Last year, Henan Housing Enterprise Jianye Group attracted attention on the major risk request for help and rescue incidents.
Affected by the news, on September 9, the stock prices of many listed companies under the group fell sharply. Among them, Jianye New Life closed down 4.2%, Jianye Real Estate fell 5.39%, and Zhongyuan Jianye fell by more than 10%.
At a time when confidence is as precious as gold, a "letter of help" is undoubtedly exposing the wound to the public.
After all, rich people only help rich people, and even if the "help letter" achieves results, it will lose a lot of trust in the capital market.
But in the difficult years of bad luck, some people can't manage so much anymore.
The front foot blows out the performance report
Send a "letter of help" on the back foot
On April 17, Guangzhou Real Estate Enterprise Times China Holdings Co., Ltd. issued a report on imploring support for the withdrawal of old renovation projects.
Times China noted in the report:
Due to the superposition of multi-faceted policies, the financing channels of real estate enterprises are limited, and the sales collection of projects has declined significantly, which has seriously affected the stability of our company's cash flow, while the old reform project has precipitated a large amount of funds in our company, and in order to smoothly overcome the current stage difficulties, we implore the municipal government to support enterprises to relieve difficulties.
Please support the details, including on the one hand, Times China implores the municipal government to support the coordination of the return of the old reform performance bonds for the three projects of Conghua and Zengcheng.
On the other hand, the municipal government is kindly requested to support and coordinate the five projects in Huangpu District to be undertaken by designated units or state-owned enterprises of the district government, and to return the funds invested in the early stage in accordance with relevant policies such as "10 Urban Renewal Articles", totaling 2.148 billion yuan.
To tell the truth, this wave of operations in Times China is really ignorant of many people, because this housing company has just issued a bright performance report.
Two weeks ago, Times China Holdings Limited held its 2021 annual results conference online.
According to the financial report data, in 2021, Times China recorded contracted sales of RMB95.59 billion, down 4.8% year-on-year; operating income reached RMB43.64 billion, an increase of 13.1% year-on-year; core net profit reached RMB4.80 billion, down 10.9% year-on-year.
In response to the question of debt that the outside world is most worried about, Niu Jimin, executive director of Times China, also couldn't help but say in a high profile at the performance meeting: "The debt repayment pressure in 2022 is relatively small, and there are perfect plans for the debts that will mature within the year." ”
Holding this plausible report card, Times China also boasted in a press release:
"In the marathon of the industry breakthrough in 2021, Times China used advanced deployment and rapid response to show the development resilience and winning way of powerful housing enterprises", "Times China Holdings is the epitome of real estate enterprises that smoothly survive cycle fluctuations"...
But why was it that two weeks ago, there was still a sea of yanheqing, and after two weeks, the financing channels were restricted, the project sales collection fell significantly, and the stability of cash flow was affected?
According to industry analysts, many housing enterprises now issue annual reports, or successful financing, these things that are not usually things are also used to spread wildly, mainly want to give confidence to the capital market, after all, for financing, it is really confidence as expensive as gold.
However, the real situation in Times China, perhaps this "letter of help" can be more authentically expressed.
Because even Times China auditors are not optimistic about the company. It is reported that EY, an auditor at Times China Holdings, pointed out in its 2021 financial report that it is concerned about the company's ability to sustainably operate.
In addition, Moody's Assistant Vice President/Analyst Kelly Chen said the negative outlook reflects uncertainty over the company's ability to raise new capital from the public markets over the next 12-18 months to support its business plans, restore its liquidity and meet its refinancing needs.
A large number of shares are pledged
More debt than not much money
This year is a big year for many housing enterprises to repay their debts, and Times China is no exception. According to Niu Jimin, executive director of Times China, the debt balance of the entire group at the end of last year was more than 53 billion yuan, which has successfully dropped by 8.1 billion yuan, exceeding the 13% decline rate.
The short-term debt due this year is 11 billion yuan, as of March 30, it has repaid a total of 2.5 billion yuan, and the debt that the company faces due to repay this year is only 8.51 billion yuan, which is not a large amount, and it is very confident to repay it on time.
Among them, the first part is overseas dollar bonds, by the end of April there are 2 dollar bonds, the company has repurchased 82.48 million US dollars in the open market, the company is actively preparing repayment funds, very confident to repay the debt on time.
The second part is domestic corporate bonds, with 2.7 billion yuan in the open market, 2 this year, one is 1.6 billion yuan that investors can choose to sell back in August this year, and the other is 1.1 billion yuan due in September.
Times China's confidence comes from the unlimited cash flow in the financial report.
According to the financial report, The Unlimited Cash of Times China Holdings fell from RMB22.2 billion at the end of June 2021 to RMB14.7 billion by the end of 2021.
However, it should be noted that a portion of this cash is kept at the project level and cannot be used immediately to repay the company's debts when needed.
In addition, with the completion of the financial reporting quarter, these payments will be paid gradually, and some institutions have assessed the cash and equivalents that are really available in Times China, perhaps between 5 billion and 7 billion yuan.
Therefore, whether liquid cash can cover short-term debt also depends on future performance. But with the end of April coming, can China, which says its annual reports are good and cash flow abundant, repay it on time?
More thought-provoking than this answer is why the "letter of help" was issued at this point in mid-April, whether it was the normal business behavior of Times China or the rush to deal with the dollar debt at the end of April.
It is also worth noting that times China will pledge the equity of subsidiaries that it can pledge, almost all of which have been pledged over and over again. From the following figure, it can be seen that the equity of the boss subsidiary of Times China is in a large area of pledge.
For a listed real estate company, this is definitely not a good phenomenon.
Equity pledge is simply to take their own shares to exchange money with others, and the company's financing difficulties can indeed solve the problem of the company's short-term shortage of funds through this way.
However, long-term equity pledges, and when the pledges are getting more and more serious, we can't be so optimistic. Because the equity is in the hands of others, once there is a problem, the equity of the listed company will change or even change hands, which is a dangerous signal.
For example, Shanghai Laixi, once a big bull stock, because the equity pledge is becoming more and more serious, even more than 90%, the result of the sharp decline in the stock price led to the largest shareholder forced to reduce its holdings as a margin, this move did solve the problem of listed companies, but hurt investors.
Passive reductions led to a sharp drop in stock prices, which caused serious losses to retail investors.