A Case Study On REITs Of Suning

Fund is the necessity of production and operation.Financing decision is related to the source of funds,which constitutes an important part of financial management activities.As the opening of capital market and the complement of financial system,the financing channel becomes variety.Besides bank loan which is the normal way,short term investment certificate,corporate bond,convertible bond,equity financing and warrant are also tools of financing.In the early 1960 s,REITs founded by parliament was born in America.The philosophy of design is involving medium and small investors in real estate market to gain assets accretion and rent.Since 2000,REITs which used in Japan has introduced in Asia.At the same time,scholars in our country began to research the model.Most of them concentrated on the introduction of concept,model and system.Also,they gave some solutions to copy with dilemmas of laws and tax and conceive the model of REITs in China.As for the research method,they usually use normative analysis rather than empirical or case analysis.Because of lack of cases and datum,the depth of abroad research is deeper than ours.The contents of research included REITs' risk,the relation of REITs to inflation,REITs to equity market,and REITs to real estate market.They found out that REITs can copy with inflation,REITs and capital market have a positive relationships and the model of REITs' risk.Recently,some large enterprises including Rainbow,Wanda,Vanke and so on,began to use REITs to financing.As the encouragement of policy,more and more enterprises may consider to use the tool,which will enrich the content of research.The article chooses the case of Suning REITs to analyze,which is the first non-real estate and non-finance enterprise uses REITs to financing,and mainly study motivation,effect and pattern design in order to give some advices for enterprises which consider to use the tool.February 7th,2018,the company changed the name of security.However,the case was implemented in 2014 when it uses the past name,so the article use its past name.This article mainly uses documentary research method and case study method.Firstly,summarize the achievements and shortcomings of research and three research areas of REITs including the model,risk,legal and tax system by collecting domestic and foreign literature about it.Secondly,conclude the concept,component,operating process and theoretical basis about REITs,which provides theoretical base for the case study.Thirdly,introduce three parts of presentation of Suning REITs,including the introduction,the decision process and the implementation of Suning REITs.The introduction of Suning involves in three parts including the development history,the rudiment of O2 O and the main ways of financing in Suning.The decision process involves in three parts,appraise assets,independent director declare opinion and board of directors and stockholders' meeting declare opinion.The implementation involves in three parts including stores are set up as companies,set up a private equity fund and set up fund shares and Priority bond as special asset plan.Meanwhile analyze the case from motivation,effect and pattern design.Suning considered four factors to choose REITs,which is national policy,enterprise strategy,financial position and financing mode.After analyzing the effect of REITs from financial indicators,financing channels,and strategy of asset-light,it is reasonable for Suning to choose the financing tool.The pattern design of REITs involves in three parts,trade structure,securities and distribution,credit rating systems.Finally,draw four conclusions and three enlightenments as follows.REITs can be a new financing channel.It is necessity for companies to focus on the plans for investment which will influence cash flow.And companies need to measure cash flow according to financing plan.It is reasonable for companies to choose excellent fund administrator and real estate to benefit subscription.And because the REITs structure is affected by advanced policy companies should measure cost of financing to decide plan rather than copy other cases.