Event description

Gree submitted a preliminary plan to purchase 100% shares of Zhuhai tax-free Enterprise Group Co., Ltd. (hereinafter referred to as tax-free group) held by Zhuhai SASAC and Zhuhai Urban Construction Group Co., Ltd by issuing shares and paying cash. At the same time, general technology group investment management co., Ltd. (hereinafter referred to as general investment), a subsidiary of china general technology (group) holding co., Ltd., raised no more than 800 million yuan of matching funds in the form of a non-public offering of shares

After Gree creates the tax-free core plate and enjoys the passenger flow dividend in the Great Bay area, Gree Real Estate is committed to building large-scale listed companies with tax-free business as the core of large-scale consumer industry, biomedical health industry and real estate industry. This transaction will inject tax-free business with strong profitability and broad prospects for development into the company.

Zhufen is the duty-free leader of the port, and Guangdong-Hong Kong-Macau Greater Bay Area has a significant advantage in passenger flow under the construction.

Guangdong-Hong Kong-Macau Greater Bay Area's passenger flow advantage has laid a good foundation for the development of Zhumian. At present, Pearl operates four port duty-free shops: Gongbei Port duty-free shop, Jiuzhou Port duty-free shop, Hengqin port duty-free shop, Zhuhai-Macao cross-border industrial zone port duty-free shop and Tianjin Binhai Airport duty-free shop.

To guide the return of overseas consumption into an important national policy strategy, the development of domestic tax-free industry has become an important way. Due to the impact of tariffs and other costs, there is a large price gap between domestic and overseas duty-free goods, coupled with commodity categories, shopping experience and other factors, resulting in serious consumption outflow. Although China has become the world's main source of tax-free consumption, China's duty-free market is still relatively small, with a market size of about 39.5 billion yuan in 2018. How to promote the return of overseas consumption is a key issue in the development of China's tax-free industry. In recent years, the national government has repeatedly issued a large number of policies to reduce tariffs and guide the return of overseas consumption, which is beneficial to the development of duty-free industry.

At present, the domestic duty-free industry is dominant, but the policy is gradually liberalized, and the policy of tax exemption on outlying islands and stores in the city may usher in a greater opening in the future.

Investment suggestion

Given a "buy" rating, after the completion of the acquisition, it is estimated that the overall reasonable market value of the company is 345-38 billion, which is still a lot of room for improvement compared with 23.8 billion at the present stage.

Risk hint: epidemic rebound: macroeconomic decline; fierce competition in the industry; the acquisition can not be implemented smoothly; gross profit margin is declining