CITIC Securities: The operating resilience of outlet industry is highlighted, optimistic about leading operators and their REITs.

Citic Securities pointed out that the official launch of commercial real estate investment trusts (REITs) has opened up financing channels for quality retail assets such as outlets, with two outlet commercial real estate projects already accepted. As a representative retail format of "luxury replacement" and "high cost-effectiveness", outlets have shown significant operational resilience in economic fluctuations. The industry has formed a competitive pattern of concentrated leaders and regional differentiation, with strong marketing capabilities and product control building the company's core moat. In terms of operating model, the joint venture model achieves benefit sharing and risk sharing, combined with low property costs and property tax advantages, making it a high-quality underlying asset with strong operational resilience in the expansion background of commercial real estate REITs. In terms of valuation, the initial outlets projects have reasonable discount rates, with a forecast distribution rate of 4.6%-5.5% by 2026. With mature operations and high-quality assets, they have high investment value.