Positive long-term investment value of public offering REITs: institutional investors increase their holdings and voluntarily disclose information

Based on the optimistic long-term investment value of public REITs, institutional investors increased their holdings of products and voluntarily disclosed information.

On September 12, CICC Fund Management Co., Ltd. (hereinafter referred to as "CICC Fund") issued a suggestive announcement on the change of equity of the REIT share holders of CICC Pross, saying that it had recently received the notification letter on the change of equity sent by First Way Holdings Co., Ltd Explain the changes in the equity of Zhongjin Pross REIT.

The announcement shows that the proportion of the first party holding the total share of CICC Pross REIT has increased from about 10.05% to about 11.05%. This increase is the initiative of the first party to increase the shares of the fund, which is a normal increase of the share holders of the fund, and will not have a significant impact on the governance structure and sustainable operation of the fund. This shareholding increase does not involve tender offer and disclosure of equity change report by information disclosure obligor. That is to say, this announcement is an advisory announcement issued by the holders who hold more than 10% of the fund units on their own initiative.

It is reported that since the approval of the listing of CICC Pross REIT, the first party has become one of the strategic institutional investors, holding the fund shares stably for a long time, and increasing its holdings on this basis for many times.

The relevant person of PROS (the original owner and external management organization of CICC PROS REIT) said: "This increase in shareholding represents investors' recognition of the future development prospects and long-term investment value of infrastructure projects represented by CICC PROS REIT, as well as the affirmation of the quality of assets and operation and management capabilities of PROS."

"This is a manifestation of the increasingly active market-oriented investment in the context of the normalized development of the domestic infrastructure public offering REITs market and the gradual improvement of the rules and systems." The relevant head of CICC Fund told the Securities Daily reporter.

According to Wind data, as of September 12, 23 of the 28 publicly offered REITs products that have been listed have declined to varying degrees since this year, and 2 of them have declined by more than 20%.

Although the overall performance of the public offering REITs market this year was not satisfactory, many original equity holders, fund managers and other investors increased their holdings at a low level, highlighting the long-term investment value of REITs and boosting market confidence.

For example, on May 6, China Securities Investment Fund Management Co., Ltd. announced that the original owner of China Securities Investment State Power Investment New Energy REIT, State Power Investment Group Jiangsu Electric Power Co., Ltd., planned to increase its holdings of the fund shares by bidding or buying in block transactions within six months from May 6, 2023, with a total increase of no more than 32 million fund shares; On May 25, Hua'an Fund Management Co., Ltd., the REIT fund manager of Hua'an Zhangjiang Everbright Park, announced that it planned to use its own capital to increase its share of the fund, with an increase of no more than 30 million yuan; On July 15, Ping An Fund Management Co., Ltd. announced that Guangzhou Communications Investment Private Equity Fund Management Co., Ltd., the original shareholder of Ping An Guangzhou Guanghe REIT acting in concert, intended to increase its share of the fund by buying in the secondary market or block trading, with an increase of no more than 80 million yuan.

Industry experts are also optimistic about the long-term investment value of public REITs. Dong Zhongyun, chief economist of AVIC Securities, said to the reporter of Securities Daily: "At present, the REITs market in China is still in the early stage of development, which is characterized by weak liquidity, low investor diversification, high shareholding concentration, etc. In the first half of 2023, against the background of slowing fundamental repair, there was a wave of adjustment in the REITs market, and the valuation of many REITs products fell significantly. As of September 8, there were 13 REITs whose valuations were lower than their corresponding ABS valuations, accounting for 46.4%, and they entered the value depression. However, in the long run, the REITs market has a good risk return ratio and allocation value. "

key word: Pross share fund Equity