Add another property company to the capital market.
Editor’s note: This article is from Daily Economic News, Reporter: Chen Li, authorized to reprint
Today (October 18) morning, Sichuan Blu-ray Garbo Service Group Co., Ltd. (02606, HK; hereinafter referred to as Blu-ray Garbo) was successfully listed on the Hong Kong Stock Exchange. The opening price was HK$44.4, up 20% per share. As of the close of the day, Blu-ray Garbo’s share price was HK$42.05, up 13.65%, with a market capitalization of HK$7.218 billion.
At this point, there are 16 property service companies listed on A shares and Hong Kong stocks. Together with the Binjiang Service and Aoyuan Property listed in the first half of the year, and the Xinyuan Service listed on the 11th of this month, there have been four mainland property companies listed on the Hong Kong Stock Exchange this year. “Daily Economic News” reporter noted that Blu-ray Garbo is also the first listed property company in the Southwest.
Revenue still depends on the parent company
Since 2018, the listing of property listings by real estate companies has become a boom. Blu-ray Garbo is also a property management service provider that was split by the top 100 real estate companies Blu-ray Development (600466, SH). Currently, it has 425 projects in 69 cities across the country.
The prospectus shows that in the past three years (2016~2018), Jiabao’s revenue and profit continued to grow, with revenues of 658 million yuan, 923 million yuan and 1.464 billion yuan respectively, with a compound annual growth rate of 49.2%; The profit for the period was 101 million yuan, 185 million yuan and 297 million yuan, with a compound annual growth rate of 71.48%. As of June 30 this year, Blu-ray Garbo service revenue reached 933 million yuan, an increase of 58.8% year-on-year. The total profit during the period reached 187 million yuan, a year-on-year increase of 108%.
The “Daily Economic News” reporter noted that, like most property companies divested from real estate companies, most of Blu-ray Garbo’s revenue comes from Blu-ray Group. According to the prospectus, Blu-ray Garbo accounted for 85.0%, 68.4%, 54.9% and 52.4% of the revenue from the Blu-ray Group in 2016-2018 and as of June 30, 2019. Although the proportion of revenue from the parent company has been shrinking year by year, it still exceeds 50%.
Data Source: Blu-ray Garbo Prospectus Drafting: Wei Wenyi
In fact, since 2016, Blu-ray Garbo has begun to accelerate the expansion of the expansion, through mergers and acquisitions to reduce the proportion of Blu-ray development properties in the Blu-ray Garbo in the management of the property. In 2016~2018, Blu-ray Garbo successfully implemented 6 mergers and acquisitions, including the acquisition of Shanghai Zhenxian and Hangzhou Luyu in 2017, and successfully entered the Yangtze River Delta region. At present, Blu-ray Garbo’s development of the Blu-ray Group’s property has continued to decline from 77.8% in 2016 to 42.9% in the first half of 2019.
The road to listing is full of twists and turns
The road to the listing of Blu-ray Garbo is a wave of twists and turns.
In December 2015, Blu-ray Garbo was listed on the New Third Board and delisted from the New Third Board in the second half of 2018. In March of this year, Blu-ray Garbo submitted its application for listing to the Hong Kong Stock Exchange for the first time. After the prospectus passed the hearing, the Blu-ray Garbo, which was scheduled to be opened on June 30, was eventually postponed.
At that time, the relevant person in charge of Jiabao Co. said in an interview with the reporter of “Daily Economic News” that due to various factors such as the issue window of the Hong Kong stock market, the company decided to update the prospectus after comprehensive consideration and then choose the opportunity to issue. However, according to industry sources, the Blu-ray Garbo is postponed because the issue price is overpriced, and there is a shortage of cornerstone investors to delay the issuance.
On October 2, the sponsor received a letter from the Hong Kong Stock Exchange and agreed in principle to the application for the public offering of H shares issued by Jiabao and listing on the main board of the Hong Kong Stock Exchange.
On October 17, Blu-ray Garbo issued an announcement to sell approximately 42.916 million shares. Among them, Hong Kong sold 17,166,500 shares, and the international offering was 25.749 million shares at an offer price of HK$37 per share. The Hong Kong Public Offering is a modest over-subscription which is equivalent to approximately 52.89 times the total number of Hong Kong Offer Shares initially available for subscription under the Hong Kong Public Offering.
According to Leju Finance, when the on-site media asked about the fierce competition between the property management companies in Hong Kong and the property management companies, Yao Min, chairman of Blu-ray Garbo Service, said that the property management market is very large. In the trillion market, the industry is good for the Blu-ray Garbo service. “We want to be the best ourselves.”