On August 6th, COFCO Real Estate confirmed that the reason for the suspension was to plan a major asset restructuring. This information once again made the news of COFCO's real estate business restructuring rampant. Under the overall strategy of "slimming and keeping fit", COFCO's real estate business will inevitably embark on the road of more optimized asset allocation. However, the increase in volume brought by integration does not mean the enhancement of strength. Only by finding a suitable business breakthrough can COFCO's real estate business have the ability to catch up.
Confirmation of reorganization
August 24th will be an important day for COFCO Real Estate. On August 6, COFCO Real Estate announced that it confirmed that the major events being planned constituted a major asset restructuring, so it was transferred to the major asset restructuring procedure on August 7 and continued to suspend trading. Prior to this, COFCO Real Estate has also announced that it expects to disclose the restructuring plan within no more than one month, that is, to disclose major asset restructuring information as required before August 24.
Although COFCO Real Estate did not disclose the contents of major asset restructuring, this restructuring is regarded by the industry as the beginning of COFCO's "moving knife" for the real estate business sector.
It is worth mentioning that on July 31, COFCO Real Estate announced that the company's 3.1 billion yuan fixed increase plan was invalid. According to the original plan, the money would be used for two acquisition projects and three construction projects, but the plan expired because it failed to obtain the written approval document from the CSRC. Some analysts believe that the internal restructuring of COFCO's real estate business segment may also interrupt the fixed increase plan.
In addition, before the suspension of COFCO Real Estate on July 24th, the seats of the two institutions bought 81.82 million yuan of COFCO Real Estate, accounting for 19%. From the suspension of trading to the failure of fixed increase, and then to the stock surge, there are indications that a drama of change is about to be staged on the platform of COFCO Real Estate, and the benefits outweigh the disadvantages.
Real estate integration
Some people in the industry told beijing business today that the major asset restructuring of COFCO Real Estate must be related to the internal adjustment of COFCO, and the integration of real estate business sectors and the backdoor listing of COFCO Capital will be the main contents.
COFCO owns two listed real estate companies, among which COFCO listed on Shenzhen Stock Exchange mainly focuses on residential development, while Joy City Real Estate listed on Hong Kong Stock Exchange focuses on the development of commercial real estate mainly based on Joy City. In 216, Zhao Shuanglian succeeded Ning Gaoning in charge of COFCO. Since Zhao Shuanglian took office, the plan of "slimming and keeping fit" has been launched within COFCO. According to the "Thirteenth Five-Year Plan" of COFCO, COFCO promoted the overall listing of grain and oil, food, finance and real estate in 219. "From the perspective of the grain, oil and food sectors, COFCO's reform idea is to get rid of some chicken ribs business lines and carry out effective similar integration to optimize capital allocation, so the integration of real estate business sectors will be carried out sooner or later." An industry person who did not want to be named introduced it.
In fact, as early as March 211, Ning Gaoning, the former chairman of COFCO, also suggested that after the merger of the two real estate business platforms, COFCO Real Estate and COFCO Real Estate (the predecessor of Joy City Real Estate), they would be listed as a whole in the form of A+H, but they have been shelved until today for various reasons.
In the eyes of the above-mentioned insiders, the integration of COFCO's real estate business sector is the embodiment of COFCO's overall reform will. However, the failure to substantially promote the integration since the Ning Gaoning era also means that the integration is not easy. Among them, how the two platforms cooperate at the project level, how to balance funds, and how to integrate and match teams and management systems all require top-level design.
However, fortunately, the real estate business of COFCO has the conditions to be successfully integrated in the management team and management system, and Zhou Zheng, the key person, has to be mentioned here. It is reported that the chairmen of COFCO Real Estate and Joy City Real Estate are both Zhou Zheng, and Zhou Zheng is the chairman of COFCO Land. According to official website of COFCO, COFCO Land is a specialized company engaged in real estate development under COFCO, and COFCO currently has 18 specialized companies like COFCO Land. In other words, COFCO Real Estate and Joy City Real Estate are two different listed companies, but both of them are managed by COFCO Land.
At this stage, the integrated personnel management has been established. In some regional companies, COFCO Real Estate and Joy City Real Estate also have managers deeply involved in each other's projects. "On the one hand, it shows that the integration of management teams will not be too difficult in the reorganization. On the other hand, it also shows that the management teams of the two companies are not independent, which also affects work efficiency to some extent." People close to COFCO Real Estate said.
There is an urgent need to break through
Practicality. In fact, COFCO's real estate business has been integrated for more than ten years. In 213, the substantial promotion was that COFCO injected commercial real estate into Hong Kong shell resources, realizing a clear division of real estate business on the capital platform. As a result, COFCO's real estate business moved from a single capital platform to a dual capital platform. However, even so, the performance of COFCO's real estate dual platform is still not eye-catching.
The 216 financial report of COFCO Real Estate shows that the contracted amount was 19.962 billion yuan, the operating income was 18.25 billion yuan, the total profit was 2.234 billion yuan and the net profit was 1.333 billion yuan. Joy City Real Estate's operating income in 216 was about 6.987 billion yuan and its net profit was 1.275 billion yuan. In the TOP1 of Sales Amount of Real Estate Enterprises in China in the First Half of 217 published by Viewpoint Index Research Institute, COFCO Real Estate ranked 67th with sales of 12.2 billion yuan, ranking lower. "COFCO's commercial properties are listed on the Hong Kong Stock Exchange by backdoor, partly because of the tepid performance of COFCO Real Estate, and COFCO also wants to use COFCO Real Estate (the predecessor of Joy City Real Estate) to broaden financing channels, thus achieving rapid development of commercial real estate." People close to COFCO said frankly, "From the stock price and market value of Joy City, it is not ideal. The overall market value is more than 16 billion Hong Kong dollars, and the recognition of the capital market is not high."
When COFCO injected commercial property resources into the listing platform of the Hong Kong Stock Exchange, the focus of the market was whether COFCO, which operates on the dual capital platform, could catch up with others in the real estate business. However, from the current performance, the catching-up strength and speed were not strong. Then, after the integration and reorganization, can COFCO get more applause on the real estate business stage? In this regard, the above analysts believe that it is not difficult from the current point of view. "After the integration, in addition to the existing holding and selling properties, COFCO should also find a rationality for the real estate business, or more accurately, a breakthrough. After all, the current industry situation is that the stronger is stronger, and only by finding a suitable export can the latecomers catch up." It is understood that the combination with the main industry agriculture may be the breakthrough that COFCO is looking for for for the real estate business.
In addition to the integration of real estate business, some institutions pointed out that the reorganization of COFCO Real Estate will also be related to the asset securitization of COFCO. It is reported that COFCO Real Estate may become a platform for COFCO Capital to go public. It is reported that the specialized company of COFCO's financial business is COFCO Capital, and its business scope includes trust, futures, insurance, banks and funds. According to the internal setting of COFCO, COFCO Capital will choose different securitization schemes such as restructuring and IPO according to the market environment. For this restructuring, COFCO Real Estate did not give more explanation except for the announcement of continued suspension.