Shimao's stock price soared 3 times hidden information

Good Cat Finance

2024-05-16 17:55Published in Guangdong

On the one hand, A-share Shimao shares (600823.SH) triggered delisting at par value, and on the other hand, the share price of H-share Shimao Group (00813.HK) soared 3 times in 20 days.

It is not an exaggeration to describe Shimao's share price by dancing on the edge of the cliff, and this once 300 billion yuan sales level real estate company is on the verge of life and death.

In the absence of any substantial business news, Shimao Group's stock price soared, in addition to considering the background of the real estate industry, what is more suspicious is the self-rescue operation of major shareholders.

Xu Rongmao, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), owns about 64 percent of the shares of Shimao Group, which in turn controls 64.5 percent of Shimao's shares.

When the share price of Shimao shares fell below 1 yuan, that is, when the stock price of Shimao Group changed.

Theoretically, when the share price of Shimao shares was 1 yuan, the overall market value was 1.613 billion yuan, but the overall market value of Shimao Group at that time was only 1.14 billion Hong Kong dollars, and the price difference magnified the self-help logic.

Therefore, both major shareholders and minority shareholders of Shimao shares have the motivation not to be reconciled to the destruction of the value of A-shares, and turn to the Hong Kong stock Shimao Group to try to recover its losses.

The most important thing is that what is the value of Shimao Group? This is also a key argument between the auditors and the management of Shimao Group.

As of the end of 2023, Shimao Group's interest-bearing liabilities were 263.9 billion yuan, which is at the same level as Sunac, but Shimao's monetary funds and sales are far less than Sunac's.

In addition to the above-mentioned uncertainties in the company's operation, the auditors did not express an opinion on Shimao Group's 2023 annual report, the key to which was the abnormal increase in interest-bearing liabilities and the asset valuation of related real estate projects.

Shimao's 2022 annual report and 2021 annual report, which were released only in the middle of last year, show that Shimao has abnormally increased its interest-bearing liabilities by nearly 100 billion yuan by changing its accounting treatment and concealing relevant pledge guarantees.

In the 2023 annual report, the auditors focused on the impairment of Shenzhen Shimao Shenzhen-Hong Kong Center.

The management of Shimao Group made an impairment loss of 1.4 billion yuan for this project with a book value of 24 billion yuan, but in the two auctions by creditors, the overall valuation was only 16.3 billion yuan, and the lowest auction price of 10.44 billion yuan was not sold.

The auditors were concerned that there were no bidders in the two rounds of auctions, and there was significant uncertainty about the fair value; Shimao's management believes that most of the land is undeveloped and the book value is mainly equal to the cost of the land incurred.

Whether the impairment of this project is sufficient or not is related to whether Shimao Group is insolvent, not to mention Shimao shares, which is mainly engaged in commercial real estate, as well as investment real estate and inventory with a book value of nearly 100 billion yuan.

After three years of huge losses, by the end of 2023, Shimao Group's equity attributable to shareholders of the parent company was only 14.72 billion yuan.

Shimao Group officially defaulted on its debt in July 2022 and proposed an offshore debt restructuring plan at the end of March this year, but the conditions of this plan are not attractive, and the release of valuable assets is not sufficient, and creditors do not buy it.

After the announcement of the offshore debt restructuring plan, CCB Asia filed a winding-up petition against Shimao in the High Court of Hong Kong, and a series of changes in Shimao's share price followed.

On the whole, Shimao and creditors have entered the stage of extreme game, but the chips of both sides seem to be relatively balanced, who can accept the maximum loss?

Shimao used to be the officially designated "white knight", and joined hands with Cinda and Dongfang to invest 4.5 billion yuan to bail out Fusheng Group, which is still in the midst of litigation.

Shimao's management has also lost trust in creditors and investors due to fraudulent financial statements. Being more proactive in restoring trust is an important priority for management right now.

But if you just let the stock price dance on the edge of the cliff, it is obviously a risky move, and the rescue and fall will soon be clear.

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