Why Reits can improve asset valuation we think first lies in the improvement of asset liquidity; secondly, it lies in the value manifestation of cash flow advantages such as depreciation and amortization. This leads us to wonder whether a deterministic company can use another value revaluation method. If the overall valuation of the initial shares is reconstructed according to the valuation of the initial REITs project, when the IRR is 6%, the overall valuation of the initial shares is expected to be 40.1 billion yuan, which is 1.8 times the current market value of the initial shares (22.2 billion). Valuation reconstruction will have a great impact on the overall value judgment of pioneering shares and even sewage treatment franchising enterprises, and the new investment value will appear from a new perspective.
Thinking caused by the issuance and pricing of the REITs project pioneered by rich countries. After the release of the first batch of projects, the public subscription ratio of the first water REITs project in rich countries reached 63 times, ranking first among the 9 public REITs funds. The project has a net asset of 768 million in 2020, an expected profit of 65.536 million in 2021 and an internal rate of return of about 6 per cent. The fund issued 1.85 billion, the inquiry corresponding to the project PE is 28 times (2021), PB is 2.4 times (2020), far higher than the current initial shares of PE12.5 times (2021), PB0.87 times (2020). The big difference between the REITs project pricing and the secondary market stock pricing causes us to think: what is the pricing basis of the project, what is the trend of the project after listing, and whether the pricing of the REITs project will have an impact on the overall value pricing of the original shares? this is the main issue that we will discuss later.
Through evaluation and calculation, it is found that the income of the first REITs project in rich countries and the certainty of cash allocation are extremely high. Through the split calculation, it can be found that the operating income of the sewage treatment project corresponding to the rich country's first REITs fund is affected by the water treatment capacity and water price, while the water treatment capacity is directly related to the number of residents and stable, and the water price remains stable without bid raising and transformation, so the income is very certain. Its cost includes pharmacy, electricity, maintenance and so on, which is basically stable under normal circumstances. Expenses, taxes, depreciation and amortization are also relatively certain. Therefore, the yield certainty of the first REITs project is very strong, which can be compared to the level of treasury bonds. Based on 1.85 billion of fund issuance, according to the company's forecast, the projected cash distribution rates for 2021 and 2022 are 8.7 per cent and 9.1 per cent, respectively, while the corresponding internal rate of return is about 6 per cent.
The valuation range after the listing of the first REITs project in rich countries is evaluated from the perspective of liquidity and certainty.
From a deterministic point of view, the return of the rich country's first REITs project is extremely certain; as a publicly tradable REITS project, the expected rate of return of IRR should be determined by a wider range of ordinary trading participants. At the same time, in terms of liquidity and certainty, we believe that the yield expectation of the first REITs project can be compared with the yield of long-term treasury bonds and money funds, then the valuation expectation of listing can be compared with 2.32 billion of 3.15% of 10-year treasury bonds and 2.56 billion of the average yield of money funds, with a corresponding valuation range of 23.2-2.56 billion.
According to the valuation of the REITs project, the discussion of the market value evaluation after the reconstruction of the operating assets of the first shares: the greater purpose of this paper is to discuss the guidelines for the overall valuation reconstruction of the first shares after the listing of the reits project. If from the perspective of capacity scale analogy, the total market value of the first share "water + solid waste" in operation + future production is expected to be 63 billion yuan. From the IRR point of view of the current project, when the IRR is 6%, the overall valuation of the project is 36.8 billion. Considering that the initial share still has 330 million yuan in engineering profits in 2020, assuming that it corresponds to 10 times the valuation, the overall inquiry valuation is 40.1 billion yuan, which is 1.8 times the current market value.
Risk hints: the risk of policy change, the risk of untimely adjustment of water prices leading to changes in profitability, and the impact of valuation changes brought about by price changes after the listing of REITs funds.