Main points of investment
South China duty-free leader plans to inject Gree Real Estate: Gree Real Estate announcement reveals that the restructuring plan intends to issue shares and pay cash to Zhuhai State-owned assets Supervision and Administration Commission and Urban Construction Group to buy 100% shares of Zhuhai Free Group and inject tax-free business into the company; at the same time, the introduction of strategic investors backbone general technology subsidiaries of central enterprises, and supporting financing of no more than 800 million yuan. The offering price is 4.30 yuan per share, with reference to the Hai-free M & A case, assuming that the restructuring is carried out at 15 times PE valuation and 75% equity payment, and that supporting financing is carried out according to the upper limit, then a total of about 1.97 billion shares need to be issued. If the restructuring is successful, the tax-free sector of the capital markets will add new strength.
Zhujiang Free Group ploughs Zhuhai deeply and looks forward to the national layout: Zhujiang Free Group originated in 1980, integrates tax-free, tax-free and bonded business, and has a rare duty-free business license. Zhuhai is free of deep ploughing, has the largest land port Gongbei port duty-free shop, Hong Kong-Zhuhai-Macao Bridge duty-free shop and other port duty-free shops, and looks forward to the national layout at the beginning of Tianjin Airport. The revenue in 2019 is 2.669 billion yuan, and the tax exemption is expected to contribute 22-2.5 billion yuan, second only to China exemption. Combined with the characteristics of duty-free at the port, the beads are mainly high gross profit tobacco and alcohol categories. In the future, under the expectation of the development of the Bay area and the expansion of old stores and the opening of new stores, the growth of duty-free business is expected.
Pearl exemption benefits from the advantage of deducting rent, and its profit margin is significantly ahead of the industry: Pearl Free Group has the right to continue to operate Gongbei and Kyushu Port, and the rent rate is less than that of its peers. Benefiting from this, the bead-free stable net interest rate exceeds 25%, which is significantly higher than the industry average. At the same time, after joining hands with Gree Real Estate, the rental ratio of Hong Kong-Zhuhai-Macao Bridge stores is expected to further decline from 2020. With the upgrading and optimization of the supply chain structure and the further implementation of Xiang Hua's independent procurement strategy, it is expected that there is still room to improve profit margins and outstanding profitability.
Gree Real Estate has created a "32nd" industrial pattern with steady growth: Gree Real Estate was listed in a backdoor listing in 2009. after 10 years of development, it has established a "32nd" industrial pattern with real estate, port economy and marine economy superimposed by modern service industry and financial industry. In 19 years, the revenue was 4.193 billion yuan (yoy+36%) and the net profit was 526 million yuan (yoy+3%). Under the background of the epidemic, we will accelerate the layout of the large health field, and plan to acquire 18.63% of the shares of 002022.SZ. In the future, we are optimistic that Gree Real Estate will join hands with Pearl Free Group and General Investment to create a large consumption characterized by duty-free business, a large health industry that can be developed and a group company driven by the real estate industry that adheres to the route of high-quality real estate.
Profit forecast and investment rating: if the restructuring is successful, driven by the tax-free business, taking into account the short-term impact of the epidemic, it is estimated that the combined revenue in 20-22 years will be RMB 4.88 billion 82.1 billion RMB, respectively, and the return net profit will be 7.6 pm RMB 1.83 billion RMB 2.57 billion respectively. Assuming that the restructuring is carried out according to the proportion of 15 times PE and 75% equity payment, and assuming that supporting financing is carried out according to the upper limit, then the total equity after the reorganization is about 4.031 billion shares, then the current pro forma market value is 45.8 billion yuan, of which, according to the RNAV valuation, the reference market value of the real estate sector is about 11.9 billion yuan; the implied tax-free sector market value is about 33.9 billion yuan, corresponding to 36 times the 21-year tax-free profit PE. Taking into account the future profit margin enhancement potential of the duty-free sector, the growth of passenger flow brought about by the location advantage of the Great Bay area, and the expectation of duty-free shops in the island and the city, there is still room for improvement in valuation, covering the "buy" rating for the first time.
Risk hints: the possibility of failure in this asset restructuring; the uncertainty of the re-entry process; the risk of acquisition and integration; repeated macroeconomic fluctuations brought about by the epidemic; and possible fluctuations in local policies.