Public REITs turnover exceeded 1.8 billion yuan on the first day of listing

9 products are all red, the market is expected to rise, experts remind the need to look at the value of investment rationally and objectively

　　On the 21st, the first batch of 9 publicly offered REITs in the infrastructure sector were listed on the Shanghai and Shenzhen Stock Exchanges.

The "First Show" of the Chinese version of the public offering REITs achieved outstanding results.

As of the close of the day, 9 products were popular across the board. The largest increase in Shekou Production Park recorded a 14.72% increase, and the total turnover of the 9 products exceeded 1.8 billion yuan.

　　As of 2019, more than 40 countries and regions around the world have formed a REITs (real estate investment trust fund) market.

In April 2020, my country entered the field of infrastructure and launched the pilot work of public offering REITs.

　　"Relying on the product innovation of REITs, mobilizing and guiding all kinds of factor resources to gather in the infrastructure field can effectively and effectively revitalize the stock assets, form a virtuous circle of stock assets and new investment, and achieve high-quality economic development. At the same time, it also provides a medium income for the market. , A medium-risk tool." Chen Fei, director of the Corporate Bond Supervision Department of the China Securities Regulatory Commission, said on the 21st.

market

Public REITs subscriptions are popular among investors

　　Among the first 9 infrastructure public offering REITs, there are 5 infrastructure public offering REITs on the Shanghai Stock Exchange, namely GLP, Soochow Suyuan, Zhangjiang REIT, Zhejiang Hanghui, and Beijing Capital Water. The fund managers are CICC Fund, Soochow Fund, Huaan Fund, Zheshang Securities Asset Management, Wells Fargo Fund.

The four infrastructure public offering REITs on the Shenzhen Stock Exchange are Shougang Green Energy, Shekou Industrial Park, Guangzhou Guanghe and Yangang REIT. The fund managers are AVIC Fund, Boshi Fund, Ping An Fund, and Red Earth Innovation.

The first batch of products are mainly invested in infrastructure projects to make up for shortcomings.

　　Public REITs are popular among investors.

On May 31, the 9 publicly offered REITs were all sold out in one day, and the placement ratios were disclosed on June 2 and 3. The final placement ratios for public subscription of Shougang Green Energy, Shekou Industrial Park, Yangang REIT, and Guangzhou Guanghe were respectively 1.759%, 2.39%, 8.80%, 10.80%; the final placement ratios for public subscription of Beijing Capital Water, Zhejiang Hangzhou Hui, Zhangjiang REIT, GLP, and Dongwu Suyuan are 2.41%, 3.68%, 4.26%, 10.04%, 12.30%, respectively.

This means that the placement ratio of Shougang Green Energy has set the lowest record in history. This record was previously maintained by GF Technology Innovation, and the final placement ratio was 3.3%.

Six publicly offered REITs have initiated the reversal mechanism, which has increased the allocation ratio for public investors to subscribe to the corresponding funds.

　　Since the risk-return characteristics are different from financial products such as stocks, bonds, funds, etc., publicly offered REITs set a limit of 30% on the first day of listing and 10% on the first day of non-listing.

The first batch of infrastructure public offering REITs has a wide range of investor types and a fragmented structure. Insurance companies, securities companies, industrial capital, private equity funds, and individual investors all actively participated, with high subscription enthusiasm, which played a good demonstration effect.

Public investors can subscribe for REITs products through over-the-counter direct sales and agency agencies, or through brokerages for on-site subscription. After the relevant infrastructure funds are listed, investors can only participate in on-site transactions.

Advantage

Investors can participate in real estate market investment with a low threshold

　　Yao Hui, an analyst at the Shanghai Securities Fund Evaluation Research Center, said that for ordinary investors, publicly offered REITs provide an opportunity to participate in real estate market investment with a lower threshold.

At the same time, the share of listed REITs can be traded on the exchange and has good liquidity; publicly offered REITs have a mandatory dividend system. Judging from the prospectus published by the 9 products to be issued, the cash flow distribution rate is expected to be 4% to 12%; Due to the particularity of its investment targets, the correlation with stocks and bonds is low. Appropriate addition of publicly offered REITs to the asset portfolio can reduce portfolio volatility.

　　According to the research of Ji Yu, firstly, the income distribution ratio of publicly offered REITs is relatively stable, which is another better investable asset besides stocks, bonds, real estate and cash.

In the short term, it can be used as a better investment choice for A-shares in the turbulent stage. In the medium and long term, both individuals and institutions, REITs funds are effective asset supplements in the entire investment portfolio.

　　Zhou Yunong, a researcher at Yingmi Fund Research Institute, said that on the one hand, publicly offered REITs can revitalize the domestic infrastructure stock assets, allowing ordinary investors to enjoy the long-term benefits of high-quality infrastructure projects; on the other hand, based on past overseas experience, the correlation between REITs and stock bonds Low, through asset allocation can help investors significantly reduce long-term volatility.

attention

Estimated annualized rate of return 4%~10%

　　Publicly offered REITs have the dual attributes of stocks and bonds, so investor income mainly comes from two parts, one is the dividend income during the period, and the other is the value growth income of fund shares.

