Su Ning's cooperation with Citic Stone: an innovative thinking of real estate funds

Source: Internet
Author: User
Keywords Suning IPO real Estate fund CITIC Securities non public offering

Newspaper reporter Pan Shanghai Report

June 2013, when Suningyun (002024. SZ) launched a line on the same price policy, perhaps did not think that the next its earnings data will be so ugly.

China's retail industry has been a channel to occupy the traditional brand of capital, so Suningyun as a strong channel business, almost no cash flow worry. However, in 2013, it increased outward investment while reducing operating cash inflows, resulting in a sharp drop in cash (and equivalent) of Suningyun over 5.1 billion yuan in the year.

Suningyun 2014 reported that the net operating cash flow continued to reduce significantly, in the first half of 2014, it consumed about 1.4 billion of cash, which is the retail tycoon in the face of the impact of the electric trader, the first appeared in the loss.

The first half of Jd.nasdaq, one of its biggest rivals in home appliance sales, has just started an IPO in the US, financing 3.09 billion of billions of dollars. It can be said that the rivalry between Suningyun and Jingdong, but only to the midfield, it needs more adequate fodder.

October 15, Suningyun announced that its 11 wholly-owned subsidiaries of the relevant interests, to about 4 billion yuan to Citic Stone Fund Management Co., Ltd. (hereinafter referred to as "Citic Stone") to be launched by the Private investment fund. The 11 subsidiaries, whose assets are mainly Suning's 11 own store properties. In the future, Suningyun will sign long-term leases and continue to rent these properties at a steady price.

Kangliang, vice chairman of Golden Bay Investment Group, pointed out that this "after-sale return" operation is essentially a process of asset securitization. As far as the fund for this project is concerned, as long as the rental income of the project is higher than the cost of capital, the risk lies in the risk of future depreciation of these properties.

This is not the first single real estate securitization business of Citic Stone. A year ago in September, Citic Stone was put into the securities of two buildings owned by its parent company, Citic Securities. This year, the Citic Stone in the property sector has been a frequent attack, showing that its real estate funds are ambitious.

What is the purpose of Suningyun business?

July 2012, Suningyun 12.15 yuan per share of the price, Xiang Hongyi Investment issue 98.76 million shares, at the same time to Suningyun chairman Jindong's wholly-owned subsidiary issued 288 million shares, one-time fund-raising about 4.7 billion yuan;

December 2012, Suningyun issued five-year corporate bonds 4.5 billion yuan, the interest rate is 5.2%;

November 2013, Suningyun issued six-year corporate bonds 3.5 billion yuan, interest rate of 5.95%.

This is the Suningyun for nearly two years, several public fund-raising, a total of about 12.7 billion yuan. During this period, the Suningyun business invested 66 million US dollars to acquire the "red Child" and the related assets of the mother and infant electric Dealer's website, Hongyi the investment together to acquire PPLive (the full name "PPLive Corporation"), in which the Suningyun merchant invests not more than 250 million US dollars. The two investments are about 2 billion yuan, which would not affect the cash flow of suning.

But the decline of gross margin will enlarge the pressure. In 2013, Suningyun Business net cash flow of about 2.2 billion yuan, compared with the 2012 5.3 billion yuan significantly reduced; In this respect, the company's explanation is: "As a result of the adoption of a positive price policy, the level of Mao's interest rate decreased by 2.54%, so that the net operating cash flow fell 57.76% year-on-year." ”

In the first half of 2014, the net cash flow of Suningyun business was only 840 million, less than 2.72 billion of 1/3 in the first half of 2013. The company's explanation is: "Because the company's operating income and gross profit margin compared to the same period last year, resulting in business activities resulting in net cash flow fell 69.22% year-on-year." ”

In the past few years, many Chinese companies have not been profitable, but many of them are not worried about cash flow, as sales of these companies are growing every year, with an increase of more than 50%. When the enterprise sells goods, the customer pays almost on the spot, while the enterprise has a certain period of account for the supplier, so long as the income of the electric business enterprise increases, the loss of a certain amplitude will not bring the pressure of cash flow to the enterprise.

But Suningyun's earnings showed that in 2013, its sales revenue of about 100.5 billion yuan, an increase of about 7% per cent, the first half of 2014, its sales revenue of about 51.2 billion yuan, down 7.89% year-on-year.

Public information shows that in the first half of 2013, Suningyun business income of about 10.6 billion yuan, in 2013, the online business income is 21.89 billion yuan; Considering the April 2013, the "Red Child" of the mother and child, cosmetics sales of the above data, four quarter is the electric business industry traditional sales season, Suningyun sales performance in the second half of 2013, only just with the first half of the flat.

