NEW YORK, NY / ACCESSWIRE / June 9, 2016 / SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has initiated coverage of Yangtze River Development Ltd. (OTC: YERR) with a price target of $8.00.
The report is available here: YERR Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack's. The report will be available on these platforms. The firm also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
Spanning 474 acres, the Wuhan Yangtze River Newport Logistics Center project is massive in scale and will encompass a logistics center, port operations, warehouses and distribution, as well as commercial and residential real estate construction. YERR has invested approximately $400mn thus far in the development of this project, and has estimated the remaining cost to complete construction of the project at $800mn. Management has stated that it believes it could fund this investment by monetizing 50% of its real estate holdings over the next four years. In our opinion, we believe the company will raise funds through a combination of real estate monetization and outside capital, which would potentially enable it to accelerate its development timeline and reduce risk. The company is targeting 2020E / 2021E for completion and the initiation of its logistics business, though management does expect to generate revenues between 2016E and 2020E from the sale of real estate assets, which could be used to fund development. Given the scope of the project, we expect that management quality will play a significant role in the company's ability to execute. Importantly, YERR is led by CEO Mr. Xiangyao Liu, an experienced executive with a history of success in the Chinese steel trading and logistics industries. Mr. Xiangyao Liu has funded a considerable portion of YERR's development and holds a controlling equity stake in the company.
"We initiate coverage on Yangtze River Development Ltd. (OTC: YERR) with a price target of $8.00. Through its subsidiary companies, Yangtze River Development Ltd. appears to be a unique infrastructure play with intriguing logistics and commercial / industrial real estate components. We believe it is one of few – if any – remaining publicly traded pure play companies focused on infrastructure development in China available to US investors. Despite recent concerns over the rate of growth of the Chinese market, the fact remains that it is one of the largest and fastest growing economies in the world, with a GDP growing at an annualized rate of 6.7% in 1Q16. YERR has embarked upon a significant new development project, the Wuhan Yangtze River Newport Logistics Center, in a strategically important area of China which YERR expects to be closely linked to China's "One Belt, One Road" long term economic plan. In addition, management believes Wuhan has may become the first inland city to achieve Pilot Free Trade Zone ("FTZ") status, as part of a government initiative to stimulate trade activities and increasing demand for logistics transportation domestically," stated Ajay Tandon, CEO of SeeThruEquity.
Highlights from the report are as follows:
Large infrastructure project in a strategic area
YERR has invested approximately $400mn thus far in the development of Wuhan Yangtze River Newport Logistics Center, and will require an additional $800mn to bring the project through to completion, likely through a combination of real estate asset monetization and capital raising. Considering its location in an economic development zone as well as an area which has applied to become a Free Trade Zone, the company stands to benefit from policy that is supportive of infrastructure development, such as the One Belt One Road infrastructure development plan. We see the company as offering a high risk, high potential reward avenue to invest in the development of logistics in China.
Experienced management highly invested in company
Given the scope of the project, we expect that management quality will play a significant role in the company's ability to execute. Importantly, YERR is led by CEO Mr. Xiangyao Liu, an experienced executive with a history of success in the Chinese steel trading and logistics industries. Mr. Xiangyao Liu has funded a considerable portion of YERR's development and holds a controlling equity stake in the company.
YERR seeking to uplist to national exchange
YERR has taken several strides on the corporate development front thus far in 2016. In March, the company publicly stated its intent to uplist shares to a national exchange. In the announcement, YERR highlighted recent actions including the expansion of its Board and the institution of several corporate governance policies. Clearly an uplisting to a national exchange would likely offer the opportunity for improved liquidity in YERR shares, and should expand the potential pool of investors, including some institutional investors which might be interested in considering a Chinese infrastructure play, but cannot invest in OTC securities.
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About Yangtze River Development Limited
Yangtze River Development Limited primarily engages in the business of real estate development with a port logistic project located in the middle reaches of the Yangtze River. Wuhan Newport is a large infrastructure development project implemented under China's latest "One Belt One Road" initiative and is believed to be strategically positioned in the anticipated "Free Trade Zone" of the Wuhan Port, a crucial trading window between China, the Middle East and Europe. To be fully developed upon completion of three phases, within the logistics center, there will be six operating zones, including port operation area, warehouse and distribution area, cold chain logistics area, rail cargo loading area, exhibition area and residential community. The logistics center is also expected to provide a number of shipping berths for cargo ships of various sizes. Wuhan Newport is expected to provide domestic and foreign businesses a direct access to the anticipated Free Trade Zone in Wuhan. The project will include commercial buildings, professional logistic supply chain centers, direct access to the Yangtze River, Wuhan-Xinjiang-Europe Railway and ground transportation, storage and processing centers, IT supporting services, among others.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. The company does not conduct any investment banking or commission based business. SeeThruEquity is approved to contribute its research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks, and distribute its research to its database of opt-in investors. The company also contributes its estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
info@seethruequity.com
SOURCE: SeeThruEquity
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