According to the "Notice on Doing a Good Job in the Application of Real Estate Investment Trust Funds (REITs) Pilot Projects in the Infrastructure Sector" issued by the National Development and Reform Commission, it clarified the project’s expected net cash flow distribution rate for the next 3 years (estimated annual distributable cash flow/target real estate evaluation) In principle, the net value) shall not be less than 4%. Taking into account the quality of the first batch of public REITs projects, it is estimated that the income level is 4%~10% annually.

Compared with stocks, publicly offered REITs have the characteristics of low volatility and stable dividend frequency. The income distribution is at least once a year. At the same time, the income distribution ratio is not less than 90% of the fund's annual distributable profits, and the risk is lower than that of stocks.

　　Yao Hui said that the main sources of income for public REITs are operating income and capital gains due to asset appreciation.

Investors mainly earn annual dividends and changes in fund prices in the secondary market.

Judging from the prospectus published by the 9 products to be issued and the past experience in the US market, the level of income will be higher than bond funds and not as good as hybrid and stock funds.

　　According to Jiyu Research, publicly offered REITs essentially hold infrastructure assets through publicly offered funds and obtain their investment income, which are mainly divided into relatively stable cash flow income and capital gains income.

Judging from the actual performance of international REITs products, their income distribution ratio is relatively stable, with the characteristics of low volatility, anti-inflation, and diversified investment. The overall long-term risk and return characteristics are higher than cargo-based and debt-based funds, and lower than partial equity funds.

Based on the prospectus of the first batch of publicly offered REITs, the projected return rate of Zhangjiang Everbright Park REITs is 4.5% per annum, and the Shanghai-Hangzhou-Ningbo Expressway REITs estimate that the full-cycle IRR is not less than 6%, but the final investor income also needs to be combined with fund fees. Factors such as investment rate, issuance price, post-listing price, and the fundamentals of the corresponding assets are comprehensively considered.

remind

Treat investment value rationally and avoid chasing ups and downs

　　Public REITs performed well on the first day of listing. Experts believe that this shows that the market has expectations for the rise, but it is necessary to look at the investment value rationally and objectively.

　　According to Xinhua News Agency, compared with stocks and bonds, infrastructure public offering REITs generally have the characteristics of medium risk and medium return.

On the whole, the main risks that may be faced by investment in infrastructure public offering REITs include the risk of fund price fluctuations, infrastructure project operation risks, and liquidity risks.

　　Ping An Fund pointed out that at present, the public REITs market in my country has just set sail. It is recommended that investors treat price fluctuations rationally, fully understand the risk-return characteristics and product characteristics of such funds, understand their own risk appetite, pay attention to long-term investment value, and jointly take care of this. The "Blue Ocean" market is growing vigorously.

　　The Wells Fargo Fund stated that public REITs, as an innovative financial product, have no historical verification of the prospects of future infrastructure investment, and the unknown risks involved remain to be seen.

　　Specifically: First, the construction of information disclosure for publicly offered REITs is the top priority, but it is still in the exploratory stage, which may weaken the pricing power of the secondary market and accumulate risks.

After publicly offered REITs are listed and traded on the exchange, the net value may not be disclosed for a long time, and the anchor of the transaction pricing may be lost in the short term, resulting in increased transaction price fluctuations. Therefore, investors should be cautious when participating in secondary market transactions.

　　Second, public REITs, as one of the types of public funds with a long closed period, also have the risk of not guaranteeing returns, long closed periods, and discounts on listing.

Due to its long closed period, there may be a problem of listing discounts, and the liquidity of the secondary market of publicly offered REITs may not be high, and certain liquidity risks may also occur. Therefore, investors should participate in the secondary market of publicly offered REITs. Strengthen risk awareness.

　　Third, the enthusiasm at the time of issuance does not mean an increase at the time of trading.

Publicly offered REITs are favored by funds at the time of issuance, but it does not mean that they will still be recognized by funds after listing and trading.

The listing of publicly offered REITs is also different from the issuance and listing of new shares. The listing of publicly offered REITs cannot be viewed with the attitude of new shares. The transaction prices of publicly offered REITs in the secondary market must be treated rationally.

　　"For the majority of investors, soundness, safety, medium returns, and suitable for long-term holding are the'role positioning' of publicly offered REITs as investment products. We must not have the mentality of'getting rich overnight' by speculating on publicly offered REITs." The relevant person in charge said that it is recommended that investors take a rational view of the investment value of the first batch of listed publicly offered REITs and avoid chasing the rise and the fall.

　　Text/Reporter Zhu Kaiyun Co-ordinated by Yu Meiying