Our reporter Fang Chao and Zhang Jiazhen reported from Shanghai
Under the pressure of delisting, many insured housing companies are starting a "shell defense war".
A few days ago, Shanghai Shimao Co., Ltd. (hereinafter referred to as "Shimao Shares", 600823.SH) issued an announcement that in order to enhance investor confidence, the controlling shareholder or its concerted actors intend to increase its shareholding by 100 million to 200 million yuan. Jinke Real Estate Group Co., Ltd. (hereinafter referred to as "Jinke Shares", 000656.SZ) also previously announced that the controlling shareholder has increased its holdings by 21.6791 million shares.
(Located in the heart of Shanghai, Shanghai World Trade Building.) Shimao official website/photo)
The reporter of "China Business News" noted that in addition to the increase in the shareholding of controlling shareholders, many real estate companies on the verge of delisting have also acquired assets across borders, showing their determination to transform into an emerging track. For example, Jinke previously stated that it intends to purchase 20% of the equity of Hengsheng Daye Construction Technology Group Co., Ltd. (hereinafter referred to as "Hengsheng Daye"), a subsidiary of the parent company, by issuing shares, while Rongsheng Real Estate Development Co., Ltd. (hereinafter referred to as "Rongsheng Development", 002146.SZ) also stated in the announcement that it intends to purchase 68.38% of the equity of Rongsheng Mengguli held by the controlling shareholder Rongsheng Holdings by issuing shares.
"The above-mentioned self-help actions made by these housing companies on the verge of delisting can indeed raise the stock price in the short term to avoid touching the face value delisting clause, and the extent to which it can play a role is closely related to the market situation, implementation means and strength at that time." IPG China chief economist Bai Wenxi told reporters.
A number of industry insiders also analyzed that the delisting of insured housing enterprises is actually a normal phenomenon in the capital market, which is conducive to accelerating the clearing of the industry. "However, for some real estate enterprises on the verge of delisting, in addition to actively revitalizing their existing projects and accelerating the completion of debt restructuring, they also need to fully promote sales to accelerate payment collection and grasp the initiative of transformation and development."
Controlling shareholders intensively increased their holdings
In the real estate stocks that are on the verge of touching the "1 yuan delisting" clause recently, the intensive increase in holdings of controlling shareholders is becoming the focus of industry attention.
On the evening of June 5, Jinke Co., Ltd. disclosed the progress of the controlling shareholder's increase in shares, saying that Caiju Investment, the main entity designated by Jinke Holdings, increased its holding of 2.95 million shares through centralized bidding transactions, accounting for 0.0552% of its total share capital, with a transaction amount of 2.8715 million yuan and an average transaction price of 0.973 yuan per share. A total of 11 key personnel increased their holdings by a total of 1,442,700 shares, accounting for 0.027% of their total share capital, through centralized bidding transactions in the secondary market, with a total increase of 1,420,400 yuan.
For the purpose of increasing its holdings of the company's shares, Jinke emphasized that "the company's stock price has fallen sharply recently, which has seriously deviated from the company's fundamentals", and decided to increase its holdings of the company's shares based on confidence in the company's future development prospects and high recognition of its value.
Coincidentally, Shimao has also previously issued an announcement to increase the shareholding of controlling shareholders.
Pull back the clock to May 31. At that time, Shimao issued an announcement that the controlling shareholder Fengying International or its concerted actors planned to increase its holdings within 3 months from May 31, with an amount of not less than 100 million yuan (inclusive) and no more than 200 million yuan (inclusive), and the increase price was not higher than 1.30 yuan per share.
"In view of the fact that the closing price of the company's stock is lower than the latest net assets per share, and the closing price of the stock has fallen by more than 30% in 20 consecutive trading days, in order to protect the interests of the majority of investors and enhance investor confidence, Fengying International or its concerted actors intend to increase their holdings of the company's shares." Shimao shares said publicly.
In addition to the intensive increase in holdings by controlling shareholders, many real estate companies on the verge of delisting have also tried to increase their stock prices through cross-border mergers and acquisitions.
