Company Profile

SHENZHEN WORLDUNION GROUP INCORPORATED, formerly Shenzhen Worldunion PropertiesConsultancy Incorporated, is a China-based company, principally engaged in the real estate consultingbusiness, property sales agent and brokerage business and property management business. TheCompany operates consulting business, including residential property consulting and strategicconsulting business; agent marketing business, including marketing planning and agent distribution;brokerage business, including agent leasing and agent trading of second hand housings; assetservices, including management of property for office buildings, apartments and commercial centers,and financial business, including consumer credit loans, investment management and other realestate services. Through its subsidiaries, the Company is also engaged in the small loan businesses.

The Company mainly operates its business in domestic markets. (Source: Reuters)Event

According to SHENZHEN WORLDUNION GROUP INCORPORATED (the company)’s announcement onJuly 20th 2020, Zhuhai Da Heng Qin Company Limited was transferred 122,265,400 shares, whichaccounted for 6% of the company’s total shares, at the price of CNY 3.1 per share. There is apossibility that it will continue to take more shares of the company.

Comments

Zhuhai Da Heng Qin Company Limited took a 6% stake in the company, bringing the total shareholdingsto 15.9% and there is a possibility that it will continue to take more shares in the upcoming 12 months.

According to the announcement on July 20th 2020, Zhuhai Da Heng Qin Company Limited wastransferred a 6% stake in the company at the price of CNY 3.1.

After the move, Zhuhai Da Heng Qin Company Limited will hold 324,077,841 shares of the company,accounting for 15.9% of the company’s total shares.

There is a possibility that it will continue to take more shares in the upcoming 12 months.

Zhuhai Da Heng Qin Company Limited is wholly-owned by State-owned Assets Supervision andAdministration Commission (SASAC) of Hengqin New District, Zhuhai, and the major driving force andpioneer for the development and construction of Hengqin New District.

Zhuhai Da Heng Qin Company Limited mainly undertakes the development of infrastructure, thepromotion of investment, property management, project management, consulting services, industrialdevelopment and venture investment in Hengqin New District, and is the investment managementinstitution of Hengqin New District.

The company undertakes a slew of key projects which are important on the provincial-, municipalanddistrict- level including the municipal infrastructure project of Hengqin New District, integrateddevelopment project, port and integrated transportation hub project, the headquarter project,Guangdong and Macau traditional Chinese medicine industrial parks, being the major driving forceand pioneer for the development and construction of Hengqin New District.

With abundant experience in asset operation management, the Shenzhen-based company boastsstronger management capabilities.

1) Property management services: the company focuses on the property management of officebuildings and targets industrial and commercial buildings and industrial parks. As of the publish offinancial report in 2019, the company had 98 projects in actual charge and 12 newly signed projects,with the actual charging areas reaching 4.86 million square meters.

2) Industrial and commercial asset operation business: as of end-2019, the actual operation area wasroughly 560,000 square meters. The company has obtained the entrust operation projects inGuangzhou and Shenzhen by taking the advantage of layout, laying a solid foundation for thefollowing asset-light brand export and the standardization of operation mode.

Earnings forecast and investment recommendationZhuhai Da Heng Qin Company Limited continues to take stakes in the company and has the possibilityof taking more stakes in the future.

The company also carried out businesses in asset operation and asset management.

We estimate the company’s EPS to be CNY 0.05/ CNY 0.07 for 2020/2021, implying a P/E ratio to be71.6X/ 51.1X, based on the closing price on July 20th 2020. We remain “Buy” rating for the company.

Potential risks

less-than-expected trading business; continuous losses in department management businessThis English translation of the original Chinese version issued by Industrial Securities on July 22, 2020 is for informationpurpose only. In case of a discrepancy, the Chinese original will prevail.