Wheelock reorganization too early Wharf property continued to value
Wharf (00004) outperformed the market for two consecutive years, more so this year, thanks to the spin-off thanks to the existing spin-off Wharf (01997) listing, Wharf after the spin-off split performance, Wharf property rose to high Bit wandering, after the spin-off announcement, the market looking forward to its holding company Wheelock (00020) thereafter there will be further restructuring, Wheelock will be increased on the 13th Wushuigufen 35 million shares or 0.01% at a price of 26.4 yuan per share , Which is the first increase after the spin-off. Before the spin-off, Wheelock held 61.59% of both equity interests and now holds 61.6% of Wharf and still holds 61.59% of Wharf Property. Although Wheelock will increase its holdings of Wharf, it is too early to consider the prelude to restructuring.
At present, Wharf is mainly engaged in property development in Hong Kong and the PRC, property investment in China, hotel management and logistics as well as other investments. The owner of Wharf Property is 72% owned by Hong Kong Property Investment and holding the harbor business (00051). Some of the properties in Hong Kong are the original investment properties of Old Wharf in Hong Kong. The harbor enterprises operate hotels and certain property interests in the PRC but have already indicated that they will not increase their land storage in the PRC and do not intend to develop their properties in the PRC.
Business overlap look forward to the merger
In other words, Wharf Property is engaged in investment in Hong Kong properties and hotels. Wharf also is property-based and develops in both Hong Kong and Mainland. Wharf property will be more stable, Wharf performance depends on the property market may be.
Wheelock holdings of Wharf shares, involving only 9.24 million yuan of funds, and there is no continuity, of little significance, I believe that the stock price is low, in the past holdings of holdings of nine positions. Now holdings of Wharf to 26.4 yuan, an estimated discount of 38% of the asset to real estate development stocks, can be regarded as low, especially the holding company, the value of assets more attention.
In addition to holding two shares of Wheelock Control, the business development of Hong Kong based property is generally believed that Wheelock business and Wharf overlap, the current merger. If so, it should be after the talk, I believe it is not a short-term thing. Whether the structure of an enterprise is ideal, such as the venue in Singapore held by Wheelock, is not necessary, but so far there is no activity to improve the structure. Wheelock is not well-financed finance, cash M & A to increase debt, such as the merger of the need to Wheelock shares price, Moreover, Wheelock also consider how much Wharf asset discount, just in line with mergers and acquisitions strategy. Wheelock for August Wharf restructuring and rose to 65.8 yuan, so far only 54 yuan level, has dropped 18%, reflecting the market was too much vision.
After the spin-off of Wharf, after adjustment, it dropped from a high of $ 33.8 during the year to a recent increase of $ 43.15 and an asset discount of 43%. Instead, Wharf Property recorded a steady rally after the spin-off. The market believes that the original Wharf’s main assets have been owned by the Wharf store, including Harbor City and Times Square, also expected the dividend ratio of 65% to 52 yuan level, the expected rate of 3.6%, asset discount 19 %. It can be noted that there is no development plan for the Wharf property development except for the Murray Hotel which is about to open. If the status quo is maintained, the future growth of the property is expected to be only a single digit, but it is relatively steady.
Wharf relates to the development of properties in China and is wary of those who are cautious. However, the property prices in Hong Kong continue to record highs. Their outlooks are extraordinary and can not be regarded as risk-free but also quite attractive developments.
If the development of soil storage potential
The Mount Nicholson mansion at Peak Heights, part of a partnership developed with Nan Fung, sold and continues to record highs, is not yet sold out.
Wharf is wholly-owned with 3 King Wineries and Peak Road, 35 super mansions under construction, covering an area of about 180,000 square feet. The supply of such luxury market is not large and is expected to make an excellent contribution. The Kowloon Warehouse in Kowloon Bay is planned to be rebuilt to house 830,000 square feet. In addition, Yau Tong Wan has an area of about 600,000 square feet and also accounts for 15%.
Of course, there are still some land reserves in development in the PRC. It should be noted that these landings were purchased more than a few years ago at a lower cost. Wharf The above factors due to the stock price has some support, and even some of the potential remains to be reflected.
After the spin-off of Wharf Property, Wharf has only invested in container terminal and logistics business except for the development of Hong Kong and Mainland properties. However, it has made little contribution. For sustainable development, land reserves should be increased, irrespective of Hong Kong or Chinese land, High risk can be expected, so the higher the asset discount, Wheelock may be the reason for the increase. The speculation in the market now that Wharf’s business overlaps with Wheelock’s business is the same as developing real estate and therefore considers Wharf to be acquired in the future. This is not unreasonable. However, if mergers and acquisitions should first consider the financial situation of Wheelock, Wheelock may be more than the asset price discount, and now Wheelock’s asset discount higher than Wharf, it seems out of fashion.
After that, we should pay attention to the changes of Wharf and Wheelock Fung shares and the development trend of Wharf. Such as Wheelock intends to mergers and acquisitions, the future should continue to purchase more equity Wharf, as to when the merger is an appropriate time, it seems or walk!
As for Wharf Property, it is reasonable because property quality is good and property discounts are low. The slight disadvantage is that the interest rate is weaker than the property trust. The advantage is that the property is located in a prime location. Normally, asset appreciation will continue. For the time being need not be too concerned about Wheelock holdings holdings or management holdings, I believe the short-term trend is only synchronized with the market.