Leju Finance Deng Xinni was sent from Beijing
Hoarded money for a year, Financial Street Property (01502. HK) finally struck.
The cash in hand of Financial Street Property has increased to 1.379 billion yuan at the end of 2020, an increase of more than 100% last year. There is a lot of cash, but the expenses are very small, and many people jokingly call the financial street property "hoarding cash, not spending money".
After the close of trading on June 23, Financial Street Property announced that it would acquire a 65% stake in Zhuzhou Hongda Property Management Co., Ltd. ("Hongda Property") for about 130 million yuan.
Nine minutes apart, Financial Street Property once again shared another M&A news, revealing that there is still an acquisition under negotiation, and the target company is from Hong Kong.
In addition to thickening their own assets, shareholders are also transporting. The Beijing Yongtaiheng Health Service Center ("Yongtaiheng"), which was originally under the jurisdiction of the Health Service Management Office of Xicheng District of Beijing, intends to be transferred to the Financial Street Group as a whole, and the Financial Street Group has requested that this part of the assets be transferred to the financial street property.
If you don't come, you're already there, and if you don't come, you're three. In less than 20 minutes, financial street property has circled three companies, which is really "hoarding money for a year, using money for a day".
Whether it is Hongda Property, or hong Kong's unknown target, or Yongtaiheng, the abacus in the hands of Financial Street Property is playing fast, cutting into the field of municipal services, expanding the territory to Hong Kong, health services are also included in it, and the subdivision areas outside the basic property management have gradually been included in its compulsory items.
First merger
Financial Street Property tightened its "money bag" and showed caution about mergers and acquisitions. After the listing, the first merger and acquisition, it looked at Hongda Property. In addition to hitting the free ride on municipal projects, the simple equity relationship behind Hongda Property may also be one of the reasons.
He Wei is the sole shareholder of Hongda Property, and he has acquired all the shares before the Financial Street Property entered the market. Taking over the olive branch thrown by the financial street property, he sold 65% of the equity and kept 35% of the equity himself.
He Wei was able to monopolize 100% of the equity, which was obtained in 11 years and increased four times.
At the beginning of its establishment, Hongda Property had a total of 5 investors, namely He Wei, Tang Yongqiao, Huang Peifang, Qu Lingyu and Li Sijun, who invested 155,000 yuan, 45,000 yuan, 45,000 yuan, 245,000 yuan and 10,000 yuan respectively.
Shareholders came and went, and in the end only He Wei was left. In December 2017, He Wei took over all the shares from the other three shareholders, and his investment amount had reached 20.01 million yuan, an increase of 128 times over the original capital contribution.
The shareholding structure is clear, and there is no shackles from real estate companies. Different from the general property company with related housing enterprises, although Hongda Property has a corresponding property, this housing enterprise may also be attached to Hongda Property.
Hongda Property was established in 2002, while Zhuzhou Hongda Real Estate Development Co., Ltd. ("Hongda Real Estate") was only late in 2013. Different from the plate structure of the property under the general real estate company, the official website of Hongda Real Estate is attached to Hongda Property.
Not only that, HTC Real Estate also shares the shareholders and executives of HTC Property. Among the shareholders of Hongda Real Estate, He Wei, He Xi and Deng Yali, among them, He Wei and He Xi, who have the same surname, all work in Hongda Property.
Gross margin is low
Before the acquisition of Hongda Property and the succession of Yongtaiheng, it not only made the first acquisition of mergers and acquisitions, but also recruited two "generals" at one time.
In the business classification of financial street properties, there is no subdivision of municipal services, but is included as "public property, hospital, education and others".
As of the end of last year, the scale of financial street properties under management reached 24.719 million square meters. Among them, office buildings, complexes, retail commercial buildings and hotels, residential properties, public properties and other management areas accounted for 26.8%, 4.1%, 2.5%, 48.6% and 18% respectively.
Nearly half of the five major formats are residential properties, and public properties and others account for less than 20%. In terms of gross profit division, financial street properties are divided into commercial and non-commercial properties, and public properties and others are classified as non-commercial properties.
Last year, the gross profit of non-commercial properties of Financial Street Property was 57.869 million yuan, and the gross profit margin was only 14.4%, far lower than the 26.6% of commercial properties. Now the intention to take down two companies that mainly engage in municipal services may also be to boost the gross profit margin that is not high.
At present, Yongtaiheng mainly provides property management and logistics services for health management institutions and medical institutions in Xicheng District, Beijing. By the end of 2020, a total of 11 property service projects, 15 community health service centers, and 12 staff canteen projects have been undertaken, with a total of 38 projects.
Hongda Property's projects are more varied than Yongtaiheng's. At present, it has 50 property management service projects, covering government agencies, noble villas, commercial office buildings, public leisure places, universities, residential and other projects, with a total management service area of more than 10 million square meters.
In the announcement, the specific profit data of Hongda Property was not disclosed, and it was difficult to judge how much revenue the project that cost 130 million yuan could bring to the financial street property in the future. In 2020, the revenue, net profit and net profit margin of Financial Street Property were 1.13 billion yuan, 116 million yuan and 10.23% respectively, which had a low sense of existence among all listed property companies.
"Especially in the field of urban sanitation and urban municipal services, we have rich experience in operation and management and market competitiveness." Merger and acquisition of Hongda Property, Financial Street Property seems to pay more attention to its "industry experience", it said in the announcement, deep ploughing in the local area for many years, Hongda Property has accumulated a number of projects such as the Party School of the Municipal Party Committee, the Municipal Labor and Social Security Bureau, the Municipal Science and Technology Bureau, and the Municipal Tobacco Bureau.
Open the floodgates and release "money"
Nearly a year after listing, Financial Street Property announced the news of mergers and acquisitions for the first time, and once officially announced two. The identity of Hongda Property has been revealed, but it is not clear about another company, only that it is a Hong Kong company.
In the past year, the scale of financial street properties has grown slowly. In 2020, its area under management increased by 4.862 million square meters over the previous year, reaching 24.719 million square meters, an increase of less than 25%, ranking low among listed property companies.
In terms of geographical distribution, there is also a slight imbalance. As of December 31, 2020, its business covers 13 provinces and cities in six regions of North China, Southwest China, East China, South China, Northeast China and Central China, accounting for about 44%, 19.7%, 16%, 13.5% 1.1% and 5.4% respectively.
With a presence in 13 provinces and cities across the country, Financial Street Properties has extended its reach to Hong Kong through another unpublished merger.
"The money hoarded since the listing can just come in handy" In 2020, Financial Street Property held 1.379 billion yuan, an increase of 106.98% over the same period of 2019 of 666 million, and nearly half of the funds came from the amount of funds raised by stock financing.
At the time of listing, the net capital raised by Financial Street Property reached 648 million yuan, while by the end of 2020, only 5.56 million yuan had been spent, and about 643 million yuan was left.
Last year, Financial Street Property issued a total of two shares, with a total net proceeds of $648 million, deducting various expenses of about $45.3 million. Last year, the total financing cost reached 53.61 million yuan, an increase of about 30 times year-on-year.
In addition to financing proceeds, trade receivables in liquid assets also contribute to a level second only to the former. Accounts receivable from Financial Street Properties in 2020 were RMB154 million, compared to RMB124 million in 2019, an increase of 24.19% year-on-year. Among them, the accounts receivable of related parties were 70.4 million yuan, an increase of 68.78% year-on-year.