Since the opening of the market in the year of the tiger, many public REITs of infrastructure have continued to rise sharply. On February 8, Wells Fargo’s first water REIT rose by 7.19%, and laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT rose by 6.17%.
In order to protect the interests of fund holders, the trading of laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT and Fuguo’s first water REIT products was suspended on February 9.
Industry insiders said that recently, the A-share market has continued to adjust, and funds tend to look for more stable assets. Having an independent market is also the charm of alternative assets, but investors should pay more attention to the internal value of basic assets.
temporary suspension of two public offering REITs
On February 9, laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT and Fuguo’s first water REIT issued an announcement on suspension and resumption of trading and trading risk warning.
According to the announcement of laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT, the closing price of the fund in the secondary market on February 8 was 4.127 yuan, a large cumulative increase compared with the issuance price of 2.300 yuan. The main purpose of the fund is to obtain stable cash flow such as the rent of infrastructure projects. With the sharp rise of transaction price, the net cash flow distribution ratio will decrease significantly. In order to protect the interests of fund unitholders, laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT will be suspended from the opening of the market on February 9 and open on February 10.
Source: laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT announcement
Wells Fargo’s first water REIT announced a one-day suspension on February 9 for the same reason.
Source: Wells Fargo’s first water REIT announcement
Both laterite Shenzhen Yan Tian Port Holdings Co.Ltd(000088) REIT and Fuguo’s first water REIT stressed in the announcement that the main purpose of public offering REITs investment is to obtain stable cash flow. The increase in the transaction price of the secondary market and the increase in the purchase cost of investors will lead to the reduction of the actual net cash flow distribution rate.
The fund calculated an account for investors in the announcement. Take Wells Fargo’s first water REIT as an example. Its first dividend plan in 2021 is 2.714 yuan / 10 fund units. If investors buy in the initial offering and the issuance price of Wells Fargo water REIT is 3.700 yuan / share, the net cash flow distribution rate of investors in 2021 is 7.335%. However, if investors buy in the secondary market, taking the price on February 8 as an example, the price is 7.263 yuan / share, and the investor’s net cash flow distribution rate in 2021 will be greatly reduced, only 3.737%.
the highest premium rate is 96.3%
Up to now, a total of 11 REITs products for public offering of infrastructure have been issued and listed in two batches. Whether the strategic placement for institutional investors or the sale for public investors, as well as the transactions in the secondary market, are very “hot”.
Among the 11 infrastructure public offering REITs products, the effective subscription confirmation proportion of public investors of 8 products is single digits, and the effective subscription confirmation proportion of AVIC Shougang biomass REIT is only 1.76%.
From the performance of the secondary market, Wells Fargo’s first water REIT premium rate is the highest, and the premium rate of the secondary market reaches 96.3%; After that, red soil innovation Shenzhen Yan Tian Port Holdings Co.Ltd(000088) warehousing logistics REIT, the two class market premium rate is also as high as 79.36%. The REIT premium rate of CCB Beijing Centergate Technologies (Holding) Co.Ltd(000931) Industrial Park is 59.47%; The premium rate of AVIC Shougang biomass REIT, Huaan Zhangjiang Everbright Park REIT and Boshi China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) Industrial Park REIT exceeds 40%; The REIT premium rate of Ping An Guangzhou Jiaotou Guanghe expressway is the lowest, 9.87%.
focus on intrinsic value
“There may be a certain increase in a short time. After all, the early-stage projects are one in a hundred assets.” An industry insider said, “but the secondary market price fluctuates around the asset value, and finally we should return to rationality.”
\u3000\u3000 “If the price in the secondary market fluctuates sharply, especially when the price rises sharply to significantly higher than the internal value of public REITs, new investors will face two risks: first, in the long run, the price will return to the internal value, and there is a risk of investment loss due to price decline; second, due to price rise, the expected internal rate of return of public REITs will decline and the investment can not be realized Funding objectives. ” A public REITs fund manager said.
No matter how the underlying market fluctuates, he always emphasizes the internal fluctuation of secondary assets. Therefore, for holding investors, we should pay more attention to the internal value of basic assets. Because although the price will deviate from the intrinsic value of the underlying assets, it will return to the intrinsic value in the long run.
Another public REITs fund manager said that public REITs is a new member of China’s capital market. The investor group is not yet fully mature and the investment logic is not systematic, which may lead to irrational fluctuations in the secondary market of REITs. Investors should uphold the concept of long-term value investment, jointly care for the growth of REITs market and witness the development and growth of REITs market.
