Optimistic About Property Valuation Of Hong Kong Stock Market Going Up
Since the beginning of this year, the valuation of the property sector of the Hong Kong Stock Exchange has risen, which has stimulated real estate companies to split their properties and go public. In late October, real estate developers Hejing Taifu and Shimao Group promoted the listing of their property sector. After listing, they are expected to become the sixth and third largest property stocks in Hong Kong stock market. On October 20, Shimao services, which was split up by Shimao Group, was offered on the Hong Kong stock exchange, with a plan to raise HK $10.12 billion; and from October 19, Hejing Youhuo, which was split up by Kingtech, was also offered, with a planned capital raising of HK $3.12 billion. On its first day, the Hong Kong allotment was over subscribed by 24 times, and the international placement was also oversubscribed, which means that it is only one step away from the successful listing.
Prior to that, rongchuang property, China Resources and Evergrande property, which were separately offered by rongchuang, China Resources and Evergrande, also submitted their listing applications to the Hong Kong Stock Exchange on August 6, August 31 and September 29, respectively, and are waiting for the hearing of the Hong Kong stock exchange.
All media reporters of Southern finance and economics have noticed that with the continuous rise in the share price of the property sector of the Hong Kong stock exchange, the value of some property stock markets is already equivalent to the sum of several real estate stocks. At present, the market value of a country garden property company is equal to the sum of Xuhui, Yajule and new town development, and the sum of Fuli, green city, jiazhaoye and Yuexiu. Some analysts point out that the tightening of regulation and the change of financial policies make the investment in real estate stocks uncertain; while the business structure of property companies is simple, and "sitting on the ground to collect rent" makes it have a higher valuation level. Under the pressure of capital, real estate companies have split the property plate listed as a financing strategy.
Property stocks continue to drive the plate soaring
In the past few months, the property companies in the HKEx have been constantly "upgraded", including Yincheng life service, Hongyang service, Xingye Wulian, Xinyuan service, Financial Street property, Yixing group, poly property, and excellent business enterprise services. The intensity of property companies' rush to the stock market has attracted market attention, which has led to the inflow of funds and made the relevant stocks rise significantly.
As of October 20, Country Garden Service rose from HK $25.2 per share at the beginning of the year to a recent high of HK $56.5, up 124%; jiazhaoye Meihao's share price hit a record high of HK $39.4 in June, 320% higher than its issuance price of HK $9.38 in December 2018; the share price of ajuile's yashenghuo reached a record high of HK $48.55 per share in July, up 83% from the beginning of the year.
According to the statistics of all media reporters of Nanfang finance and economics, at present, many large real estate enterprises have completed the split property listing, including country garden, Yajule, poly, green city, Zhonghai, huabiannian and jiazhaoye, and the property companies under Hejing Taifu, Shimao, Hengda, rongchuang and Huarun are waiting to be listed. At present, the large-scale real estate enterprises that have not yet publicly listed include Vanke, Longhu, Fuli and Yuexiu.
Based on the closing price on October 20, the property sector of Hong Kong shares has gained a considerable high market value. The market value of country garden services is more than HK $135 billion, which is similar to the market value of rongchuang in China, and even much higher than that of real estate developers such as Shimao, Xuhui and Yajule. In the property sector, the market value of six companies has exceeded HK $10 billion, including country garden service, elegant life, poly property, green city service, China shipping property and outstanding commercial enterprises.
The increase of market value is mainly related to the high P / E ratio of property stocks. The static P / E ratios of country garden service, elegant life, poly property, green city service, Zhonghai property and excellent commercial enterprises reached 73 times, 33 times, 56 times, 56 times, 37 times and 67 times respectively. In contrast, a number of large real estate stocks are under pressure, such as Yajule, rongchuang, country garden, poly, jiazhaoye, etc., with static P / E ratios of only 2-5 times.
Guoxin Securities earlier issued research reports that the property sector overvalued with three major support. First, the property management industry has a high rent renewal rate, which is equivalent to "sitting on the ground to collect rent", which is the root cause of the high valuation; second, in the short and medium term, the revenue growth of the property sector is expected, and the dynamic P / E ratio calculated on this basis will be slightly lower, which will stimulate the stock price to continue to rise; third, the continuous rise in the human cost of customer service of property management companies, coupled with the huge stock of real estate, means that there is a stronger "revenue" The "rent" ability brings the imagination space of the plate.
"Financing" is the driving force of split listing
Under the continuous decline of stock price, the valuation of real estate companies is still likely to be compressed. However, the growth rates of Zhaoli real estate and its overseas branches were 25.5%, 2.5% and 2.5% respectively.
Real estate, property prices "ice fire two days", so that real estate enterprises can not help. The low stock price of real estate limited the willingness of shareholders to make allotment and pledge, resulting in the loss of financing function of the stock market. If the property sector is separated, the financing function can be partially restored. Only by obtaining financing can the real estate enterprises continue to survive in the competitive market.
In Shimao Group's announcement on the spin off of Shimao services, we can see that Shimao's major shareholders are eager to let the property regain its financing function. Shimao Group said that the split Shimao service can directly carry out equity and debt financing in the capital market, and is more capable of attracting strategic investors.
On the one hand, it reflects the impact of the epidemic on market sales, on the other hand, it reflects investors' worries about policy uncertainty. Mr. Zhang pointed out that the real estate sales volume of Anbo Real Estate Research Institute was not significantly affected by the real estate market in southern China at the beginning of the year. In terms of financial policy and investment policy, there are changes in the policy. According to the 21st century economic report in August, regulators have taken a number of measures to restrict real estate enterprises from increasing leverage. The latest measure is to increase the "three red lines" of asset liability ratio, net debt ratio and cash short-term debt ratio, so as to tighten the loan financing for real estate enterprises.
In fact, Zhang pointed out that under the condition of continuous property financing, the property companies will not be under the direct pressure of financial regulation.
The epidemic situation highlights the value of property services
On October 14, Country Garden Service announced that it would spend 2.45 billion yuan to acquire 70% of the shares of manguokangjie, which is engaged in integrated environmental and health services. The high amount of acquisition of country garden service attracted market attention, reflecting the property management industry "treasure".
Zhang Bo analysis said that there are two reasons for the property market value is particularly prominent. First, under the epidemic situation, people pay more attention to property than before, and the market attention is increased; second, the continuous expansion of the domestic commercial housing stock market is the basis for the development of property enterprises. By the end of 2019, the total scale of the national commercial housing stock has roughly reached more than 28 billion square meters.
According to the public documents disclosed by several property companies, we can see that the main business of property companies includes three aspects: property management services, community value-added services and non owner value-added services. In the aspect of property management services, property companies mainly compete with contract and non contract fee management areas. In terms of community value-added services, the company mainly develops domestic service, bag service, community media service, brokerage service, park space service, etc.
According to country garden's interim performance report, the company said that the gross profit rate of property management services under the influence of the epidemic situation did not drop, but increased, mainly because the Ministry of human resources and social security of the State Council reduced the cost of property management services. According to the mid-term performance report of green city service, the company said that in the event of the epidemic, it gained deep recognition from the owners and the government, thus consolidating the basic market and further discovering the industry value. The performance of related companies reflects that the property sector has a certain anti risk ability.
As Shimao expects, the investment value of property companies is being discovered by all levels of market, and the unlisted property companies have also gained much attention from strategic investors. According to the public information, in May this year, Shimao service obtained the strategic investment of Sequoia Fund of HK $920 million and Tencent of HK $810 million; Hillhead has become the cornerstone investor of Hejing Youhuo, and subscribed for us $50 million in this IPO.
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