Set home rich 2 billion and Fu Hui stores
Fortune REIT (778) held by Cheung Kong (1113) announced that it will sell its business project “Wo Fu Hui” at North Point, Hong Kong for $ 2 billion over the end of November Value premium of 88.5%, is expected to sell 921 million yuan will bring earnings. After the deal was exposed, a large bank announced that it had been singing “good” wealth and reiterating its “buy” rating.
Fortune Industries pointed out that on December 19 (Tuesday) through its wholly-owned subsidiary, Fortune Industries Limited entered into an agreement with an independent third party for the disposal of the entire interest of “Fortune” and the acquisition value was $ 2 billion. “Wo Fu Hui” is the center of Wo Foo shopping center and the basement was completed in 1984 and can be rented up to a total area of 180,238 square feet.
Fortune REIT acquired the above properties for a consideration of RMB650 million in 2012. The selling price was RMB2 billion, more than three times its original purchase price and 88.5% higher than its valuation as of 30 November 2017, The property is expected to close on February 28, 2018.
The yield is only 1.15%
According to the announcement, “Hexocap” posted a net property income of 18.44 million yuan for the six months ended June 2010, accounting for about 2.5% of the total net wealth contribution of Fortune. As at the end of December last year, the net property income of “HOFI” for the year was 23.025 million. According to this calculation, the annualized yield of this sale was 1.15%.
There are market news pointed out that the new buyer of the “Wo Fu Hui” investment (Far-sightInvestmentLimited), the company’s directors include Ho Chi Kin (HOCHIKINSIMON) and Cen Shaoqiang (SHUMSIUKEUNG), the former is the gambler known as Stanley Ho’s former son-in-law.
Citigroup published a research report on the transaction. It believed Fortune REIT to sell “Wo Fai Hui” at a price of $ 2 billion. It is estimated that the gearing ratio will decrease by 2.8 percentage points to 25.6% upon completion of the transaction. Maintain wealth Buy “Buy” rating, the target price of 10.9 yuan, compared with yesterday’s closing price of 9.6 yuan higher than the 13.5%.
However, the bank also believes that as the proceeds from the transaction will be used to repay the bank loan of RMB1.1 billion, it is believed that the Company will not ease the distribution loss of any unit through further debt reduction or capital recovery and will result in loss of total property revenue in FY 2018 2.5%, 2018 and 2019 for the distribution of each unit is expected to cut up to 1.7% and 0.8% respectively. The bank also pointed out that this time it was the second time to dispose its assets. For the first time in 2015, Kwai Chung Huihui Hui was sold for 648 million yuan, with a net sales yield of 2.9%.