For example, on June 6, Jinke issued an announcement that it intends to purchase 20% of the equity of Hengsheng Daye, a subsidiary of the parent company, by issuing shares. It is reported that the latter's main business includes green new building materials business, prefabricated EPC general contracting business, BIM and so on.
Relevant information shows that up to now, 8 real estate enterprises such as Shimao Co., Ltd. have issued announcements on the increase of controlling shareholders' holdings, as well as announcements on cross-border mergers and acquisitions. In the eyes of industry insiders, many A-share real estate companies on the verge of delisting have raised their stock prices through fixed acquisitions and shareholder holdings, striving to avoid the risk of "wearing a hat" or delisting, but whether they can achieve the expected effect remains to be tested by time.
"At present, the A-share market has certain particularities, and the 'shell' is still a relatively valuable resource." Lu Wenxi, a real estate market analyst at Shanghai Centaline, told reporters that for real estate companies, "the listed company platform is an important financing channel, so real estate enterprises will definitely have technical shell protection actions." Lu Wenxi analyzed that how much role the "shell" preservation action will play can only be "one step at a time."
A number of real estate companies may face the end of delisting
Behind the "fancy" actions to increase the stock price such as the increase of controlling shareholders of real estate enterprises and cross-border acquisitions, it is a true reflection of the accelerated liquidation of the real estate industry.
Relevant information shows that according to the latest version of the listing rules of the Shanghai and Shenzhen Stock Exchanges, the termination of listing of listed companies is mainly divided into two categories: compulsory termination of listing and voluntary termination of listing, the former is mainly divided into four delisting situations: trading indicators, financial indicators, normative indicators and major illegal indicators.
It is understood that the delisting of the face value belongs to the forced delisting of the trading category, that is, the closing price is lower than the face value of 1 yuan for 20 consecutive trading days, and the exchange can force the stock to be delisted. Public reports show that since the beginning of this year, the number of listed companies delisted because their stock prices have been below the face value of 1 yuan for a long time has reached 6. Among them, on June 6, Sichuan Blu-ray Development Co., Ltd. (hereinafter referred to as "Blu-ray Development", 600466.SH) became the first share of A-share real estate enterprises to be delisted from the par value.
In addition to Blu-ray Development, which has been delisted, the reporter found that Jiakaicheng (000918. SZ), MyHome (000667.SZ), Yuetai (600393.SH), Tahoe Group (000732. SZ), Songdu (600077. SH), Sunshine City (000671. SZ) and other 7 real estate companies are also considered to have basically locked in the delisting outcome because the closing price is less than 1 yuan for 20 consecutive days.
On June 13, Songdu issued an announcement that from May 17 to June 13, the daily closing price of the company's shares for 20 consecutive trading days was below 1 yuan, and "the company's shares have reached the conditions for terminating listing." The Shanghai Stock Exchange also made a decision to terminate the listing of Songdu shares.
The reporter combed and found that among the A-share real estate companies that have been delisted or are about to usher in the end of delisting, there are many real estate companies that have previously been in the real estate industry. For example, Sunshine City's sales scale has exceeded 200 billion yuan, known as the "Fujian dark horse" by the industry, and Songdu Co., Ltd. is one of the earliest "old eighteen" well-known professional real estate development enterprises in Hangzhou, and was famous for cross-border "salt lake lithium extraction" in 2022.
"Recently, the stock price of 7 A-share real estate enterprises has been below 1 yuan for 20 consecutive trading days, and they have basically been locked in delisting according to regulations, and the stock price of 7 real estate enterprises is about 1 yuan, hovering on the verge of delisting. In the future, there will be a wave of delisting of A-shares, and perhaps Hong Kong real estate companies will not be spared. Liu Shui, director of corporate research at the China Index Research Institute, said.
