October 5，While Chinese people are still enjoying the wonderful National Day holiday，Jinmao Hotel (06139,HK) officially delisted from the Hong Kong Stock Exchange through privatization，The total number of days on the market is only 2287 days。

This short journey to the market，For Jin Mao Hotel, it is like people who climb up the Jin Mao Tower Cloud Walk project to enjoy the scenery，Always curious and want to climb higher，When I step on the glass walkway, I want to go back。

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March 31, 2014，Violent storm and hail hit Hong Kong。It is the choice of most people to not go out in such weather，But on this day, Jin Mao Hotel submitted its listing application to the Hong Kong Stock Exchange in the form of a business trust。

Because after this day，The Hong Kong Stock Exchange will implement new regulations，All prospectuses submitted by companies planning to be listed only allow the issue price to be left blank，The rest of the content needs to be filled in completely，And it must be consistent with the final draft。Such a strict new rule，Let companies planning to go public be more cautious，No one wants to be the first to eat crabs。The same is true for Jinmao Hotel, which uses "Beyond" as the internal code name for this listing plan。

Removal time is tight，Another reason why Jin Mao Hotel was split and listed was to increase the valuation of the hotel and residential sectors。2013 data display，Francshing Properties (a platform company in the real estate and hotel sectors of Sinochem Group Co., Ltd.，The predecessor of China Jinmao) market value is at a discount of more than 60% to its net assets，Hotel asset discount exceeds 70%。

After split，Not only can it expand the company’s capital operation capabilities，It can also increase the platform valuation。Franching Real Estate stated at the press conference held in June 2014，Spinning off the hotel “has two strategic implications”，On the one hand, it serves as a professional management platform，Jinmao Investment (the full name of Jinmao Hotel’s listing is “Jinmao Hotel and Jinmao (China) Hotel Investment Management Co., Ltd.”) will develop better；On the other hand，Fangxing can integrate the other two major business segments，That is, the full release and realization of value in all aspects of property leasing, operation, development and sales business。

After submitting the prospectus at the card line，Jin Mao Hotel’s performance in the stock market is like the weather that day，Unsatisfactory，Failed to realize the company’s vision of splitting up that year。This has also become one of the reasons for the privatization of Jinmao Hotel。

Jin Mao Hotel stated: The liquidity of Jin Mao Hotel share syndicated units is low，This situation has lasted for a long time。

K-line chart display，Jinmao Hotel in 2014 with 5.Issuance price of HK$35/share after 188bet app download listing，First go out of an upward trend to 6.After the peak of 36 Hong Kong dollars/share, it has dropped all the way，Until the end of 2017, it rose back to 5.HKD 35/share，But the stock price fell again since then，The stock price once hovered around HK$2 this year，The lowest stock price was only 2.HK$11/share，Falled below the issue price by more than 60%。The latest stock price rise，Still before issuing the suspension announcement。After three consecutive rises，The stock price reaches 3.HKD 68/share。

It’s worth noting，During the period when Jin Mao Hotel’s stock price remained at a high level from July 2017 to the first quarter of 2018，It is the time when the company ends its early dividend distribution and is insufficient，Major shareholder participation in subsidy segment，And the stage of transformation of Lijiang Jinmao Hotel’s business model。As the effects of these two measures gradually fade away，The share price of Jinmao Hotel has never returned to 5.High of HK$35/share。

Bo Wenxi, Vice Chairman of China Enterprise Capital Alliance, told New Real Estate Finance，Jinmao Hotel is listed as a business trust，The share price of a business trust depends on its cash flow available for distribution，High-end hotels have higher fixed costs，Depreciation, amortization and management costs consume a lot of operating cash flow，Resulting in relatively limited cash flow for distribution，And poor growth potential，Therefore, the share price performance of Jinmao Hotel is sluggish。In addition，He added: “Business trust is suitable for commercial properties with stable rental income。”Some of Jinmao Hotel’s projects are located in tourist cities，Income is bound to be affected by the low and peak tourism seasons。

