On May 13, Yuyuan Co., Ltd. (600655. SH) announced the termination of the 4.25 billion yuan private placement and applied to the Shanghai Stock Exchange to withdraw the relevant application documents, the reason is "comprehensive consideration of the current capital market environment, the company's development plan, safeguarding the interests of existing shareholders and other factors". It is worth noting that due to the net breaking of the share price of Yuyuan shares, the private placement has touched the regulatory red line; In addition, the regulator has questioned its private placement of funds to invest in real estate business in disguise.
The failure of the financing plan to replenish blood made Yuyuan's shares even worse. Dragged down by the real estate business, Yuyuan shares have been under pressure in terms of performance and capital chain in recent years. Yuyuan shares, which have high deposits and loans, only had interest expenses of 1.55 billion yuan last year. Despite the lack of money on the books, Yuyuan shares still have nearly 1 billion deposits flowing to affiliated financial companies, far exceeding the balance of loans; In addition, Yuyuan continues to provide large amounts of financial assistance to related parties.
The performance was under pressure, and the fundraising was suspected of being invested in real estate
The fixed increase has long been traceable.
On November 8, 2023, the Shanghai and Shenzhen Stock Exchanges announced the optimization of refinancing regulatory arrangements, setting "five red lines" to make stricter and tighter arrangements for the refinancing rhythm and financing scale of listed companies. For example, strictly restricting the refinancing of listed companies in the case of broken issuance and broken net; Strictly control the financing interval of continuous loss-making enterprises; Strictly control the relevant requirements for refinancing funds to be mainly invested in the main business.
Obviously, the share price of Yuyuan shares has long fallen below the net asset value per share, triggering the regulatory red line for refinancing.
Since 2023, the share price of Yuyuan shares has continued to be below 8 yuan (before the resumption); As of May 14, the closing price was 6.01 yuan. As of the first quarter of 2024, the net asset value per share of Yuyuan shares is 9.36 yuan.
It is worth noting that the private placement financing of Yuyuan shares has been questioned by the regulator for investing in real estate-related businesses in disguise.
In March 2023, Yuyuan Co., Ltd. released a fixed increase plan for the first time, planning to raise 8 billion yuan to invest in 5 projects, including the jewelry and fashion business sector, the company's digital operation capacity building, and loan repayment. After two revisions to the financing plan, the "cultural commercial retail expansion project" was cut, and the amount of funds raised was reduced by nearly 5% to 4.25 billion yuan.
Private placement project, source: announcement
The exchange issued a review inquiry letter for the private placement, requiring an explanation of the necessity of implementing the fundraising project, whether it is invested in the main business, and whether it is in line with relevant national industrial policies; Whether the raised funds are invested or disguised to real estate-related businesses, whether the raised funds are used for incremental projects such as land auctions and new real estate development, the necessity and reasonableness of replenishing working capital and repaying bank loans, and whether the repayment of loans is related to real estate business.
According to the data, Yuyuan Co., Ltd., formerly known as Yuyuan Mall, focuses on jewelry, department stores, handicrafts and other related consumer businesses. In 2018, Yuyuan completed a major asset restructuring and integrated Fosun's real estate business. Since then, Yuyuan has become one of the important listing platforms of Guo Guangchang Fosun. As of 2023, Yuyuan's property development and sales revenue will be 135.58 yuan, accounting for 23.3% of total revenue.
At present, real estate sales have seriously dragged down the performance of Yuyuan shares. In 2023, Yuyuan Co., Ltd. will deduct non-net profit of -451 million yuan, which is the first loss of non-net profit since listing, due to "changes in the sales carry-over cycle of property development projects and industry changes".
In the face of its own lack of hematopoietic capacity, Yuyuan Co., Ltd. accelerated its weight loss and blood recovery, and did not hesitate to reduce its holdings of high-quality assets such as Zhaojin Mining, Jinhui Liquor, and the "International Gem Certification Giant" IGI Group of Belgium to alleviate the pressure on cash flow.