In addition to the A-share market, in terms of Hong Kong stocks, in addition to Xinli Holdings, which has been delisted by the Hong Kong Stock Exchange during the year, data from the China Index Research Institute shows that up to now, there have been including China Evergrande (03333. HK), China Aoyuan (03883. HK) and Xiangsheng Holdings Group (02599.HK) and 21 Hong Kong-listed mainland real estate enterprises are in a state of suspension. According to relevant regulations, relevant real estate enterprises will face the risk of delisting if they suspend trading for more than 18 months, and many real estate companies have approached this "dangerous moment" indefinitely.
"If it is delisted, the liquidity of real estate enterprises will naturally be further reduced, and the difficulty of debt restructuring and recovery will also increase, which will also mean a greater loss of stock prices for public investors." Bai Wenxi said that as far as the real estate industry is concerned, the liquidation of some insured housing enterprises is an inevitable phenomenon of market replacement and iteration, which is conducive to maintaining the healthy development of the capital market and resource allocation capabilities, and is also conducive to the concentration of the market to high-quality and advantageous enterprises, which is also an important part of the market self-regulation mechanism.
"We believe that companies facing the risk of delisting are still isolated phenomena, and their impact on the real estate sector is relatively limited, so they should be viewed rationally." Analysts at BOC Securities believe that in the short term, the market's attention and popularity of real estate stocks will decrease, and direct financing channels will also be affected, which to a certain extent reflects the market's lack of confidence in the real estate industry. "However, we believe that companies at risk of delisting are still isolated phenomena and have a relatively limited impact on the overall real estate sector."
It is still necessary to resume business and actively "save yourself"
"At present, the most urgent task facing suspended real estate stocks in the mainland is to strive to resume trading as soon as possible, reissue financial performance reports, promote debt restructuring and make significant progress in reissuing financial performance reports and promoting debt restructuring in accordance with the content of the Hong Kong Stock Exchange resumption guidelines, and prove compliance with the relevant listing rules to complete the resumption of trading guidelines." Liu Shui analysis believes that housing enterprises need to resume normal operations as soon as possible, and at the same time actively help themselves.
Liu Shui further said that these real estate enterprises also need to complete debt restructuring as soon as possible, especially the actual controller or major shareholder of the insured housing enterprise should actively organize self-rescue, take measures such as disposing of assets, increasing shareholder borrowings, shareholder capital injection, shareholder guarantees, etc., to win the trust of creditors and promote the early adoption and implementation of the debt restructuring plan.
"Recently, Landsea Green Management has resumed trading, and Sunac China and China Aoyuan debt restructuring has ushered in new progress." In Liu Shui's view, at the same time, there are also creditors who have joined the debt restructuring agreement, which is another step further for the two companies to fully complete the debt restructuring, which will help restore normal production and operation.
In addition to mainland real estate enterprises listed on the Hong Kong stock market, for the follow-up self-rescue actions of real estate enterprises that are currently on the verge of delisting in the A-share market, Bai Wenxi believes that in the short term, it is necessary to actively promote debt and asset restructuring, introduce strategic investors and transform and develop new businesses, etc., to resolve the delisting risk they are facing.
Bai Wenxi also said that real estate enterprises on the verge of delisting need to accelerate debt resolution, complete asset and business restructuring in the medium and long term, and even resume operations as soon as possible through corporate restructuring and business transformation, and reverse performance to achieve sustainable development.
"The 'self-help' of housing enterprises in danger must not stay at the level of 'lying down and waiting for policies'." Lu Wenxi emphasized that for the insured housing enterprises that are on the verge of delisting, the initiative must be in their own hands, the price of the project should be reduced, and the sale should be sold, and must not be delayed, "first return some funds and then say, cash flow is the most important."
Liu Shui also analyzed that insured housing enterprises need to accelerate the sales of better projects, quickly return funds, ensure cash inflow, and enhance debt repayment ability. Bai Wenxi also said that in addition to increasing the push of the market, insurance housing enterprises also need to communicate with the regulatory authorities and appropriately reduce prices and promotions under the conditions permitted by the policy to quickly return funds.
(Editor: Zhang Jiazhen Proofreader: Yan Jingning)