The market's highly anticipated first-ever city bypass expressway REITs—Huaxia Nanjing Transportation Expressway REIT (fund code: 508069)—has announced its issuance results.
The announcement shows that the public and offline investors' subscription application confirmation ratios for the Huaxia Nanjing Transportation Expressway REIT are 19.163% and 12.848%, respectively. The total amount raised from this issuance is 6.8572 billion yuan (before proportional allocation), making it a hot product in the public REITs issuance market.
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Investors' enthusiastic subscription
Total amount exceeds 6.8 billion yuan
The public offering of the Huaxia Nanjing Transportation Expressway REIT received enthusiastic subscriptions from investors, with the public offering part ending early and initiating proportional allocation. The number of valid subscribed fund shares by public investors is 197.25 million, which is 5.22 times the initial public offering fund share quantity (37.8 million shares). The actual confirmation ratio of the public investors' valid subscription applications is 19.163%. Calculated based on the offering price (5.452 yuan per share), the fund-raising scale before proportional allocation for the public offering part is approximately 1.0754 billion yuan.
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As early as the offline inquiry and pricing stage, the Huaxia Nanjing Transportation Expressway REIT attracted attention from funds. The total proposed subscription quantity for offline inquiry was 8.05 times the initial offline offering quantity, and the offline investors included a gathering of securities firms, insurance companies, trusts, and private equity, indicating the recognition of the fund's investment value by professional institutional investors. According to the announcement, the number of valid subscribed fund shares for the offline offering is 686.5 million, and the confirmation ratio for the offline investors' valid subscription applications is 12.848%. Calculated based on the fund offering price, the fund-raising scale before proportional allocation for the offline offering is approximately 3.7428 billion yuan.
In addition, the initial strategic allocation fund share quantity is 374 million, with a subscription scale of 2.039 billion yuan.
In summary, the total fund-raising scale before proportional allocation for the Huaxia Nanjing Transportation Expressway REIT in this issuance is 6.8572 billion yuan (including strategic allocation, offline offering, and public offering), which is 2.515 times its intended fund-raising scale (2.726 billion yuan).Investment Value is Anticipated
Professional Operation and Management Empowerment
The enthusiastic pursuit of funds for the Huaxia Nanjing Transportation Expressway REIT cannot be separated from investors' deep recognition of its investment value. As a highway REIT jointly launched by Nanjing Highway Group, Huaxia Fund, and CITIC Securities, the underlying asset of the fund's first issuance is the Southeast Section of Nanjing Bypass Expressway under Nanjing Highway Group, located in Jiangning District and Yuhuatai District of Nanjing City, adjacent to Nanjing Lukou International Airport, with a mainline length of 41.215 kilometers.
Expressways, compared to non-bypass highways, bear more functional positioning, have more diverse driving factors for traffic volume growth, and have greater potential for toll revenue growth. The project has been in operation for 14 years with a good historical performance. According to the fund's issuance announcement, the forecasted distribution rates for Huaxia Nanjing Transportation Expressway REIT for the years 2024 and 2025 are approximately 9.3% (annualized) and 10.92%, respectively.
The original equity holder and the operation management coordinating institution, Nanjing Highway Group, is a core and key subsidiary of Nanjing Transportation Group, and is the main investor and operator of infrastructure such as expressways and related industries within the Nanjing metropolitan area. CITIC Securities, the fund plan manager, and Huaxia Fund, the fund manager, both have rich experience in managing public highway REITs investment, which will provide professional empowerment for the stable operation of the fund in the future.
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Riding the Wave of Regular REITs Issuance
Creating a Financial Innovation Model for Expressways
As an important financial innovation in the national expressway industry, Huaxia Nanjing Transportation Expressway REIT was born. Its successful fundraising provides a new financing model for more urban expressway projects and also offers a chance for a wide range of investors to participate in national infrastructure construction and share the dividends of industry development.The Huaxia Nanjing Transportation Highway REIT is a microcosm of the normalized issuance in the public REITs market. With the successful conclusion of the fundraising for the Huaxia Nanjing Transportation Highway REIT, the public REITs market will welcome another member.
As of October 15th, there have been 47 public REITs products established in the entire market, with 31 on the Shanghai Stock Exchange. The Huaxia Nanjing Transportation Highway REIT is also the 9th highway REIT on the Shanghai Stock Exchange. Including this product, the total scale of highway REITs on the Shanghai Stock Exchange exceeds 45.9 billion yuan, and the sector's demonstration effect and scale effect continue to be evident.