But at the same time, even if it is overwhelmed, Yuyuan shares still do not forget to take over the "weaker" assets of major shareholders, including some real estate-related assets.
For example, in September 2022, Yuyuan Co., Ltd. acquired 100% of the shares of Highland Asset Management, a property management asset under Fosun International, for 260 million yuan. Highland Asset Management's net profit in 2021 was -69.9354 million yuan. As of June 30, 2022, the book debt-to-asset ratio of Highland Asset Management was approximately 87.60%. Yuyuan shares have said that after the investment and acquisition, the company's asset-liability ratio will exceed 70%.
Deposits and loans were both high, and nearly 1 billion deposits flowed to related parties
30% of the funds in the fixed increase plan of Yuyuan Co., Ltd. are used to repay the loan. The miscarriage of the fixed increase means that the short-term debt repayment pressure of Yuyuan shares is difficult to alleviate through financing.
As of the end of 2023, the asset-liability ratio of Yuyuan shares is 68.03%. The company's short-term borrowings were 10.131 billion yuan, non-current liabilities due within one year were 9.025 billion yuan, and long-term borrowings were 18.938 billion yuan. The monetary funds were only 9.171 billion yuan, of which 4.078 billion yuan were restricted funds. Obviously, monetary funds are not sufficient to cover all liabilities due within a year.
Balance of monetary funds, source: 2023 annual report
It is worth noting that Yuyuan shares last year had 1.113 billion yuan of deposits deposited in affiliated financial companies.
In 2023, Yuyuan Co., Ltd. will have a fixed deposit balance of 982 million yuan, a demand deposit balance of 91.1344 million yuan, and a margin balance of 0 yuan, and a deposit interest income of 64.2862 million yuan in the reporting period, while the company borrowed a balance of 191 million yuan from it, and incurred a loan interest expense of 17.3352 million yuan. According to rough estimates, the interest rate on Yuyuan's deposit with Fosun Finance is 6%, and the borrowing rate is 9%.
In fact, in the past, Yuyuan shares deposited more deposits with Fosun Finance Company. Taking 2022 as an example, the deposits of Yuyuan shares with Fosun Finance Company, a related party, were 3.403 billion yuan, accounting for 31.4% of the current monetary funds; At the same time, Yuyuan Co., Ltd. borrowed 40 million yuan from Fosun Finance Company.
According to the annual report, Yuyuan's financial expenses in 2023 will be 1.515 billion yuan, including interest expenses of 1.55 billion yuan. With interest costs so high, why wouldn't the company consider paying with cash deposits? Is the asset-liability structure of both deposits and loans reasonable? A large amount of funds have been deposited in related parties for a long time, and the deposit amount far exceeds the borrowing amount, does this involve capital occupation?
In addition, Yuyuan shares continue to provide financial assistance to related parties. According to the annual report, Yuyuan Co., Ltd. will borrow 14.368 billion yuan from shareholders of the joint venture company in 2023. According to recent disclosures, Yuyuan plans to provide financial assistance to its joint ventures in 2024 with a total amount of no more than 16.08 billion yuan. There are a total of seven joint ventures receiving financial assistance, all of which are principally engaged in real estate development.
Up to now, Fosun holds a total of 61.8% of the shares of listed companies. Wind data shows that the equity pledge ratio of Fosun's major shareholders is quite high, and the pledge rate of many companies has reached 100%. With the continuous decline in the stock price, the above-mentioned pledged shares have fallen by more than 10% so far.
Pledge of major shareholders, source: Wind
After the fixed increase and folding, how will Yuyuan shares resolve the risk of debt repayment? Can Yuyuan, which is too busy to take care of itself, provide ammunition for major shareholders? Titanium Media App will continue to pay attention.
(This article was first published on the Titanium Media App, by |.) Ma Qiong)