[ET Net News Agency, 11 May 2018] Morgan Stanley said the joint venture between Anbang
Insurance and Sino-Ocean Group (03377) is yet to involve asset transactions, but that is a
probable scenario. It estimated if all of Anbang's real estate assets were sold to the new
joint venture, Sino Ocean's NAV could rise 22%.
In February, the Central government toke over Anbang for one year, saying it would
consider all or partial sales of Anbang's assets to help its financials.
Morgan believes Anbang choose Sino-Ocean for the JV because of their long-term
cooperating relationship (Anbang is one of its major shareholder), Sino Ocean's strong
shareholder profile (China Life owns 29.8% of Sino Ocean) and its expertise in commercial
property management (majority of Anbang's real estate assets are commercial assets).
It believes that Sino-Ocean will have access to Anbang's valuable landbank while Anbang
could rely on Sino Ocean to improve these assets' asset turn and streamline their
operation.
Meanwhile, Anbang could avoid the loss in any fire sale. By holding the 29.8% stake in
Sino-Ocean, Anbang, even if all the real estate assets are sold to the JV, would still
effectively own 65% of the assets.
Morgan Stanley maintained its "overweight" call on Sino-Ocean, with a target price of
HK$6.6. (KL)