Shenzhen Guarantee Group issued no more than 4 billion bonds in a row, all of which were used to repay debts

Reporter Zhang Xiaodi

On October 25, Shenzhen Guarantee Group Co., Ltd. (hereinafter referred to as "Shenzhen Guarantee Group") announced that it would issue no more than 1.5 billion corporate bonds in a public offering. In early August, Shendan Group had just issued 2.5 billion yuan of corporate bonds.

According to the relevant announcements, in July 2021, Shenzhen Dan Group obtained the permission of the CSRC to publicly issue corporate bonds with a total face value of not more than RMB6 billion to professional investors.

According to The Shenzhen Group, the 6 billion yuan bond line will be issued in installments, and "21 Shenzhen Bear 01" is the first issue under the bond, which will be issued in August 2021, with a scale of 2.5 billion yuan. "21 Shendan 02" is the second tranche of the bonds, "the scale of the issuance is not more than RMB1.5 billion (including RMB1.5 billion), and the remaining part is issued within 24 months from the date of registration and issuance by the CSRC, that is, from November 1, 2021."

The interface news reporter noted that this is the first time that Shendan Group has issued bonds to the open market since its establishment in 2007. According to the prospectus, the purpose of the offering of "21 Shendan 01" and "21 Shendan 02" is to repay the debts of the company's headquarters and subsidiaries after deducting the issuance fee.

According to the prospectus, as of December 16, 2021, the total loan balance of Shenzhen Dan Group and its subsidiary Shenzhen Xiaozhong dan commercial factoring Co., Ltd. was about 5.561 billion yuan.

The "21 Deep Burden 02" coupon rate inquiry range is 2.60% to 4.10%, the term is 3 years, interest is paid annually, and the principal is repaid once at maturity. The previous interest rate of "21 Deep Burden 01" was finally determined to be 3.20%.

According to the relevant announcements, like "21 Shendan 01", the lead underwriter, bookrunner and bond trustee of "21 Shendan 02" are also Guosen Securities.

Shenzhen Investment Holdings Group was founded in December 2007 by Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "Shenzhen Investment Holdings"), which holds 52.28% of its equity as its controlling shareholder, and the remaining shareholders are Shenzhen Stable Development Investment Co., Ltd. (hereinafter referred to as "Shenzhen Pingfa") and Shenzhen Longhua Construction and Development Co., Ltd. (hereinafter referred to as "Longhua Construction"), which hold 29.85% and 17.87% of the shares respectively.

Among them, Shenzhen Investment Control and Shenzhen Pingfa are both companies under the Shenzhen Municipal State-owned Assets Supervision and Administration Commission, while Longhua Construction is a wholly-owned company under the State-owned Assets Supervision and Administration Commission of Shenzhen Longhua District.

The business scope of Shendan Group is mainly engaged in guarantee guarantee business, project performance guarantee, etc. By the end of 2020, there were 10 first-tier subsidiaries included in the scope of the Group's consolidated financial statements, with a total of 5,532 guarantee businesses and a total balance of 49.873 billion yuan.

According to incomplete statistics, its guaranteed customers include Sunwoda (SZ:300207), BGI (SZ:300676), Guolian Aquatic Products (SZ:300094), Hytera (SZ:002583), Palm (SZ:002431), CIMC (SZ:000039), etc.

As of the end of June 2021, Shenzhen Insurance Group had total assets of RMB32.195 billion, net assets of RMB18.525 billion, monetary assets of RMB9.660 billion, total liabilities of RMB13.670 billion and an asset-liability ratio of 42.46%.

In terms of operation, from 2018 to the end of June 2021, Shendan Group continued to be profitable, and in 2019, it achieved a net profit of 724 million yuan, down 20.99% year-on-year, but in 2020, its net profit increased by 33.71% year-on-year, and in the first half of 2021, it achieved a net profit of 763 million yuan, an increase of 37.72% year-on-year.

In this regard, Guosen Securities said that the latest operating, financial and cash flow situation of Shenlan Group was normal, and there were no major adverse changes. According to the credit rating issued by China Securities Pengyuan, the credit rating of the main body of Shenzhen Group is AAA, the credit rating of the bonds in this period is AAA, and the rating outlook is stable.

A broker bond business practitioner told the interface news reporter that due to the good financial fundamentals of the Shenzhen Group, coupled with the endorsement of Shenzhen State-owned Assets, among similar enterprises, the bond redemption risk is low, so, unsurprisingly, the interest rate of the "21 Deep Burden 01" will still be 3.20%;

As of the end of 2020, Shendan Group has been granted credit from large banks such as China Construction Bank, Ping An Bank, Bank of Beijing and Bank of China, of which the top ten banks have a total credit line of 62.4 billion yuan, far exceeding the total amount of its external guarantees. The industry insider said that strong bank credit is also one of the guarantees for its smooth issuance of bonds.

However, the person also said that as a company with external guarantees as the main business, the increase in obligations also means that the potential risks have increased, which is also worth the attention of investors.