REITs products are actively traded. Recently, there have been temporary suspension of trading of many products, and an announcement has been issued to invite investors to pay attention to investment risks. We believe that the asset shortage itself is phased, the future decline space of long-end LPR is also relatively limited, and REITs products have obvious expansion space. We are optimistic about the medium and long-term development of REITs market and suggest institutional investors to actively participate in the primary market, but we are not optimistic about the short-term price performance of existing REITs products.
REITs trading is more active. From February 10 to 16, 2022, the total transaction amount of REITs market was 2.592 billion yuan, with a month on month increase of 48.6%. The transaction amount of various REITs assets increased comprehensively and rapidly month on month. Among them, warehousing and logistics and ecological and environmental protection REITs increased by 69% and 58% month on month respectively, and the asset growth of park infrastructure and transportation infrastructure REITs also reached 43% and 36% month on month respectively. Overall, the rising trading of REITs not only shows the long-term vitality of REITs products, but also reflects the irrational factors in the market after the continuous rise.
After the temporary stop, the market gradually returns to rationality. This week, the price of REITs portfolio was high before and low after. After several REITs fund products issued temporary suspension and risk warning announcements, the market began to change significantly. Among them, the REITs market portfolio decreased by 2.37% on February 17, 2022. In the middle of this week, Shekou Industrial Park, Zhangjiang Everbright and CCB Beijing Centergate Technologies (Holding) Co.Ltd(000931) successively announced the temporary suspension of trading within the trading day for many times. Shougang lvneng also issued risk warning announcements on February 12 and 15. Each REITs product has repeatedly illustrated the investment risk caused by the decline of product net cash flow distribution rate caused by the increase of trading price in the secondary market, It is emphasized that the predicted amount available for distribution does not represent the actual annual realized amount, and the cash distribution rate is not equal to the yield of the fund, so investors are reminded to pay attention to potential risks.
The shortage of assets itself is phased. We believe that REITs products, as high-quality financial assets, have long-term investment value. However, when the net cash flow distribution rate of REITs market drops below 2.7% (for property rights assets), it is indeed affected by the current shortage of assets. From the perspective of the allocation of large categories of assets, the risk of the credit bond market and the possibility of the decline of the operating performance of listed enterprises make the on-site funds pursue REITs based on assets (rather than enterprise subjects) However, we have confidence in the stability of China’s economy and believe that the spread of credit risk is still controllable, the asset shortage will not continue to expand in a general sense, and the decline of long-end LPR is also limited. We do not believe that high REITs have great room for price rise in the short term.
We look forward to product expansion and category expansion. This week, according to the announcement of Shenzhen Stock Exchange, Penghua Shenzhen Energy Group Co.Ltd(000027) clean energy closed infrastructure securities investment fund, which previously submitted its application on December 30, 2021, was accepted on February 15, 2022. It can be submitted for issuance after subsequent inquiry, review and other processes.
According to the statistics of the national development and Reform Commission at the end of 2021, hundreds of REITs are expected to enter the market in the future. We believe that the continuous enrichment of investable targets, especially the continuous diversification of infrastructure categories, is very helpful to alleviate the problem of small-scale REITs market and few investable targets under the background of asset shortage.
We also suggest that institutional investors pay attention to the primary market, including the feasibility of participating in REITs as cornerstone investors.
Risk warning: some infrastructure is affected by policies, and the short-term operating income does not meet the expected risk.
