Group 1 - The core investment strategy of the report focuses on the potential of the CICC Vipshop Outlet REIT, which is based on the Ningbo Shanjing Outlet project, with an expected fundraising of 2.321 to 3.481 yuan per share and a total of 2.901 billion yuan [2][6] - The project has shown strong operational performance with a visitor count of 13.1 million and an annual revenue nearing 2 billion yuan in 2024, indicating a robust growth trajectory [2][14] - The project is expected to benefit from the completion of the Ningbo West Air-Rail Hub, which will enhance its development potential and customer reach [2][21] Group 2 - The brand matrix of the project is diverse and appealing, featuring a mix of international brands that attract significant consumer traffic, with a compound annual growth rate (CAGR) of 16.63% in visitor numbers from 2022 to 2024 [2][15] - The revenue structure is stable, with joint venture income accounting for approximately 75% of total revenue, supported by guaranteed minimum sales clauses that ensure income stability [2][39] - The project maintains a high occupancy rate of around 98% and a reasonable tenant concentration, with the top ten tenants contributing less than 30% of total income, indicating a well-diversified revenue base [2][50] Group 3 - The estimated fair value of the project assets is projected to be between 2.491 billion and 3.050 billion yuan, with an internal rate of return (IRR) ranging from 6.46% to 7.49%, significantly higher than the average for listed consumption REITs [2][5.1] - The forecasted capitalization rate for 2025 is expected to be between 6.22% and 7.54%, which is competitive compared to other commercial REITs [2][5.2] - The anticipated distribution rates for 2025 and 2026 are projected at 5.21% and 5.65% respectively, which are notably higher than those of other consumption REITs [2][5.3]

Core Viewpoint - The introduction of Ningbo Shanjing Outlet as a new member of the outlet consumption REITs market in China highlights the growing interest and potential in this sector, following the successful launch of the first outlet REIT by Huaxia in 2022 [1][2]. Group 1: Company Overview - Ningbo Shanjing Outlet, operated for over 13 years, is the first outlet project developed by Shanshan Commercial, in collaboration with Japanese firms Itochu and Mitsui [2]. - The project has a total building area of 104,300 square meters and a commercial area of 83,300 square meters, with a total valuation of 2.972 billion yuan, representing a 547% increase from its original value [3][4]. Group 2: Financial Performance - The annual operating income of Ningbo Shanjing Outlet has shown a compound annual growth rate (CAGR) of 8.70% from 2022 to 2024, with projected revenues of 2.32 billion yuan, 2.64 billion yuan, and 2.74 billion yuan respectively [5][6]. - The outlet's average occupancy rate has remained above 97% over the past three years, with a peak occupancy rate of 99.71% at the end of 2024 [8][10]. Group 3: Revenue Composition - The revenue structure is primarily based on joint venture income and commission income, with joint venture income accounting for 74.33% of total revenue in 2024 [5][6]. - The commission rate for joint venture income has consistently exceeded 13% over the past three years, reaching 13.29% in 2024 [6][7]. Group 4: Market Position and Competition - Ningbo Shanjing Outlet is strategically located in a strong consumer market with no direct competitors in the vicinity, benefiting from local consumer support [16][17]. - The outlet has established a diverse tenant mix, with significant contributions from sports and outdoor brands, which have seen an increase in both area and revenue share [10][12]. Group 5: Future Prospects - The growing trend of introducing well-known domestic and international brands is expected to enhance the outlet's attractiveness and customer draw [10][15]. - The increasing number of outlet REITs in the market indicates a rising interest in this asset class, with more original rights holders looking to include profitable projects in REITs [22].