenue, which will be used for residential land development, the other four land companies will be used for commercial and financial land development. The shares subscribed by the State-owned assets Supervision and Administration Office of Hanyang District shall not be listed for trading or transfer within 36 months from the date of completion of the issue.

Comments:

The basic situation of the company. The company insists on promoting the transformation from the traditional retail industry to the modern service industry. at present, the company's development strategy is to vigorously develop the real estate industry, strengthen the retail industry and the convention and exhibition industry, and strive to form the interactive development of the retail industry, the convention and exhibition industry and the real estate industry. tourism, sports and leisure industries are supplemented, and commodity management, asset management and capital management promote each other. The revenue of the company in 2008 is 593 million yuan, and the net profit belonging to the parent company is 5.56 million yuan, which is the smallest among the four listed companies in Wuhan. In terms of the income structure in 2008, retail accounted for 90%, while tourism and exhibition accounted for 10%.

This private placement is that major shareholders inject 150 million yuan worth of state-owned land use rights and aboveground attached crops into listed companies for residential and commercial property development, which is in line with the company's development strategy. It shows the supporting attitude of the major shareholder Wuhan Hanyang District SASAC to the company. The development of commercial real estate projects can not only alleviate the operating pressure caused by rising rents of retail enterprises, but also obtain the benefits brought by property appreciation.

As the subject matter of this transaction is the right to the use of state-owned land and its land attachments, these assets themselves do not constitute an operating business, nor do they belong to a complete operating entity, so their historical profit data cannot be obtained. At the same time, the asset evaluation and profit forecast related to the subject matter of this transaction have not yet been completed, and after such work is completed, the board of directors of the company will make a detailed disclosure on the impact of this transaction on the company's profitability. Therefore, we will not give the impact of asset acquisition on the company's profits for the time being, and then analyze it in detail after the private placement plan is officially released.

After the completion of the private placement, the company will operate residential real estate projects, commercial real estate projects, as well as retail, put forward higher requirements for the company's management capacity, the company is also facing greater financial pressure. It does not rule out that the company still has refinancing needs to operate real estate projects in the future.

On the whole, we feel that since January 2009, SASAC has been very positive in supporting listed companies in the commercial sector to become bigger and stronger. It is characterized by the frequent occurrence of capital operations such as state-owned assets withdrawal, asset injection and asset restructuring of listed companies. The Hanshang Group incident actually reminds us to pay attention to other companies with the same subject matter, such as New World, which is promised to inject assets in Huangpu District of Shanghai, Bailian shares and Friendship shares expected for asset integration, as well as three other listed companies in Wuhan with restructuring themes, such as E Wu Shang, Wuhan Zhongbai and Wuhan Zhongshang, as well as the asset injection of Chongqing Department Store under Chongqing Trading Company.