Big Mac Beijing Shanghai High Speed Rail Rapid Transit Railway asset securitization speed up

category:Finance
 Big Mac Beijing Shanghai High Speed Rail Rapid Transit Railway asset securitization speed up


In addition to its fast speed, the profitability and fund-raising scale of the Beijing Shanghai high-speed railway have also become a highlight of this years A-share market. According to the prospectus, the operating revenue of Beijing Shanghai high speed railway from 2016 to 2018 and from January to September 2019 is 26.258 billion yuan, 29.555 billion yuan, 31.158 billion yuan and 25.002 billion yuan respectively, and the net profit after deducting non profits in the same period is 7.9 billion yuan, 9.03 billion yuan, 10.25 billion yuan and 9.5 billion yuan respectively. Both operating revenue and net profit are in a steady upward trend, and the net interest rate from January to September 2019 alone exceeded 30%.

According to the prospectus, the maximum number of shares issued by Beijing Shanghai high-speed rail in this public offering is 7557 million shares, far more than the number of shares issued by industrial Fulian in 2018. It is understood that the number of shares issued by IFLA in the IPO is about 1.97 billion, and the total amount of funds raised is 27.12 billion yuan. The plan of Beijing Shanghai high-speed rail to use the raised funds to acquire the equity of Beijing Fuzhou Anhui has aroused the high attention of the CSRC, and repeatedly raised relevant issues in the feedback and development review meeting.

Some insiders also expressed their concern about the impact of Big Mac enterprises on the market. In this regard, Wang Jiyue, a senior sponsor of former securities companies, told reporters that the Beijing Shanghai high-speed railway itself has a considerable profit. A large proportion of such enterprises will be subscribed by offline institutions as ballast stones, and the impact on the market is controllable.

The listing of Beijing Shanghai high-speed railway, in the view of many insiders, has promoted the process of railway mixed reform and installed a speeder for railway asset securities.

IEC focuses on three major issues

Before that, the CSRC released the feedback on the application documents of the Beijing Shanghai high speed railway, which raised 54 issues in four categories, namely, normalization, information disclosure, financial and accounting information, and others, which attracted wide attention of the market.

In the development and audit meeting on November 14, the development and audit committee focused on three aspects, namely, horizontal competition, entrusted transportation management mode and use of raised funds.

The first concerns competition in the same industry. The development and Audit Commission noted that the actual controller of Beijing Shanghai high speed railway is the railway line of the subordinate units of China Railway Group. The point-to-point parallel lines with 24 stations of Beijing Shanghai high speed railway or other stations in the city where the stations are located mainly include Beijing Shanghai ordinary speed railway, Beijing Shanghai auxiliary channel, Beijing Tianjin Intercity Railway and Shanghai Nanjing intercity railway. Therefore, the IEC asked representatives of the Beijing Shanghai high speed railway to explain whether there are alternatives, competitiveness and conflicts of interest, and whether they constitute horizontal competition.

It is not hard to see that the development and Review Commission is more concerned about the future profitability of the Beijing Shanghai high speed railway. On the issue of profitability risk, the development and Review Commission has proposed whether there is a substantial reduction in ticket prices and a substantial increase in purchase prices, thus substantially affecting the profitability of the issuer.

In addition, in view of the entrusted transportation management mode adopted by the Beijing Shanghai high speed railway, the development and Examination Commission proposed the pricing principle and fairness of the line use service, OCS use service, ticket sales service, station water supply service and other road network services provided by the Beijing Shanghai high speed railway to other railway transport enterprises that are not responsible for trains.

The development and Audit Commission also inquired in detail about the use of funds raised by the Beijing Shanghai high speed railway, which is the most concerned by the market. According to the prospectus, the funds raised by the public offering of shares of Beijing Shanghai high speed railway are intended to be fully used to acquire 65% of the equity of Beijing Fuzhou Anhui company after deducting the issuing expenses, with a total amount of up to 50 billion yuan. In the prospectus, the Beijing Shanghai High-speed Railway said the difference between the purchase consideration and the raised funds was solved by self financing.

However, the development and Review Commission still requires the Beijing Shanghai high speed railway to combine the existing lines, under construction and planned lines of the company, the role and position of the above lines in the high-speed railway system, the comparative indicators of passenger flow, the synergistic effect with the lines of the Beijing Shanghai high speed railway, the future development planning, etc., and to state the necessity and rationality of using the raised funds to acquire the company.

It is worth noting that the net profits of Jingfu Anhui in 2018 and the first nine months of 2019 are - 1.2 billion yuan and - 880 million yuan respectively. In this regard, the development and Audit Commission also requires the Beijing Shanghai high speed railway to explain the rationality and prudence of using the raised funds to acquire the company in combination with the assets scale, operation and profit situation, future capital demand, future profit and loss forecast of the company in the reporting period.

