On December 21, Shanghai Shimao Co.Ltd(600823) (600823. SH) issued an announcement on the reply to the inquiry letter on matters related to the transfer of assets to related parties, and 10000 words replied to the three major questions of the Shanghai Stock Exchange on the previous connected transaction between Shanghai Shimao Co.Ltd(600823) and Shimao service (00873. HK).
Previously, on December 13, Shanghai Shimao Co.Ltd(600823) and Shimao Service announced a related party transaction at the same time, Shanghai Shimao Co.Ltd(600823) sold the light assets of property management to Shimao service for RMB 1653.5 million. Previously, Shimao services raised about HK $4.8 billion, and some of the funds were used for this transaction.
Shanghai Shimao Co.Ltd(600823) the announcement disclosed that the transaction objects include 100% equity of Shimao Property Management Co., Ltd. (hereinafter referred to as "Shimao property") and the property management business and related assets and liabilities involved by 29 companies such as Beijing maoyue Shengxin Enterprise Management Co., Ltd. (hereinafter referred to as "transaction objects"). In Shimao service announcement, The target business of this transaction is described as: "the property management service business and related value-added services engaged by Shanghai Shimao through its wholly-owned subsidiary Shimao Property Management Co., Ltd. and 29 other subsidiaries in China, including the provision of commercial / residential and other properties in China (including but limited to commercial complexes, government and public facilities) Property management services, non owner value-added services and community value-added services ".
Obviously, Shanghai Shimao Co.Ltd(600823) the subject matter of this transaction includes residential property management business, which is not pure commercial management over assets.
On December 15, Shanghai Stock Exchange (hereinafter referred to as "Shanghai Stock Exchange") issued an inquiry letter on matters related to the transfer of assets from Shanghai Shimao Co.Ltd(600823) to related parties, raising three major issues, including the necessity of transaction, the fairness of transaction consideration, transaction transparency and whether there are potential more related party transactions, Both involve the invisible transfer of high-quality assets and benefit transmission that may occur in capital transactions.
The every move of listed companies of Shimao Group has attracted the attention of investors. Shanghai Shimao Co.Ltd(600823) spent a week giving a detailed reply to the inquiry letter of the Shanghai Stock Exchange, denying the transfer of high-quality assets and benefit transfer.
The 21st Century Business Herald reporter combed the main contents of Shanghai Shimao Co.Ltd(600823) reply to the inquiry and found that Shanghai Shimao Co.Ltd(600823) in order to show that the transaction pricing is objective and fair compared with the valuation of similar transactions in the market, it also compared the list of 10 property companies with similar related party transactions, such as rongchuang service, country garden service and Longhu service, so as to confirm the rationality of their own transaction consideration.
(form source: Shanghai Shimao Co.Ltd(600823) announcement)
Among the 10 listed companies listed in Shanghai Shimao Co.Ltd(600823) , rongchuang service (01516. HK) and Zhengrong service (01477. HK) acquired the business management light assets of their own group, which is slightly different from the property management light assets acquired by Shimao service. These two transactions are different in asset valuation logic and profit level model.
After excluding rongchuang service and Zhengrong service in the table, the reporter roughly calculated that the average static PE of companies trading with Shanghai Shimao Co.Ltd(600823) in the industry is 17.625, and the net PE of Shanghai Shimao Co.Ltd(600823) is 18.12 times, which is a reasonable difference.
The simulated consolidated net profit of Shanghai Shimao Co.Ltd(600823) in 2020 was 91.2441 million yuan. The announcement disclosed that as of June 30, 2021, Shanghai Shimao Co.Ltd(600823) property management business had a management area of 4.65 million square meters. An industry source disclosed that the average level of the property management industry is: in the management of 10 million square meters, it can contribute more than 40 million yuan of profit. If we roughly calculate according to this average level, Shanghai Shimao Co.Ltd(600823) has a pipe area of 4.65 million square meters, and the reasonable profit level is only about 4 million. However, Shanghai Shimao Co.Ltd(600823) includes residential and commercial areas in the pipe area, so this average measurement method may not be applicable.
Shanghai Shimao Co.Ltd(600823) disclosed that the PE level of Listed Companies in the same industry is about 23. In contrast, the average static PE level of listed companies that do property management light asset M & A is lower. Shanghai Shimao Co.Ltd(600823) by comparing rongchuang service with Zhengrong service in the same type of transaction, you may just want to raise the valuation level of the transaction object, or prove that the transaction consideration is fair.
(form source: Shanghai Shimao Co.Ltd(600823) announcement)
On November 7 this year, rongchuang Service announced that it would integrate business management light assets into rongchuang service at a price of 1.8 billion yuan. The price of the transaction object of Shanghai Shimao Co.Ltd(600823) is RMB 1653.5 million. The transaction consideration of the two is close. In addition, the net profit level of rongchuang business management light assets is 118 million, while the simulated consolidated net profit of Shanghai Shimao Co.Ltd(600823) light assets in 2020 is 91.2441 million yuan.
in addition, with regard to the Shanghai Stock Exchange's inquiry on whether there is transfer of high-quality assets and benefit transfer in this transaction, Shanghai Shimao Co.Ltd(600823) admitted that the net profit margin of the transaction object is slightly higher than Shanghai Shimao Co.Ltd(600823) , but this is the profit difference between asset light and asset heavy businesses; The gross profit margin of the transaction object is also higher than that of Shimao service, which is caused by different segments. In recent years, the operating income of the transaction object is also increasing year by year.
(Figure 2 shows the gross profit margin level. Source of the form: Shanghai Shimao Co.Ltd(600823) announcement)
In order to strengthen the demonstration effect, Shanghai Shimao Co.Ltd(600823) also lists the valuation process of the transaction target: first, the value of the transaction target is 1651 million yuan by using the income method; Later, it was evaluated with the asset-based method, and the evaluated value of the transaction object was 96.4469 million yuan. Shanghai Shimao Co.Ltd(600823) believes that because the subject matter of the transaction is light assets, the appraisal value cannot fully reflect the asset value, so it selects the value parameter measured by the income method.
According to Shanghai Shimao Co.Ltd(600823) prediction, in the next five years, Shanghai Shimao Co.Ltd(600823) property management light asset operation can maintain a profit growth of about 20 million per year. Even the analysis of the income trend of the subject-matter sustainability period is the same as that in the fifth year.
At present, in the Hong Kong stock capital market, there are few successful cases of real estate enterprises injecting business management light assets into property listed companies. More property companies expand through mergers and acquisitions. However, putting the business management light assets in the group system into the property company can better coordinate the development and expand the market value of the property listed company. The connected transactions between Shanghai Shimao Co.Ltd(600823) and Shimao services also follow this path. According to the situation of Shimao Group today, this related party transaction not only solves the problem of horizontal competition between Shanghai Shimao Co.Ltd(600823) and Shimao services, but also adds cash flow to Shanghai Shimao Co.Ltd(600823) . At the same time, it is also conducive to the coordinated development of Shimao services.
On December 22, Shanghai Shimao Co.Ltd(600823) closed at 3.36 yuan, down 3.45%, with a market value of 12.6 billion yuan; Shimao services closed at HK $5.37, down 1.65%, with a market value of HK $133.1.
(21st Century Business Herald)
