The net profit attributable to the parent company was lost for the first time, and the US$300 million bond due in 2024 has been successfully repaid within the 30-day grace period, maintaining the credit level of the open market.
◎ Author / Fang Ling, Chen Jiafeng
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[Sales collection frustrated, optimizing inventory structure is still the focus of work] Jinhui pre-receivables decreased by 36.6% from the beginning of the year to 37.66 billion yuan, dragged down by its weak sales growth, the annual estimated sales collection of 12.1 billion yuan, a sharp decline of 44.7% over the same period last year, the collection was significantly frustrated. Sluggish sales and no new projects since 2022 led to an increase in the proportion of completed inventory at the end of the year, with 15.408 billion yuan of completed properties held for sale in the inventory structure, an increase of 23.5% from the beginning of the year, and the proportion rose from 12.3% at the beginning of the year to 19.8%. Lack of new goods and difficulties in inventory removal are the common problems faced by real estate companies, and optimizing the inventory structure is still the focus of Jinhui's work.
At the end of 2023, Jinhui's total land reserve decreased by 16.7% from the beginning of the year to 21.62 million square meters, and the equity land reserve construction area was 20.667 million square meters, a decrease of 15.9% from the beginning of the year, and the equity ratio was 80.4% in terms of area. At present, Shanghai Company (formerly Yangtze River Delta, East China) has the largest land storage scale, accounting for 32% of the land storage area, followed by Xi'an Company (formerly Northwest China), with 23% of the land storage area.
[The settlement speed slows down, and the net profit attributable to the parent company loses for the first time] In 2023, Jinhui's carry-over income will be 33.8 billion yuan, a year-on-year decrease of 3%, and it is necessary to accelerate the return of funds. The provision for property impairment was approximately RMB1 billion, gross profit decreased significantly by 51% year-on-year to RMB2.53 billion, and consolidated gross profit margin decreased by 7.3pct year-on-year to 7.4%. The net profit loss for the first time was about 430 million yuan, which was due to the decrease of nearly 6% year-on-year in the revaluation income of investment properties, the increase in financing costs and the increase in the sales and management expense ratio. The net profit attributable to the parent company lost 580 million yuan for the first time, a year-on-year decrease of 134%, and the profit was under pressure.
At the end of the year, the scale of Jinhui's short-term bonds increased by 15% from the beginning of the year to 13.941 billion yuan, accounting for 47.4% from 32% at the beginning of the year, and the debt structure deteriorated. According to the latest announcement disclosed, on March 20, Jinhui failed to repay the notes due in 2024 with a coupon rate of 7.8%, with an outstanding amount of US$300 million, and on April 15, Jinhui has deposited the principal and accumulated interest into the designated bank account of the trustee, and successfully redeemed the maturing notes within the 30-day grace period, maintaining the credit level of the open market; Jinhui's cash short-term debt ratio is 0.51 times, liquidity is highly under pressure, and the three red lines are in the yellow file.
01
sale
The frustration of sales collection and the optimization of inventory structure are still the focus of work
In 2023, Jinhui will achieve a carry-over income of 33.8 billion yuan from development properties, a year-on-year decrease of 3.1%, and due to the impact of the regional structure of carry-over projects, the carry-over unit price has declined, and the carry-over area of development properties will be 2.66 million square meters, an increase of 2.8% year-on-year. In terms of regional structure, the carry-over income of the main regions of the Yangtze River Delta, East China, Northwest China and Bohai Rim increased by 20pct to 78.3% compared with last year, while the carry-over contribution of Southwest, Southeast, Central China and Shenzhen-Huizhou was relatively low.
While Jinhui's carry-over speed has slowed down in the past two years, the pre-receivables at the end of 2023 have decreased significantly by 36.6% from the beginning of the year to 37.66 billion yuan, and the coverage ratio of the carry-over income in the past year has decreased from 1.7 times at the beginning of the year to 1.1 times, due to the drag of sluggish sales growth. The estimated sales collection for the whole year was 12.1 billion yuan, a sharp decrease of 44.7% over the same period last year, and the collection was significantly frustrated.
