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Investors should invest rationally in the first lifting period of public REITs

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Investors should invest rationally in the first lifting period of public REITs

China Net Finance, June 22 (Reporter Zhang Mingjiang) Today (June 22), China International Finance Fund issued an announcement that China International Finance Railway Construction Chongqing Yusui Expressway Closed Infrastructure Securities Investment Fund (hereinafter referred to as China International Finance China Railway Construction Expressway) REIT) ended its fundraising ahead of schedule, and another high-profile public offering REITs “sold out in one day”.

Since the beginning of this year, the market has continued to undergo in-depth adjustments, and the new fund issuance market has encountered “extremely cold”, while the new fund issuance market only has two types of “net red” funds such as publicly offered REITs and interbank depository index funds. It has been one year since the listing of the first batch of publicly offered REITs, and the first lifting of the ban on publicly offered REITs is coming. The fund company reminds: Investors are advised to invest rationally and avoid chasing up and down.

  The first lifting period for public REITs is coming

Today (June 22), China International Finance Fund issued an announcement that China International Finance Railway Construction Chongqing Yusui Expressway Closed Infrastructure Securities Investment Fund (hereinafter referred to as China International Finance China Railway Construction Expressway REIT) ended the fundraising ahead of schedule. The announcement shows that the fund was originally scheduled to The fundraising period is from June 21 to June 22, 2022. The announcement shows that June 21, 2022 is the last subscription day for public investors, and no subscription applications from public investors will be accepted on June 22.

According to the announcement, the initial number of fund shares sold by China National Railway Construction Expressway REIT to public investors is 37.5 million, with a scale of about 360 million yuan. According to the news, the fund had more than 10 billion yuan of funds subscribed on June 21. The fund will start a proportional allotment, and the market will reproduce the “sold out in one day” fund.

Public REITs and interbank CD index funds are the most sought-after “net red” funds in the market this year. Flush iFinD data shows that, except for a few interbank CD index funds, many public REITs released this year are very popular among investors. All products were sold out in one day and proportional distribution was started. Among them, Huaxia China Communications Construction REIT, which was released in April this year, even reached 152.412 billion yuan in total pre-placement, and its placement ratio was only 0.84%, a record low. Several other publicly offered REITs also performed well in their first offerings.

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In addition, the first batch of 9 public infrastructure REITs released last year had a listing period of 12 months, and the infrastructure fund shares held by some strategic investors met the conditions for lifting the restrictions, and the restrictions were lifted yesterday (June 21). According to the recently released announcement on the lifting of the ban on sales, the first batch of nine publicly offered REITs released a total of about 2.171 billion shares, accounting for 33.92% of the total size of the nine publicly offered REITs (6.4 billion shares), and exceeding the existing circulating stock size (2.074 billion shares). ). This lifting of the ban will increase the circulation share to 66.33% of the total share of 9 products, greatly releasing the liquidity of the public REITs market.

  Investors should invest rationally

With the arrival of the first batch of 9 publicly offered REITs to lift the ban, what kind of impact this type of products will have on the market and the investment risks arising from product premiums have also attracted market attention.

The data shows that as of June 21, 2022, the average premium rate (relative to the issue price change) of the first batch of 9 public REITs was 21.21%, and their impressive performance has also attracted investors’ attention, but some industry insiders said , the lifting of the ban may trigger a premium callback.

Bosera Fund said: Since the listing of China‘s public REITs for one year, various investment participants in the market have a relatively mature understanding of the new REITs, especially institutional investors are gradually forming an investment logic and framework suitable for it. As a new type of financial tool with the attributes of industry-finance integration, REITs can promote the improvement of the operation and management of underlying projects, improve the efficiency of industrial reinvestment, and build a closed loop of project investment and financing. Their value creation in the context of industry-finance integration may have an impact on their own prices. long-term support. The first anniversary of the smooth operation of the first batch of REITs pilots has laid a good foundation for the trillion-dollar market. It is believed that with the joint efforts of all parties, the REITs market will be further improved and high-quality sustainable development.

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Bosera Fund said: At present, my country’s public REITs are still in the pilot stage, and the market supply exceeds demand, which leads to the high premium rate of public REITs. However, the investment value of REITs is based on the actual operation of real estate, and the net cash generated from asset operation is the main source of dividends and dividends for investors, providing investors with stable and long-term income through operational management upgrades and asset appreciation. Since the core of REITs valuation and pricing is to evaluate their long-term stable dividends and their ability to increase asset appreciation by improving their operating levels, the secondary market prices of REITs should fluctuate around the valuation of the underlying assets, and the cash dividends of publicly offered REITs can be obtained through According to the discounted cash flow valuation model, the characteristics of the product are relatively stable dividend payout and strong certainty, so it is more suitable for long-term holding and value investment.

Mo Yifan, administrative director of the infrastructure and real estate investment department of China AMC, said that the underlying assets of public REITs products are characterized by long-term stable operation and stable dividends, and the corresponding intrinsic value is relatively stable. The transaction price in the secondary market is ultimately based on assets. Intrinsic value fluctuates. We believe that the lifting of the ban does not affect the intrinsic value of the underlying assets. After the lifting of the ban, the circulating market value of REITs will increase, the secondary market trading activity may increase in the short term, and the investor group will be further diversified, which may also promote the rational return of the secondary market price to the intrinsic value of the product. Short-term investors with relatively lucrative profits in the early stage may choose to take profits, which will have an impact on the secondary market prices of REITs products; but if the downward volatility is large, it will also be a good layout opportunity for long-term investors. Therefore, the price trend of the secondary market needs to be judged based on the results of the game between investors and funds on the long-term and short-term value.

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Mo Yifan said: Investors are advised to invest rationally and avoid chasing up and down. If there is a relatively large pullback in the secondary market price, it may be a good opportunity for bargain-hunting; if the prices of some products with high price increases further rise, significantly exceeding their intrinsic value, it is not recommended to chase higher in the short term. Overall, the investment of publicly offered REITs should be comprehensively considered and judged based on the intrinsic value of the underlying assets, the implied long-term return on investment, the liquidity of the secondary market, and the investor’s own investment return requirements.

(Editor in charge: Wang Qingyu)

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