The stock price reflects the company’s operating performance and the market’s expectations for the company to a certain extent。Jin Mao Hotel’s performance and stock price trend have not gone out of the upward trend。Except for the first year of listing，Its operating income has been between 2.5 billion yuan and 2.6 billion yuan，Gross profit is between 1.4 billion yuan and 1.5 billion yuan in the long term。But the net profit performance is really unsatisfactory，From 7 in the first year of listing.1.6 billion yuan keeps falling，Reduced to -1 by the first half of this year.5.7 billion yuan，YoY loss of about 3.200 million yuan，Net profit fell as much as 195% year-on-year。

This performance is consistent with Jinmao’s hotel business development that year。Before split，The hotel business is not very eye-catching，Francshing Properties 2013 financial report display，Income from hotel operation business in 2012 20.HKD 6.1 billion，Accounting for about 10% of the group’s total annual revenue。

The failure of Lijiang narrows the development space of high-end hotels?

The second reason for the privatization of Jin Mao Hotel is that it is affected by the current COVID-19 epidemic and tourism restrictions in various countries around the world，Privatization is in line with long-term development。

According to the "2020 China Domestic Tourism Market Sentiment Report" released by Horwath Management，Affected by the epidemic，The prosperity 188bet app index of China’s domestic tourism market fell to -121 in the first half of 2020，Down 146 index points compared with the same period last year，Reached historical low。

Jinmao Hotel’s annual report for the first half of 2020 shows，The company’s operating income is 6.1.1 billion yuan，Down 50% year-on-year；Net profit loss 1.5.7 billion yuan，195% decrease year-on-year；Gross profit is 3.1.4 billion yuan，Down 56% year-on-year。

Viewed by business，The operating income of the hotel segment in the first half of the year was 3.3.6 billion yuan，Decreased 62% compared with the same period last year；The rental income is 1.9.2 billion yuan，17% decrease compared with the same period last year；Other income mainly includes income from the 88th floor observation hall of Jin Mao Tower and property management income，Decreased 22% compared with the same period last year。Affected by the epidemic，All sightseeing projects in Jin Mao Tower will not be fully open until May this year。

From the occupancy rate，According to incomplete statistics from New Real Estate Finance，The average occupancy rate of Jinmao Hotel’s 3,432 rooms in the first half of the year was 31.79%，Down 56 year-on-year.83%；The cumulative average house price is 1025 yuan，Decreased by 9 year-on-year.77%；The cumulative average revenue per room is 326 yuan，Decreased by 62% year-on-year.18%。

Once a company’s style is formed, it is as stable as genes，Can make precise copies of itself even as cells divide。Focusing on high-end routes has always been Jinmao’s style，This style has continued from the Jin Mao Tower mentioned at the beginning to its residences，Hotel、Commercial real estate project in progress。

On the hotel business side，Jinmao Hotels uses "All properties are located in prime and high-quality locations in China's first-tier cities and tourist hotspots。"Introduce your own products with text like this，Invisibly highlighting the high-end tonality of its products。In addition to the excellent geographical location，The room rate often exceeds a thousand yuan per night, which also highlights its high-end style。

In addition，Cooperating with internationally renowned hotel groups once again shows its high-end tone。7 of the 8 hotels under the Jinmao Hotels listing platform are with Hilton、Operated in cooperation with well-known hotel groups such as Marriott。

This kind of operation，In the early market environment, it was a win-win situation for both parties，On the one hand, domestic hotel developers use the comprehensive internal operations of international hotel groups to develop markets；On the other hand，All well-known hotel groups rely on developers to select sites，Advantages in architectural design and other aspects can also build domestic reputation。

But with the deepening of China’s market opening，International hotel brands are sinking into China，For example, Hampton by Hilton, which is positioned in the mid-range market，In the past 6 years since entering China, the total number of project signings has exceeded 460。In addition, the performance of domestic budget hotels in the sinking market is not to be outdone，Huazhu Chairman Ji Qi once publicly stated: "We want to open to third- and fourth-tier cities，Drive to the town。”

