On October 27, Juneyao Airlines released its financial results for the third quarter of 2021.
According to the financial report, Juneyao Airlines in the third quarter:
Operating income of 3.081 billion yuan, an increase of 2.67% year-on-year.
The net loss was 152 million yuan, down 177.63% year-on-year.
Juneyao Airlines, the third quarter loss is mainly due to the impact of the domestic epidemic situation in August, of which Nanjing is one of the important markets, Juneyao Airlines has a branch in Nanjing.
The outbreak in Nanjing has had a great impact on the operation of Juneyao Airlines.
However, due to Juneyao Airlines' outstanding performance in the second quarter, it achieved a net profit of 381.6 million yuan.
Therefore, in the first three quarters, the operating net income of Juneyao Airlines was about 9.129 billion yuan, an increase of 27.33% year-on-year.
Juneyao Airlines' net loss in the first three quarters was 47.74 million yuan, which was not high.
However, at the same time, Juneyao Airlines announced another piece of news, which attracted the attention of Wing Ge.
That is the news of the purchase of real estate from the controlling shareholder JuneYao Group for 1.17 billion yuan.
#01
Purchase of the property of the majority shareholder at a premium of 1 times
Displayed according to the content of the announcement.
Juneyao Airlines intends to purchase part of the houses, corresponding land use rights and supporting equipment held by JuneYao Group in the Shanghai Pilot Free Trade Zone as the company's collaborative office space, call center, operation guarantee place and staff dormitory.
The appraised value of the subject matter of the transaction is RMB1.261 billion, the transaction price is tentatively set at RMB1.165 billion (including tax) and the amount excluding tax is RMB1.110 billion.
1. The subject of the transaction
The subject assets of the transaction are JuneYao Group's buildings, buildings 2, 3, 4, 5, 6, 7 and 9, corresponding land use rights and supporting equipment located in Lane 2, Kangqiao East Road, China (Shanghai) Pilot Free Trade Zone.
The book value is $585 million.
JuneYao Group obtained the State-owned Land Use Certificate for the subject assets through the transfer on August 2, 2001, and completed the "Real Estate Property Rights Certificate" for the subject assets on January 27, 2021 and June 4, 2021.
Part of the assets subject to the transaction and the corresponding land use rights (Buildings 2, 4, 6 and 9) were mortgaged to the Wenzhou Branch of Shanghai Pudong Development Bank Co., Ltd. due to the loan. JuneYao Group will handle the mortgage release procedures of the corresponding assets before the completion of this transaction to ensure the smooth implementation of the transaction.
2. Transaction price determination method
Juneyao Airlines hired Beijing Zhuoxin Dahua Asset Appraisal Co., Ltd. as an asset appraisal agency to issue the Appraisal Report, which provides an appraisal value of RMB1.261 billion and a book value of RMB585 million, with an appraisal reference date of August 31, 2021 and a value type of market value.
Due to the price difference between different floors, the filing approval price submitted by JuneYao Group to the competent authorities is 36,000 yuan / square meter.
The pricing of the related party transaction is based on the filing price of the subject matter of the transaction, with reference to the appraisal value to give a discount, the provisional transaction price is RMB1.165 billion, and the final transaction amount is subject to the amount confirmed by the officially signed contract.
The total construction area of the underlying assets is 36,907.37 square meters, the transaction price is 1,165.3517 million yuan, and the average price is 31,600 yuan per square meter.
3. Payment Arrangements
In order to ensure the smooth implementation of the transaction, the specific methods and delivery arrangements for payment and delivery were clarified through consultation between the two parties to the transaction, and the proposed plan was as follows:
First, within three working days of the conclusion of the agreement, Juneyao Airlines will pay a 20% advance payment to JuneYao Group;
Second, JuneYao Group handles the mortgage release and property certificate procedures after receiving the advance payment;
Third, after the completion of the mortgage release procedures of JuneYao Group, Juneyao Airlines pays 50% of the price when it handles the property certificate of the subject of the transaction;
Fourth, Juneyao Airlines paid the balance of 30% after officially receiving the property certificate.
