Vanke was "frightened"

All parties in the market should remain rational and avoid being carried away by panic.

Liu Wei/from Beijing

Caught off guard, the Vanke dollar bond incident affected the stock price.

As of the close of trading on October 31, Vanke A's share price fell 2.33% to 11.33 yuan per share, down 40.4% from the highest point of 19.01 yuan this year, a decline of more than 40%. This means that while the company is facing operating pressure, the senior management team's bonuses this year are also likely to be affected.

The continued downward trend of the real estate industry has made investors' concerns begin to touch the leading companies.

On October 31, in response to investors' questions about whether the company's sharp drop in US dollar bonds was due to solvency problems, Vanke Co., Ltd. (hereinafter referred to as "Vanke", 000002.SZ) made a quick response on the interactive platform of the Shenzhen Stock Exchange. Vanke said that the recent changes in the trading of some of the company's domestic and foreign bond varieties are not due to any problems with the company's fundamentals, but mainly due to market sentiment fluctuations. At the same time, there were false speculations about the company in the overseas market, which led to a sharp fluctuation in the price of the company's US dollar bonds at the end of last week.

"Affected by the recent changes in the real estate market and the new round of default of real estate companies, the confidence of some investors in private enterprises and mixed-ownership enterprises has continued to decline, resulting in the impact of Vanke bonds. At such times, it is more important for all parties in the market to remain rational and avoid being carried away by panic. A person close to Vanke said.

A person in charge of a real estate company said: "Sometimes confidence is more important than anything else, and the risk awareness of foreign capital is much greater than that of mainland capital, and sometimes it is inevitable to overkill." However, considering the overall situation of the current real estate situation, it will take a long time for foreign investors to regain confidence. ”

"Vanke's sharp fall in US dollar bonds may be affected by market sentiment fluctuations, but it cannot be ruled out that it may reflect its true value. Because the current recovery of the industry is far from meeting expectations, the market is not optimistic or even worried about Vanke's future liquidity and even the safety of US dollar bonds. Bai Wenxi, chief economist of IPG China, believes.

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The price of US dollar bonds fell

In recent months, many of Vanke's US dollar bonds have indeed experienced abnormal fluctuations.

According to the data of the DM Bond Check platform, since the beginning of August this year, the yield of many of Vanke's US dollar bonds has begun to exceed 10%, and in late October, the bond yield began to climb further, with the yield of many bonds rising to about 50% and the highest to close to 60%.

In response to investors' questions, Vanke said that the fluctuation of bond prices was mainly caused by fluctuations in market sentiment.

When listing the company's operating data, Vanke said that the company's current operation is normal, with a cumulative contract sales amount of 280.6 billion yuan in January ~ September, maintaining the top echelon of the industry, of which the contract sales amount in September was 32 billion yuan, an increase of 41.6% month-on-month. In terms of cash flow, the company has maintained positive operating cash flow for 14 consecutive years, and it remained positive after covering the land premium expenditure of 37 new projects in January ~ September.

Vanke said that as of the end of the third quarter of this year, the company had 103.7 billion yuan of funds on hand, and the coverage ratio of short-term debt was 2.2 times. During the year, the company had no overseas debts due, and the outstanding domestic credit debts were only 380 million yuan. At present, the company's financial situation is stable, and various fund arrangements and repayment arrangements are being carried out in an orderly manner. The company will pay close attention to market changes, actively strengthen communication with bond investors, assist investors to better understand the company's financial and operating conditions, and guide market prices to return to a reasonable level.

In terms of debt ratio control, Vanke is still in a leading position in the industry. According to the data of the third quarterly report, as of the end of September, Vanke's net debt ratio was 53.9%, and its monetary funds decreased from the medium-term to 103.68 billion yuan, and the coverage ratio for short-term debt was 2.2 times. As of the end of the third quarter, Vanke's interest-bearing liabilities due within one year accounted for 14.8%, down 5.7 percentage points from the beginning of the year.

Wind data shows that Vanke currently has 75 bonds with a total balance of 70.7 billion yuan, of which 41 bonds mature within one year with a balance of 17.9 billion yuan. In terms of US dollar bonds, Vanke did not have any offshore financing bonds due during the year, and the most recent bond due will be redeemed in February 2024.

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The pressure on performance and operation has not been reduced

In response to the US dollar bond issue that the outside world is concerned about, Vanke has also taken the initiative to respond.

At this year's interim results meeting, Han Huihua, chief financial officer of Vanke, said that Vanke completed 15 billion yuan of overseas refinancing in the first half of the year, and took the initiative to carry out financing replacement and short-term debt repayment in advance, so there was no overseas debt due during the year.

For the three US dollar bonds due next year, Vanke has also made full preparations in advance from three aspects: first, in terms of overseas own funds, Vanke holds billions of its own funds overseas that can be used to repay debts, second, Vanke's overseas platform has invested in domestic and foreign projects in the early stage, and project dividends, repurchases, and exits can provide sufficient funds, and third, overseas financing is carried out through the bank-side market, and Vanke has obtained the 2024 refinancing medium and long-term foreign debt quota from the National Development and Reform Commission in August, and has started communication with relevant banks.

Compared with Vanke's current ability to calmly deal with debt problems, this leading company, like most companies in the industry, is facing downward pressure on its performance.

According to the data of the third quarterly report, in January ~ September this year, the group achieved a cumulative operating income of 290.31 billion yuan, a year-on-year decrease of 14%; The net profit attributable to shareholders of the listed company was 13.62 billion yuan, down 20.3% year-on-year. Among them, the settlement area of the main real estate development business was 18.317 million square meters, contributing operating income of 244.21 billion yuan, down 19% and 17.4% year-on-year respectively.

In addition, Vanke's new version of the bonus plan - "2023~2025 Bonus Plan" was disclosed at the same time as the quarterly report, which was reviewed and approved on October 27. The main content is that, on the basis of fixed salary, the bonus continues to be based on net profit as the assessment indicator, and the difference is that Yu Liang, chairman of the board of directors of Vanke, and Zhu Jiusheng, president of Vanke Group, have added the adjustment coefficient of "annual stock price change", that is, the annual average of the daily compound closing price of the company's A shares as a comparative index.

In the past two years, with the adjustment of industry policies and changes in the market, many private real estate enterprises have faced liquidity risks. "If the market still cannot recover quickly in the future, and the liquidity of the industry is not repaired, the risk of the thunderstorm involving mixed ownership and even state-owned enterprises and central enterprise real estate enterprises will further rise. However, the specific extent of the impact and the extent of the impact still need to be observed. Bai Wenxi thinks.

In an interview, a mixed-ownership real estate enterprise urban project leader said, "In terms of product standards, investment layout, cost control, operational efficiency and debt ratio, Vanke has maintained an excellent standard." Therefore, from the perspective of observing a rational and excellent enterprise, the probability of Vanke being involved in risks is not large. "But it's worth saying that there are no absolutes in business.

He said that the downturn in the market will definitely affect all real estate companies in the market, regardless of the nature of the enterprise and the thickness of the safety cushion. Because the total supply and demand is declining, the market share that can be occupied by the enterprises will also decrease.

Duty Editor: Ma Lin

Editor in charge: Li Hongmei, Liu Ya

Review: Dai Shichao

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