Meanwhile，Some of Jinmao Hotels’ projects in tourist hotspot cities have shown signs of weakness。

Lijiang Jinmao Hotel is the only local luxury hotel built in the Jade Dragon Snow Mountain Scenic Area，Although you can experience the snow mountain scenery up close，But the performance is not ideal。Zhang Runhong revealed at the 2018 interim results meeting，Lijiang Jinmao since its opening in 2014，Cash flow has been in loss for three consecutive years。From the financial data，Low occupancy rate is one of the reasons for its tight cash flow。The average occupancy rate of Lijiang Jinmao Hotel from 2014 to 2016 was 15.8%、37.9%、41.5%，has always been at the bottom of the 8 hotels in the asset package。

Early 2018，Lijiang Jinmao Hotel changed its original entrusted management model to a franchise model，And operate its urban part and the snow mountain part separately，Lijiang Jinmao Hotel·Hyatt Collection and Lijiang Jinmao Puxu Snow Mountain。CFO Zhang Runhong said at the 2018 interim results meeting that “this is a last resort”。After this operation，The hotel’s average occupancy rate finally exceeded 50%，But there is still a gap between it and the other 7 Jinmao hotels。

Except Lijiang project，The projects with high occupancy rates in Jinmao Hotel’s asset package are all hotels located in the core areas of first-tier cities，These hotels can satisfy guests’ travel needs，Double business needs。Looking back，Hotels in tourist cities，Except Jinmao Sanya Hilton Hotel，The occupancy rates of the other three hotels are quite different from those of hotels in core areas of first-tier cities。2019 annual report data display，The occupancy rate of hotels located in the core areas of first-tier cities is above 85%，Hotels located in tourist cities，The highest occupancy rate comes from the Ritz-Carlton Sanya Yalong Bay，is 68.4%。

Zhang Runhong said at the 2018 interim results meeting: International hotel brands can exert a great brand premium in big cities，But for second-tier cities or even third-tier cities like Lijiang，This effect and the increase in customers it can bring are very limited。

On the one hand, hotel occupancy rates in second- and third-tier cities represented by the Lijiang project are poor，On the other hand, some international hotel groups are making efforts to sink the market in China，So has the domestic high-end hotel market become saturated?？

To this，Yu Zhanfu, global partner of Roland Berger’s transportation and tourism industry, thinks，During the epidemic，International hotel groups have not significantly slowed down their plans to open stores in China，This is their optimism about the new opportunities in China’s hotel industry，Even if it sinks，Markets entered by various hotel groups，Still the highest-end line positioned locally，From this perspective，High-end hotels still face growth opportunities in China。

But，Yu Zhanfu also pointed out，High-end hotels have been more severely impacted by the epidemic than the entire industry。He explained，The customers of high-end hotels are mainly high-end business people，Mainly high-end personal travel。During the epidemic，Out of comprehensive considerations of epidemic prevention 188bet online sports betting safety and the company’s overall operating costs，The occupancy rate of this group of people has dropped sharply，Resulting in a significant decline in the occupancy rate of high-end hotels。In this case，If the hotel has relatively few other hedging options to deal with the impact，The business challenges faced will be even greater。

"Single product，Low risk resistance” often appears in the China Securities Regulatory Commission’s review opinions on the prospectuses of listed companies。Today，Jinmao Hotel, which relies on high-end business to resist risks, also showed a single product amid the epidemic，The problem of low risk resistance。Of course，This is a common problem faced by many domestic and foreign high-end hotels in the first half of this year。Marriott Hotel, the world's number one hotel group，Revenue in the first quarter of this year 46.USD 8.1 billion，Decreased by 7% year-on-year；Second quarter revenue is 18.USD 600 million，65 year-on-year decrease.0%。The sharp decline in performance also occurred at Hilton，On Hyatt and other well-known hotel groups。

Is there any opportunity for Jinmao Hotel to be listed in the future?