At last, the development and audit committee also raised questions about the fairness of the value of the acquired equity of 50 billion yuan in the case of continuous loss of Beijing Fuhui company.

Speed up of railway Asset Securitization

The listing of Beijing Shanghai high-speed railway, in the view of many insiders, has promoted the process of railway mixed reform and installed a speeder for railway asset securities.

When the IPO of Beijing Shanghai high-speed railway was announced in February this year, Northeast Securities once said that the IPO of Beijing Shanghai high-speed railway (passenger transport) and China Railway special cargo (freight transport) would be the key project for the joint-stock transformation of railway in 2019. This marks the restart of the securitization of Railway Assets, and the opening of Railway Assets from a closed environment, accelerating the reform of mixed ownership of railway. In addition, at present, the total liability of the railway is 5.28 trillion yuan, and the debt ratio continues to rise, reaching 65.2%. Promoting the listing of key enterprises such as Beijing Shanghai high speed railway will improve the balance sheet of the railway.

In addition to the Beijing Shanghai high-speed railway to be listed, two railways, Daqin Railway (601006. SH) and Guangzhou Shenzhen railway (601333. SH), have been successfully listed in the A-share market.

However, compared with the Datong Qinhuangdao railway and Guangzhou Shenzhen railway, the Beijing Shanghai high-speed railway has a longer distance and a larger span. Datong Qinhuangdao railway runs from Datong City, Shanxi Province to Qinhuangdao City, Hebei Province, and runs through Shanxi, Hebei, Beijing and Tianjin, with a total length of 653 kilometers. Guangzhou Shenzhen railway starts from Guangzhou station in the West and ends at Shenzhen station in the south, with a total length of 147 kilometers. With a total length of 1318km, the Beijing Shanghai high-speed railway runs through seven provinces and cities including Beijing, Tianjin, Hebei, Shandong, Anhui, Jiangsu and Shanghai, connects the two super hubs of Beijing and Shanghai, and passes through the densely populated eastern coastal provinces and regions. It was put into operation on June 30, 2011, and currently has transported 940 million passengers.

In terms of profitability, there is still a certain gap between the operating revenue and net profit of Beijing Shanghai high speed railway in 2018 and Daqin Railway, but it has surpassed Guangzhou Shenzhen railway.

In 2018, the operating revenue of Daqin Railway was 78.34 billion yuan, and the net profit after deducting Africa was 14.67 billion yuan.

In fact, the Beijing Shanghai high-speed railway is just the tip of the iceberg of railway asset securitization. In recent years, the railway corporation has taken many measures. Reviewing the step-by-step reform of China Railway Corporation, we should start from 2013 when the former Ministry of Railways separated administrative enterprises and completed the top-level design.

The central economic working conference held at the end of 2018 clearly pointed out that we should actively promote the reform of mixed ownership and accelerate the joint-stock reform of China Railway Corporation.

In April 2018, Shanghai Stock Exchange said that it had signed a strategic cooperation agreement with China Railway Corporation, and the two sides would carry out in-depth cooperation in expanding multiple financing channels, cultivating reserve listed enterprises, guiding the standardized development of enterprises and other aspects to achieve common development. Specifically, the Shanghai Stock Exchange and China Railway Corporation will further promote the issuance and trading of China railway construction bonds on the Shanghai Stock Exchange, promote the bond financing and asset securitization of eligible subjects or assets of China Railway Corporation on the Shanghai Stock Exchange, support China Railway Corporation to incubate, select and cultivate backup listed enterprises in its enterprises, and through IPO, merger and acquisition, listed enterprises By means of industrial refinancing, we will promote the reform of capitalization, equity and securitization of railway enterprises in batches and layers.

At the beginning of 2019, Lu Dongfu, then general manager of China Railway Corporation, said that one of the priorities of this years work is the joint-stock reform, including promoting the listing of key projects, market-oriented debt to equity swap and refinancing of listed companies.

In January 2019, the 300 billion yuan railway debt of China Railway Corporation was approved. The money will be used for railway construction projects and the purchase of rolling stock to inject funds for railway construction. In the same month, the national development and Reform Commission decided to start construction of 26 railway projects and 19 reserve projects in 2019.

On June 18 this year, China Railway Corporation restructured and established China National Railway Group Co., Ltd., which was listed in Beijing on the same day. After the reform, China Railway Group was established as a state authorized investment institution and state holding company with a registered capital of 1.74 trillion yuan. It is managed by the central government, mainly engaged in railway passenger and freight transportation, and has diversified operations.

It is worth noting that in addition to the Beijing Shanghai high speed railway, which is going to be listed soon, China Railway Special Cargo Logistics Co., Ltd. has signed a pre listing guidance agreement with CICC in September this year, officially accepted the listing guidance, and intends to be listed on the small and medium-sized board of Shenzhen stock exchange.

Source: First Financial Editor: Guo Chenqi, nbj9931