Jinhui's sluggish sales and the lack of new projects since 2022 have resulted in a decrease of 24.6% from the beginning of the year to 12.1412 million square meters, accounting for 56.2% of the total land reserves, and the proportion of completed inventory has increased, with 15.408 billion yuan of completed properties held for sale in the inventory structure, an increase of 23.5% from the beginning of the year, and the proportion has risen from 12.3% at the beginning of the year to 19.8%, which may face certain pressure to decentralize. Optimizing the inventory structure is still the focus of Jinhui's work, and high-quality projects need to flexibly adjust the pace of pushing goods according to market heat, and increase marketing channels and efforts for hard-to-sell projects in a multi-pronged manner to promote the return of funds.
02
investment
The equity land reserve is 20.67 million square meters, and the Shanghai company accounts for more than 3%.
Affected by the continued downward pressure on real estate fundamentals in the recent stage, Jinhui will still have no new land in 2023. At the end of 2023, Jinhui's total land reserve decreased by 16.7% from the beginning of the year to 21.62 million square meters, and the construction area of equity land reserve was 20.667 million square meters, a decrease of 15.9% from the beginning of the year, and the equity ratio was 80.4% in terms of area.
In the early stage, Jinhui has begun several rounds of organizational structure adjustment, the main change is to adjust the original "headquarters-region-city-project" to "headquarters-big city company-area/project company" organizational model, and merge regional companies into city companies, so as to make management flatter and improve the efficiency of project management decision-making. From the perspective of soil storage structure, Shanghai Company (formerly Yangtze River Delta, East China) has the largest soil storage scale, accounting for 32% of the land storage area, followed by Xi'an Company (formerly Northwest), with 23% of the soil storage area, while Fujian Company (formerly Southeast China), Wuhan Company (formerly Central China), Beijing Company (formerly Bohai Rim) and Chongqing Company (formerly Southeast and Shenhui) account for 15.7%, 14.3%, 9.5% and 5.6% of the soil storage area.
03
profit
The settlement speed slowed down, and the net profit attributable to the parent company suffered a loss for the first time
In 2023, Jinhui's operating income will be 34.25 billion yuan, a year-on-year decrease of 3%, of which the carry-over income from real estate development will be 33.8 billion yuan, a year-on-year decrease of 3%.
Profitability, affected by the narrowing of the profit margin of the open market land in the past two years and the slowdown of the carry-over, the property impairment loss of Jinhui Group for the whole year was about 1 billion yuan, the gross profit decreased by 51% year-on-year to 2.53 billion yuan, and the comprehensive gross profit margin decreased by 7.3pct to 7.4% year-on-year. The net profit loss for the first time was about 430 million yuan, a year-on-year decrease of 121%, due to the revaluation income of investment properties decreased by nearly 6% year-on-year to 360 million yuan, the increase in financing costs and the increase in the sales and management expense ratio. The net profit attributable to the parent company lost 580 million yuan for the first time, a year-on-year decrease of 134%, and the profit was under pressure.
04
Debt repayment
Liquidity was under pressure, and the principal and interest of US$300 million debt were successfully settled
In 2023, Jinhui's financing channels will be relatively blocked, and according to the monitoring of the open market, due to the "second arrow" policy, it will successfully issue 2 medium-term notes (23 Jinhui Group MTN001 and 23 Jinhui Group MTN002) throughout the year, with a total issuance scale of 1.6 billion.
The interest-bearing liabilities at the end of the year were 29.428 billion yuan, down 22% from the beginning of the year, of which the scale of short-term debt increased by 15% from the beginning of the year to 13.941 billion yuan, accounting for 47.4% from 32% at the beginning of the year, and the debt structure deteriorated and the short-term debt repayment pressure increased. According to the latest announcement disclosed, on March 20, 2024, Jinhui failed to repay the notes due in 2024 with a coupon rate of 7.8%, with an outstanding amount of US$300 million, and on April 15, Jinhui has deposited the principal and accumulated interest into the designated bank account of the trustee, and successfully redeemed the maturing notes within a 30-day grace period, maintaining the credit level in the open market.
In addition, due to the pressure on Jinhui's sales side, refinancing difficulties and the increasing difficulty in recovering project funds to the group in the downward cycle, the cash held at the end of the year decreased by 42.6% from the beginning of the year to 7.073 billion yuan, which could not cover the short-term debt. At the end of the year, Jinhui's three red lines were in the yellow gear, the net debt ratio decreased by 9.5pct from the beginning of the year to 62.2%, and the asset-liability ratio after excluding pre-income continued to improve to 61%.
Typesetting丨Civil engineering