As Jin Mao Hotel said in the announcement，The combined factors of poor stock liquidity and the epidemic，Intensifies the company’s thirst for funds。Data display，Jinmao Hotel’s debt ratio reached 73 in the first half of this year.08%，The highest since listing，And the current ratio is only 0.16%，Weak short-term solvency。

Delisting despite high debt，Although the road to listing and financing is blocked，However, Jinmao Hotel still has many financing channels。Bai Wenxi said: "After delisting，Jinmao can borrow money through mortgage，Operating property loans and other forms to solve capital chain problems。”

In addition，China Jinmao disclosed in the announcement，If it can be implemented，Although it may have a negative impact on the group’s short- and medium-term financial performance，But China Jinmao can make necessary asset portfolio adjustments more flexibly，And make strategic decisions that are consistent with the group’s long-term goals。

To this，There are always voices from the outside world that think，In the future, the hotel business and commercial business will be merged and listed twice。China Jinmao insiders responded to New Real Estate Finance on this point of view: "This speculation is a bit far away from (the company's plan) for the time being，Cannot answer yet。”

We might as well briefly review the development history of Jinmao’s commercial business。

2005，Jinmao begins to get involved in business，The first project is Jinmao Tower J•LIFE in Shanghai。2013，China Jinmao establishes commercial division，And put forward the goal of meeting listing conditions in five years。

In 2016, Jinmao launched the city-level/regional-level commercial project "Lanxiu City"。As the leader of the project, Ning Gaoning not only showed in the name of the project that he wanted to surpass the Vientiane City he built、Two commercial real estate projects in Joy City，Also said at the 2016 China Jinmao Business Strategy Upgrade Conference，Jin Mao moves forward，Innovation 188bet online sports betting is necessary，And it’s groundbreaking，It’s not just a matter of modifying the facade of the building，Just add some activities in the building。

However，Judging from the development of Jinmao Business in recent years，Business growth is not fast。2019，China Jinmao business leasing and retail business operating income is 14.4.7 billion yuan，3% of the company’s total revenue，Down 1% compared to last year。The total construction area is about 790,000 square meters，10,000 square meters more than last year。

The growth rate of Lanxiu City, which has attracted much attention, is also slow。2019 Annual Report Disclosure，Only Changsha Lanxiu City is open，Nanjing Jinmaohui is in the state of upgrading to View City，Qingdao、The Zhangjiagang and Xiucheng projects are under preparation。October 2019，The “2212” strategy released by China Jinmao，Plans to complete the layout of 20 Lanxiu cities within 5 years。In addition to the developments of the four Lanxiu cities disclosed last year，Wuhan is shown in the 2020 interim results announcement、Tianjin and Tianjin will plan the Xiuchi City project。

In addition，Commercial real estate development cycle is long，The large demand for funds also worries many operators。REITs are considered to be one of the listing methods that can balance risks and returns，Commercial real estate company Singapore CapitaLand has proved this with practice，But REITs products have not been launched in China。

End of April this year，Publicly offered infrastructure REITs opinion draft released，Although it does not involve the commercial real estate field，But people engaged in commercial real estate and other related projects in China seem to feel that they are one step closer to the launch of REITs products in their own fields。

Commercial real estate listing vision、Establishment of light asset operation platform、The launch of infrastructure public offering REITs has increased the imagination of Jinmao to merge and list the commercial and hotel sectors in the future。Domestic public REITs cannot be launched even in a short period of time，Bai Wenxi pointed out，Jinmao Hotel can still choose to list again in the future in a more beneficial form such as REITs or companies。

Although it is still unknown whether Jin Mao Hotel will be listed again，But rationally plan the development direction of each hotel，Strive to narrow the performance gap between its hotels，Improve the operational capabilities of the enterprise，Maintaining a more stable occupancy rate is an issue that Jin Mao Hotel needs to think about and solve after delisting。So，If Jin Mao Hotel can be listed again，I won’t make the same mistakes again，It is also possible to truly regain the confidence of the capital market。

*Source of this article: New Real Estate, Author: Liu Yao,OriginalTitle:《Two selective “mistakes” behind Jin Mao Hotel’s delisting》.