#02
Purchase Purpose
According to Juneyao Airlines, the purchase of the property of the majority shareholder was based on the following reasons:
With the development needs of the company, in order to alleviate the contradiction between the existing office conditions of the company and its subsidiaries and the business development plan, we will further create a good and stable office environment for employees and enhance their sense of belonging.
The Company intends to purchase the houses located in Buildings 2, 3, 4, 5, 6, 7 and 9, corresponding land use rights and supporting equipment held by JuneYao Group, Located in Lane 2, Kangqiao East Road, Shanghai Pilot Free Trade Zone, as the Company's collaborative office space, call center, operation support place and staff dormitory.
Buildings 2, 3, 4 and 9 are for daily office use, and Buildings 5, 6 and 7 are used for staff dormitories, with a total area of 36,907.37 square meters.
It is proposed to be used as a collaborative office space, call center, operation support place and staff dormitory of Juneyao Airlines (of which Buildings 2, 3, 4 and 9 are for daily office use, and Buildings 5, 6 and 7 are used as staff dormitories, with a total area of 36,907.37 square meters).
It is worth noting that the land tenure of these properties is only 19.92 years.
#03
Three observations
It is interesting to note that JuneYao Health, another listed company under JuneYao Group, also bought a house from the major shareholder JuneYao Group in December 2020 shortly after its listing, also in Shanghai.
On December 6, 2020, JuneYao Health issued an announcement that the company intends to purchase the property of the controlling shareholder, JuneYao Group, located in the Shanghai Pilot Free Trade Zone, and the transaction price is tentatively set at 230.9488 million yuan.
Based on the above transaction prices, the transaction premium rate reaches 147%.
Did JuneYao Group take a lot of land in the Shanghai Free Trade Zone?
Regarding the purchase of the property of the major shareholder of Juneyao Airlines, Yi Ge has several views.
First, is the current timing of buying a house appropriate?
As we all know, the current civil aviation industry is more difficult, and the life as an airline is even more difficult.
Although Juneyao Airlines is a leader in private aviation, it is debatable whether the timing of spending a lot of cash to buy the parent company's property is appropriate.
As of the end of September, Juneyao Airlines had only 1.503 billion yuan on its books, which was 1.5 billion yuan less than the end of June.
The gearing ratio also climbed to 75.71%.
Airlines are inherently asset-heavy operations, and it is not advisable to increase asset turf in today's circumstances.
In addition, if the major shareholder is willing to support the development of Juneyao Airlines, they can lease the property to Juneyao Airlines now, and when the conditions are ripe in the future, it is better to buy it when the operation of Juneyao Airlines is better.
Second, why didn't Juneyao Airlines build it itself?
As a local airline in Shanghai, Juneyao Airlines is also an important development force for Shanghai to build an international shipping center.
Now That Shanghai is vigorously promoting the construction of the Lingang area, in the case of Juneyao Airlines, it should be possible to obtain land for the directional use of aviation development.
If you can get it, the cost should be relatively low, is it cheaper than buying from the major shareholder?
The third is to appreciate some of Juneyao Airlines' practices.
At the same time, Wing Ge also saw that Buildings 5, 6 and 7 were used for staff dormitories, and Wing Ge was very much in favor of this approach.
We know that the income of civil aviation employees has not increased substantially in recent years, and coupled with the impact of the epidemic, the income of many employees has deteriorated.
Therefore, when it comes to income, civil aviation practitioners are bitter.
In fact, caring for civil aviation practitioners is not only the obvious treatment of wages and bonuses.
Some invisible benefits are equally important.
For example, housing, renting, and buying a house.
Juneyao Airlines is in Shanghai, where housing prices are unattainable, and it is basically impossible for young people to expect to buy a house with a salary.
Even if it is rented, the cost is very high.
Many netizens have consulted me about some problems in the civil aviation industry, to be honest, the house is a big mountain.
Juneyao Airlines' practice of providing dormitories for employees is worth learning and emulating from airlines, because a young person working in a new city first has to solve the problem of living.
And the cost of living is very high.
If all units can find ways to solve the difficulties and worries of living for the majority of civil aviation employees, then it is a real civil aviation power and a real happy civil aviation.