Event: the company announced on April 17 that 1) the company intends to contribute 43 million yuan to jointly establish Yuntai Business with Yintai Business Management and Yuntai's enthusiastic partnership; 2) it intends to use the properties of subordinate companies as assets to issue commercial real estate mortgage-backed securities, the size of the issue does not exceed 3.6 billion yuan.
Investment for the establishment of Yuntai Business: 1) the company intends to jointly contribute to the establishment of Yuntai Business with Yintai Business Management and Yuntai enthusiastic Partnership, with a registered capital of 100 million yuan, of which the company contributes 43 million yuan, holding 43%, and Yintai Business Management contributes 32 million yuan, holding 32%. Yuntai enthusiastic partnership contributed 25 million yuan, holding 25%. 2) before the opening of the project, Yuntai Business mainly provides services such as "business consultation, design suggestions, development tracking, investment promotion agency, opening preparation", and charges "consulting service fee". After the opening of the project, it is managed in the form of "project rent" supplemented by "management fee + value-added income sharing". Among them, the commercial properties currently held by the company, Yintai Business Management and other newly established and newly purchased companies during the commercial existence of Yuntai. Priority will be given to Yuntai commercial management. 3) since the company entered the commercial real estate field in the past 16 years, the company has successively acquired the equity held by China Yintai Investment Co., Ltd., Tianjin Yinrun and other companies. The establishment of Yuntai Business will help the company to continue to operate its commercial part, further integrate existing resources and improve efficiency.
3.6 billion yuan CMBS try again: 1) the company intends to take the shopping malls owned by subordinate companies such as Hangzhou Xixi as the underlying assets and apply for the issuance of commercial real estate mortgage-backed asset-backed securities (CMBS) by means of asset-backed securitization.
If it is successfully issued, this will be the second time that the company has applied for and successfully issued the first nurturing CMBS in China on August 5, 17. 2) the size of the CMBS to be issued will not exceed 3.6 billion yuan, of which 14-2.1 billion yuan for Class A securities, 15-2.2 billion yuan for Class B securities, and 0.5-100 million yuan for Class C securities shall be considered for 18 years (3-3 years) or 24 years (3-3 years), with the original interest rate adjustment right, investor resale right and priority purchaser's acquisition right attached at the end of every 3 years. 3) CMBS is a kind of securitization financing tool of commercial property, which mainly issues asset-backed securities to investors on the basis of operating income such as rent and real estate value generated by commercial property, and is equipped with risk control measures such as property mortgage and rent pledge to ensure the principal and interest payment of asset securities.
As a form of asset securitization, both CMBS and Reits can help invigorate the stock, form a capital cycle and achieve fast turnover; but unlike Reits,CMBS, which still retains the ownership of assets, it can enjoy the appreciation of real estate value in the future. 4) CMBS is an attempt to diversify corporate financing forms, which is conducive to reducing corporate financing costs and optimizing financing structure; secondly, CMBS is the hub of commercial property destocking and light capitalization, and the company has entered the commercial real estate field since 16 years. While constantly expanding the influence of the commercial market and improving its own operating efficiency, CMBS or one of the ways for the company to pursue light asset operation strategy.
Investment advice: since entering the commercial market for 16 years, the company has made some achievements; the establishment of business management in Yuntai helps the company to uniformly manage its business part and form the effect of resource integration; and the exploration of CMBS helps the company to change its strategy of light assets and help to invigorate the stock. We expect the company's EPS to be 0.23,0.28,0.32 from 2018 to 2020, with a corresponding price-to-earnings ratio of 18.9X, 15.8X, 13.7X, respectively, and maintain a "buy-A" rating, with a six-month target price of 6.08yuan.
Risk hints: the real estate market is not as expected, the policy regulation is excessive, and the company's operation is not up to expectations.