In 2014, Suningyun business in the newspaper, did not publish the first half of the online business income, only mentioned: "The first half of suning easy to achieve merchandise sales income of 8.282 billion yuan." ”

Reporter call Suningyun business, ask "online business income" and "suning easy to purchase sales revenue" diameter difference geometry, as of press, did not get the answer.

In the first half of 2014, Suningyun business lost 755 million yuan. Earlier, in the three quarter of 2013, just launched the "line with the same price" policy, Suningyun first appeared quarterly losses, the loss of about 100 million yuan.

Suningyun in the first half of the sales revenue decline, online business has not increased, gross profit margins, performance losses, cash flow plummeted. So, when the Suningyun to sell the property of 11 subsidiaries, one of the PE people concerned about the retail industry is not surprised: "Back to rent after the sale, often in foreign companies to do so." ”

A retail company executives privately pointed out: "There is no profit at the current pressure, and Su Ning's line of the same price policy, will let Suning original profit of the line shop is no longer profitable, and online business has been a loss, so left to suning transformation of the time is very small." Suning put the company's original stock assets, such as stores packaged for sale, and then rent back to operate, equivalent to activating assets at the same time on the enterprise light assets, this is inevitable. "In the analysis of the above retail business executives, Suningyun may follow similar operations to other stores," he said.

Co-Citic Stone

This is not the first single asset securitization business of Citic Stone.

September 2013, Citic Securities (600030. SH) announced that the company intends to be no less than 5.004 billion yuan of the price will be Tianjin Beijing Real Estate Services Co., Ltd. and Tianjin deep Certification Property Services Co., Ltd. All equity transfer to the Citic Stone proposed to launch the establishment of the Non-public Fund of the wholly owned subsidiary. After the transaction is completed, Citic Securities will be leased at the market price Beijing Citic Securities building and Shenzhen Citic Securities building.

The main commercial real estate fund Gao and Capital Chairman Suxin the first time to note: "Citic Securities its own building to securitisation." "and said:" Guangdong has a printing business, its plant and commercial real estate, the future rental income package securitization. ”

Suxin that these can be said to be class REITs (real Estate Trust investment Fund). In the next few years, China pushes the strict meaning of the REITs to be difficult, the class REITs product will appear.

And for Citic Stone, last year, the parent company of the two buildings securitization, can also be said to be "related transactions", this will Suningyun 11 subsidiaries of the property assets securitization, it can be said that it opened up a new game of real estate funds.

Kangliang said: "After-sales return is the process of asset securitization, and the practice is similar to REITs." But REITs products can be publicly transferred, if this product can not be transferred in the future, I am afraid the yield is not high enough. The project itself earns a difference in property rents and capital interest, and it can also make money in the future, and its risk is that the value of these properties will fall in the future. In addition to considering the market value of the commercial properties in place, the question of depreciation should also be considered, the property rights of such properties are generally 40, after the lease of a certain number of years, will it be for this reason that the market value of these properties has fallen? Therefore, it is best that the rents of these properties are much higher than the cost of capital. ”

Citic Stone is a direct investment company of CITIC Securities. In the past more than a year, because of the IPO shutdown, to IPO business mainly to profit model of the brokerage companies, hard to seek all kinds of innovative business, for example, to try to do with the listed companies in the current popular "pe+ listed companies" jointly launched the Fund model.

However, Citic Stone's performance remains bright. CITIC Securities Annual report disclosed that as at the end of 2013, Citic Jinshi total assets and net worth of about 11.7 billion yuan and 9 billion yuan respectively, the 2013 operating income of 740 million yuan, the total profit of about 500 million yuan, net profit of about 340 million yuan. But the employees were 103. In addition, at the end of 2013, Citic Stone will increase the unallocated profit of 1.3 billion yuan to registered capital, the registered capital jumped to 7.2 billion yuan.

In addition, Citic Stone's enthusiasm for real estate projects is not limited to "real estate securitization". In the first half of 2014, Citic Stone's wholly-owned subsidiary, Jin Ze letter, and Citic Securities as a joint bidder, in accordance with the proportion of 4:6 jointly funded 1.775 billion yuan, to pay the Shenzhen municipal planning and land and Resources Committee number for the t207-0049 block of land use price. Kim Shize and Citic Securities, respectively, contributed about 710 million yuan and 1.065 billion yuan.

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