Under the adverse effects of the US interest rate hike in 2023 and the slow recovery of the domestic economy, the overall performance of China's public REITs market was poor, and it also put some pressure on the asset financing business under China's infrastructure asset management service provider Shoucheng Holdings (0697.HK). However, with the established leading position, the company faced the challenge in 2023, further opening up the entire infrastructure asset management industry chain by establishing “card position” superior resources for the company. It is easy to imagine that as the REITs market picks up momentum and operating pressure Capstone's revenue has steadily rebounded, Shoucheng Holdings' performance has bottomed out, and the future development momentum is strong.
With strong shareholder strength, mature industrial chain resource network and rich operating experience, Shoucheng Holdings received support from many shareholders with strong backgrounds during the period, and had an advantage in introducing sufficient development capital. In 2023, the company cooperated with the strategic shareholder Sunshine Insurance Group Co., Ltd. to establish the RMB10 billion Sunshine First Urban Development Fund with the goal of acquiring infrastructure assets with the potential to issue REITs. The company also co-sponsored the establishment of the Beijing Robotics Fund with strategic shareholder Beijing State-owned Capital Operation and Management Co., Ltd. and the Beijing Municipal Government Investment Promotion Fund, which focuses on the strategic layout of the country and Beijing's robotics industry, focusing on the strategic layout of the robot industry in the country and Beijing, focusing on fields such as robot bodies, industrial chain components, industrial chain innovation applications, etc., to promote the rapid development of Beijing's robotics industry, and actively participate in Beijing's promotion of an international science and technology innovation center and a benchmark city for the global digital economy.
Sunshine Insurance and Beijing State Management, the partners of the 10 billion fund are strategic shareholders of the company, showing that strategic shareholders are deeply empowered by Shicheng Holdings. At the same time, they are also strong support for the strategic shareholders' company's resource connection and business collaboration. They are also a high recognition by strategic shareholders of the company's ability to invest and exit in the field of asset operation and asset financing. At the same time, the two major shareholders have strong strength. In addition to financial support, it is expected to bring many resource synergy effects and industrial cooperation opportunities to the company, which is conducive to continuously locking in superior resources and achieving improved operating efficiency and collaborative development. According to public information, Sunshine Insurance Group is one of 10 listed companies out of 235 companies in the Chinese insurance industry, and has been ranked among the top 500 Chinese companies for many years. The Beijing State Administration, on the other hand, was funded and established by the Beijing Municipal Government to actively implement major investment projects in areas such as the collaborative development of Beijing-Tianjin-Hebei Province and the promotion of the construction of science and technology innovation centers by vigorously exploiting the strategic guiding role of state-owned capital.
The establishment of the two 10 billion funds provides sufficient source of fresh water for the company to continuously invest in high-quality projects, reserve potential assets for a long period of time, help improve asset quality and efficiency through years of rich operation and management, then withdraw funds from market-based exit or public REITs, and finally form reinvestment through REITs. The above is a four-step process for Shicheng Holdings to fully integrate infrastructure assets into ecosystem service. On the one hand, it will also fully reflect the company's accurate industrial investment ability and efficiency. Operational and management capabilities, and mature full exit capabilities.
As a financing tool, public REITs can be commonly understood as the listing of infrastructure assets. They allow large-scale infrastructure assets to obtain a liquidity premium and form a new investment and financing cycle. However, due to its long-term management of high-quality basic asset projects, Shoucheng Holdings is blessed with high-quality project resources, and can rely on public REITs issuance tools to revitalize its assets.
At the same time, the company's expertise in asset securitization consulting is also in a leading position in the industry. In 2023, the company helped clients successfully issue their first PV public REIT in China, helped customers enter the review stage of the China Securities Regulatory Commission, and continued to provide public REIT issuance consulting services to more than 30 customers. The estimated asset revitalization scale exceeds RMB 100 billion.
Although the overall public REITs in 2023 were affected by large fluctuations in the overall market environment, with relevant policy support, China's public REITs still have a broad development horizon, and the trillion dollar market can be expected. Benefiting from the successful establishment of the 10 billion dollar fund, and the recovery of the public REITs market, the company will also continue to comprehensively deepen its industry research capabilities, industrial investment capabilities, and accurate exit capabilities to achieve stable investment returns in the future, creating long-term returns for all shareholders, and the integrated value of asset operation and asset financing will be further unleashed.