Red Weekly Reporter | Xiong Ying
On May 25, the share price of China International Trade fell 8.13%, hitting the limit down during the session. However, before this, China International Trade has risen continuously for for nearly a month, and the stock price has nearly doubled.
Strangely, behind the sharp rise in stock prices, China International Trade has neither exceeded expectations for performance support nor disclosed major matters. China International Trade Center believes that "this is a market behavior." Chen Haoyang, chairman of Litan Investment, analyzed that China International Trade is likely to temporarily join forces and hype.
performance did not exceed expectations
No major matters were disclosed. Suspected hot money short-term selling leeks
At 10:45 on May 25, China International Trade hit the limit during the session, at 22.92 yuan/share, and then closed at 23.4 yuan/share on the same day, a drop of 8.13%. The transaction volume was 519 million yuan on the same day, with a turnover rate of 2.11%.
Figure 1 China World Trade Center K line chart changes
Image source: Tonghuashun
It is worth mentioning that the day before, China World Trade Center just refreshed its historical highest stock price. On May 24, China World Trade Center closed at 25.47 yuan per share, corresponding to market value of 25.655 billion yuan.
China Guomao 's stock price has been rising all the way since the end of April 2021. Before that, from the beginning of 2021 to April 28, the stock price remained at around 12 yuan/share to 13 yuan/share. Since April 29, the share price of China International Trade has been rising sharply, from the opening price of 12.3 yuan/share on April 29 to 25.47 yuan/share on May 24, with the stock price rising as high as 106.57%.
In less than a month, the stock price doubled. What helped boost the stock price of China International Trade soar?
April 24, a reporter from Red Weekly called as an investor to the Investment Relations Department of China International Trade as an investor. Relevant staff said, "We have disclosed several abnormal fluctuations in the stock price of the company. We believe that this is a market behavior. From the company's level, everything is normal in business management and there are no special matters."
Figure 2 On May 13, China International Trade released a stock trading risk warning announcement screenshot
Many investors speculated that the rise in the stock price may be because China International Trade has obtained a duty-free license. In response, China International Trade certificate agent said: "(the two) have nothing to do with them. We have repeatedly explained to investors through multiple channels such as Shanghai Stock Exchange e Interactive. This is not a problem."
In 2020, China International Trade 's performance was severely impacted by the epidemic, and both revenue and net profit declined, achieving operating income of 3.1 billion yuan, a year-on-year decrease of 12.2%; and achieving net profit attributable to shareholders of 825 million yuan, a year-on-year decrease of 15.12%. Due to the effective control of the domestic epidemic, in the first quarter of 2021, China International Trade achieved operating income of 839 million yuan, a year-on-year increase of 14.96%; net profit attributable to shareholders was 238 million yuan, a year-on-year increase of 16.53%.
Chairman of Litan Investment Chen Haoyang analyzed to the reporter of "Red Weekly" that in the first quarter of 2021, the performance of China International Trade only returned to the level in 2019, and did not exceed expectations. There are no major issues disclosed in China International Trade recently, and there are no clues to the rise in stock price.
Chen Haoyang speculated that China International Trade is likely to be temporary hyped, and this situation is inevitable. Currently (May 24) China International Trade 's PB and PE are at the highest level, and the subsequent stock price is likely to fall because it does not have particularly long-term factors to support his short-term changes.
Nearly half of the revenue comes from office buildings
The vacancy rate increases, which may weaken long-term profitability
China Guomao operation and management includes Guomao office buildings, Guomao Mall , Guomao Hotel, New Guomao Hotel, Guomao Apartment and other high-end properties. The main building complex is located in the core area of Beijing CBD, with a building area of nearly 900,000 square meters.
and office buildings are the "main force" of the performance source of China International Trade .In 2020, the office building business of China Guomao achieved operating income of 1.507 billion yuan, accounting for nearly half of the total revenue.
However, the future prospects of this core business seem to be unclear. Chen Haoyang told the Red Weekly reporter that in the long run, the demand for new office buildings is basically similar to economic growth. However, in the past two years, the supply of Grade A office buildings in Beijing, Shanghai, Guangzhou and Shenzhen has been increasing, and the growth rate has exceeded the growth rate of GDP. If the supply is oversupply, the vacancy rate will naturally increase accordingly.
According to data provided by Colli International , the vacancy rate of office buildings in Beijing in 2020 was as high as 19.4%, setting a new high in the past decade. It said, "Based on the performance of net absorption in the fourth quarter, overall market demand is rebounding strongly and basically returning to the pre-epidemic level. We expect this demand level to continue in 2021, but due to the pressure of high supply in the overall market, the market vacancy rate will continue to rise. If demand release is less than expected, the market vacancy rate may further exceed 25%. "Although the vacancy rate of Beijing Grade A office buildings under the property under China International Trade is lower than the average, the vacancy rate in 2020 also reached 15.8%.
Not only is the vacancy rate of office buildings rising, but the rent of office buildings is also falling. JLL released a report showing that as of the end of 2020, rents for grade A office buildings in Beijing fell for the eighth consecutive quarter, down 2.6% month-on-month and 7.9% year-on-year.
The above industry characteristics are also reflected in the China International Trade financial report. The financial report pointed out that the average occupancy rate of China Guomao office buildings in 2020 decreased compared with the previous year. Among them, the average occupancy rates of Phase I, Phase II, Phase III A and Serviced Office Buildings decreased by 3%, 2.1%, 7.3% and 0.2%, respectively, while the average occupancy rates of Phase III B rose slightly by 1.4%.
In terms of rent, as of the end of 2020, the average rent of the third phase A, which accounts for 40% of the total rentable area of the office building in China Guomao , dropped from 714 yuan/square meter/month in 2019 to 702 yuan/square meter/month in 2020. In 2020, the rental income of International Trade Center office buildings was 1.467 billion yuan, a "shrinkage" of 62 million yuan from 1.529 billion yuan in 2019.
By 2021, the domestic epidemic was effectively controlled, but the rental income of China Guomao office buildings did not improve significantly. In the first quarter of 2021, the rental income of office buildings in the Guomao Center was 366 million yuan, a "shrinkage" of 10 million yuan from 376 million yuan in 2019.
Chen Haoyang said that overall, the office market is getting worse. Although China International Trade is located in the core area of CBD, the geographical advantage can only make it less affected. In the long run, the competitiveness and profitability of China International Trade are weakening.
(The article mentions stocks for example analysis only, and does not make trading suggestions.)
