Wuhan Chinese Business 173 times times P/E purchase of 49% equity

Wuhan Chinese business to the purchase of additional holdings of the acquisition of the holding subsidiary of the remaining 49% stake in the sale of goods, but the latter has been operating since 2005 to 2008 has been a loss, the first time in 2009, 4 million; In addition, the sales of Mao's assets and liabilities rate of up to 92%, the huge financial costs of the invasion of profits, the future will give a very tight capital chain in Wuhan to increase the weight of the burden.　　Judging whether the deal is a real bargain or a longer-term observation.　　Wuhan Chinese business Today disclosed the reorganization plan, intends to 8.27 yuan/shares to the Solidarity group to issue more than 41.717 million shares, purchase its hold of Wuhan China Business Unity Pin Mao Management Co., Ltd. 49% Equity, the latter is estimated at 345 million, compared to net assets value added 7.36 times times. Announcement Introduction, the first sale of Mao, Wuhan Chinese business investment 97.76 million yuan, accounting for 51% of registered capital, Solidarity group contribution of 93.93 million yuan, accounting for 49% of registered capital.　　It is said that the company is the first real shopping center in Wuhan City, which occupies an important position in the commercial structure of Wuhan, which plays a significant role in the formation, development and maturation of the xudong business circle. The announcement also said that since the opening of the sales of Mao, along with the Xudong business district gradually mature and its own management, operating level of promotion, rental income, advertising and other income are rising rapidly, operating performance steadily improve.　　As at the end of 2009, sales of the store rental rate and area rental rate reached 99.58% and 99.85% respectively. However, the data show that the sales of Mao 2007-year loss of 25.69 million, 2008-year loss of 18.36 million, to 2009 micro-surplus 4 million. Wuhan China business is expected to achieve profitability 9 million, 2011 to achieve a profit of 13 million.　　As a result, if the profit in the next two years, Wuhan Chinese businessmen buy multiples of 173 times times, 77 times times. At the same time, the total investment of sales of Mao nearly 1 billion yuan, the capital is only 192 million, the proportion of total investment is less than 20%, capital of cash only 97.76 million yuan (the rest for land pricing).　　By the end of May 2010, sales of Mao's total assets of 900 million, net assets of only 84.16 million, asset-liability ratio of up to 92%, it is evident that its construction and operation of funds are dependent on bank loans or shareholder loans, high financial costs eroded a large number of profits. In addition, the plan also tan Chen, due to the operation of insufficient funds, sales of goods Mao early operation difficult.　　In order to cultivate brand, attract merchants, as soon as possible to recover part of the investment and generate income, sales of goods and merchants signed the initial rent relatively low, especially for the strong brand merchants to let a large extent, which led to the sales of Mao in a period of time average rent level is relatively low, not fully reflect its value as a scarce resource　　In response to the above situation, the plan said that the sales of Mao's management team to take three aspects of the response: to improve the rental rate as the primary task, around the passenger flow and the ability to take a variety of measures, according to their own positioning to screen merchants, improve rents, through fine management to expand revenue sourcesJudging from the current situation, Wuhan, the acquisition of the business seems to be a financial bargain. In the future, the sale of Mao in Wuhan, a wholly-owned subsidiary, can usher in new performance growth period, especially to be observed.