Jinke shares lost 26 billion yuan in two years, fell into a litigation turmoil, and the debt was 227.1 billion yuan, and it wants to go bankrupt and reorganize

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Jiang Chuya

Jinke Co., Ltd., once a 100 billion real estate leader, has officially launched bankruptcy reorganization to resolve the debt crisis.

Tianyancha App shows that on April 25, Jinke Co., Ltd. (000656.SZ, *ST Jinke) added 4 new pieces of information on the person subject to execution, with a total of more than 350 million yuan. The company has 490 pieces of information on persons subject to execution, with a total amount of more than 6.4 billion yuan. In addition, the company also has a number of consumption restriction orders, judgment defaulters and final case information.

Previously, Jinke announced on April 22 that the court ruled to accept its reorganization application. So far, Jinke has become the first large-scale national listed real estate enterprise in A-share to officially enter the reorganization procedure in recent years.

The Yangtze River Business Daily reporter noticed that Jinke Co., Ltd. crossed the threshold of 100 billion yuan in 2018, and the contracted sales in 2020 have exceeded 200 billion yuan, but then the sales volume has declined sharply for three consecutive years, and it will only be 21.8 billion yuan in 2023.

At the same time, the loss of Jinke shares has increased year by year, with a net profit loss of 21.39 billion yuan in 2022, a year-on-year decrease of 694.13%, and an estimated loss of 4.8 billion yuan to 7.8 billion yuan in 2023, with a total net loss of more than 26 billion yuan in two years.

As of the end of the third quarter of 2023, Jinke's total assets were about 260 billion yuan, its total liabilities were 227.1 billion yuan, short-term debts amounted to 41.867 billion yuan, and monetary funds were only 8.120 billion yuan. As of the end of 2023, Jinke and its subsidiaries have added a total of about 1.868 billion yuan of new debt principal due and unpaid.

Jinke shares, which have officially entered the reorganization procedure, can resolve the difficult situation of liquidity and achieve "nirvana rebirth"?

Huge losses of 26 billion in two years, sales plummeted

Jinke Co., Ltd., the "king of the southwest", which was born in Chongqing, has made great progress all the way, from 22.1 billion yuan in 2015 to 223.3 billion yuan in 2020, with sales rising all the way, achieving 9 times growth in 5 years, which is a model of high growth in the industry in recent years. According to the previous plan, by 2025, its sales scale will reach more than 450 billion yuan.

However, after 2020, Jinke's sales have fallen for three consecutive years. In 2021, the company's sales plummeted to 112.3 billion yuan, halved again to 54.86 billion yuan in 2022, and only recorded 21.8 billion yuan in 2023.

The company's performance has also fallen into huge losses, with a net profit loss of 21.39 billion yuan in 2022, a year-on-year decrease of 694.13%, and a net profit loss attributable to the parent company of 4.8 billion yuan to 7.8 billion yuan in 2023, with a total net loss of more than 26 billion yuan in two years.

Jinke said that the main reasons for the loss include the reduction of interest capitalization due to the gradual completion of existing real estate development projects, the provision for impairment of some projects, and the corresponding liquidated damages affected by liquidity risks.

Jinke also faces a lot of litigation and arbitration issues. Tianyancha shows that on April 25, Jinke added 4 new pieces of information on the person subject to execution, with a total of more than 350 million yuan. Tianyan risk information shows that Jinke shares have 490 pieces of information on persons subject to execution, with a total amount of more than 6.4 billion yuan. In addition, the company also has a number of consumption restriction orders, judgment defaulters and final case information. Huang Hongyun, the actual controller of Jinke shares, has also become a dishonest person subject to execution, and at the same time has been restricted from high consumption.

Initiation of restructuring of debts

In the face of huge losses and liquidity risks, Jinke chose to reorganize.

From being proposed for bankruptcy reorganization by creditors in May last year, to taking the initiative to apply for bankruptcy reorganization in February this year. On April 22, Jinke Co., Ltd. announced that the court ruled to accept the reorganization application of Jinke Co., Ltd. So far, Jinke has become the first large-scale national listed real estate enterprise in A-share to officially enter the reorganization procedure in recent years.

In addition, due to the court's ruling to accept the reorganization, Jinke shares were suspended for one day on April 23, and resumed trading on April 24, and were subject to delisting risk warning, and the stock abbreviation was changed from "Jinke shares" to "*ST Jinke".

In the current real estate market environment, debt problems have become a life-and-death disaster for many real estate companies. Jinke's choice of reorganization is also to resolve the debt crisis.

According to the court's investigation, Jinke shares have been unable to pay off the due debts, although the book assets are greater than the liabilities, but the existing liquidity is seriously insufficient, the main assets are difficult to realize, it can be determined that it obviously lacks solvency.

According to the third quarter report of Jinke last year, as of the end of the third quarter of 2023, Jinke's cumulative liabilities reached 227.1 billion yuan, of which the non-current liabilities due within one year reached 35.06 billion yuan. In the company's debt situation recently disclosed, as of December 29, 2023, the total amount of new unpaid debt principal due and unpaid by Jinke and its subsidiaries reached 1.868 billion yuan.

"During the reorganization period, the company will continue to actively do a good job in daily operation and management on the existing basis, and fully cooperate with the court and the administrator to promote the reorganization related work, and strive to complete the reorganization as soon as possible and restore the company's sustainable profitability. Jinke said.

The industry believes that if the reorganization goes smoothly, Jinke shares are expected to return to the development track, and if it fails, it may declare bankruptcy. This decision of Jinke is an important attempt in the current industry and market conditions, and its success or failure will have an important impact on the entire real estate industry.

Take multiple measures to help yourself and break the situation

In order to alleviate the dual pressure of performance and debt, Jinke actively looks for a way out, including making every effort to ensure the delivery obligation, improving the quality and efficiency of marketing, resolving the risk of existing debt, and actively planning transformation and upgrading.

The company has signed a strategic investment framework agreement with Great Wall Guofu Real Estate Co., Ltd., and will actively promote relevant work and introduce strategic investors in the future.

On June 20, 2023, Jinke Co., Ltd. announced that it intends to purchase 20% of the equity of Hengsheng Daye held by Keyi Small Loan, a holding subsidiary of Jinke Holdings, the controlling shareholder, by issuing shares, and after the completion of the transaction, Hengsheng Daye will become an important shareholding subsidiary of the company, and the company will realize the industrial synergy of "real estate + construction technology".

In terms of financing, Jinke has been communicating with various financial institutions. As of April 17, 2024, 82 projects have been included in the "white list" of Jinke Co., Ltd., and 16 whitelisted projects have successfully received support from financial institutions through new financing and other means.

As of the end of the third quarter of 2023, Jinke has been approved with a total of more than 3.7 billion yuan of special loans from the state and local governments, of which more than 3.4 billion yuan of available funds have been allocated to the project company, effectively alleviating the short-term liquidity pressure at the project level.

Entering 2024, the company will still increase its efforts to ensure the delivery of buildings. In the first quarter of this year, Jinke Co., Ltd. delivered a total area of 1.71 million square meters and a total of 9,681 sets.