Baolong Commercial gradually moved its strategic goals to the south.
Editor’s note: This article is from Economic Observer Online , Author: Raoxian Jun .
At the end of 2019, Baolong Commercial (09909.HK) achieved its small target of splitting and listing.
On December 30, 2019, Baolong Commercial Management Holdings Co., Ltd. was officially listed on the Hong Kong Stock Exchange and became the first mainland-listed asset-light commercial operator in Hong Kong.
In terms of business, Baolong said that it took less than one year from the launch of the listing plan to the official listing in early 2019. The main reason is that Baolong Real Estate is a listed company and has strict specifications and requirements in terms of information disclosure and finance. Therefore, After the split, Baolong Commercial was able to meet the relevant listing requirements of the Hong Kong Stock Exchange.
Taking “the first asset-light commercial operator listed in Hong Kong” as a label, Baolong Commercial threw the operating results of the past years to the market, but doubts also came with it. The model of purely service fees under the asset-light model Can I get a valuation premium? How can commercial projects with low occupancy rates increase value through operations?
Xu Huafang, president of Baolong Real Estate Holdings Co., Ltd. and chairman of Baolong Commercial Management Holdings Co., Ltd., said that the separate listing of Baolong Commercial was not for fundraising, but to train the team and allow the business to grow independently.
Light assets
Compared to Wanda, one of the giants of the Hong Kong Stock Exchange, Baolong currently has a smaller market value of less than HK $ 6 billion.
The prospectus of Baolong Commercial shows that during the spin-off, Baolong Commercial reorganized several of its project companies to Baolong Holdings, leaving only the two major businesses of commercial operations and property management services to split into Baolong Commercial. , Owns four commercial operation brands including “Baolong One City”, “Baolong City”, “Baolong Plaza” and “Baolong Tiandi”.
Prospectus data shows that as of the first half of 2019, Baolong Commercial’s commercial operation services have contracted and managed 59 retail commercial properties with a contracted building area of about 7.5 million square meters, ranking fourth in the country and occupying a market share of 0.8 %.
Although the future development goal is to export the asset-light model, the main source of revenue for Baolong Business currently depends on the property operation held by Baolong. Prospectus data show that in 2018, Baolong Business came from the parent company’s business and Property income was 1.095 billion yuan, while Outreach’s property business income was only 53.3 million yuan, accounting for a large gap.
Because it does not involve asset-heavy business, compared with traditional real estate companies, property management companies, and commercial real estate companies, Baolong Commercial’s revenue and profit figures seem to be “light”.
In 2016-2018, Baolong Commercial’s revenue was RMB 752 million, RMB 972 million, 1