Yangtze River Business Daily reporter Jiang Chuya
The loss has intensified, and CCCC Real Estate is getting farther and farther away from the 100 billion sales target it once set.
On July 5, CCCC Real Estate (000736. SZ) released its 2024 semi-annual performance forecast, expecting a net loss of about 1 billion yuan in the first half of the year, compared with a net loss of 569 million yuan in the same period last year, and the loss further expanded. The company said that due to the change in the structure of the carry-over project, the gross profit margin of the project delivered in the current period decreased significantly, which made the performance unsatisfactory.
The Yangtze River Business Daily reporter noticed that in recent years, CCCC Real Estate's "hematopoietic" ability has declined, its performance has declined sharply, and its net profit has declined for five consecutive years since 2019.
In 2023, CCCC Real Estate will lose 1.673 billion yuan, a year-on-year decrease of 5029.65%, and lose the profits of the past four years in one year.
As the delivery of the real estate business fell short of expectations, CCCC Real Estate's sales performance declined year by year. From 2021 to 2023, its sales will be 56 billion yuan, 45.8 billion yuan and 37.361 billion yuan, respectively. From January to March 2024, the full-caliber contracted sales amount of CCCC Real Estate was 4.070 billion yuan, a year-on-year decrease of 59.57%.
The company's debt situation is also not ideal, and the funding gap is still obvious. As of the first quarter of 2024, CCCC Real Estate's monetary funds were 10.868 billion yuan, while the non-current liabilities due within one year were 19.188 billion yuan, with a funding gap of 8.32 billion yuan, and it was difficult for the book funds to cover the debts that should be repaid within one year.
From 2016 to 2023 and the first quarter of 2024, CCCC Real Estate's asset-liability ratio after excluding advance receipts has exceeded the warning line of 80% for eight consecutive years.
It is difficult to expand the sales target of 100 billion yuan in losses
According to public information, CCCC Real Estate was listed in 1997, and the company's main business is real estate development, operation and sales business, and at the same time actively explores and develops emerging businesses such as financing agency construction, characteristic towns, TOD urban complexes, urban renewal, industrial real estate, and logistics real estate.
In recent years, CCCC Real Estate has fallen into a vicious circle of "increasing income but not increasing profits". From 2018 to 2022, CCCC Real Estate's operating income rose from 8.948 billion yuan to 38.467 billion yuan, and the net profit attributable to the parent company declined all the way, with 810 million yuan, 540 million yuan, 347 million yuan, 236 million yuan and 34 million yuan respectively.
In 2023, CCCC Real Estate will rarely record a loss. During the reporting period, CCCC Real Estate achieved operating income of 32.468 billion yuan, a year-on-year decrease of 15.6%; The net profit attributable to the parent company was -1.673 billion yuan, a year-on-year decrease of 5029.65%.
At the same time, CCCC Real Estate's gross profit margin also showed a downward trend. From 2020 to 2023, the gross profit margin of CCCC Real Estate will be 26.52%, 22.91%, 13.43% and 10.46% respectively.
In the first quarter of 2024, CCCC Real Estate's operating income increased by 28.64% year-on-year, but the net profit attributable to the parent company was -219 million yuan, which was still negative.
On July 5, CCCC Real Estate released the 2024 semi-annual performance forecast, which is expected to have a net loss of about 1 billion yuan in the first half of the year, compared with a net loss of 569 million yuan in the same period last year, an increase of 75.9%; The net loss after deducting non-profits was about 1.02 billion yuan, compared with a loss of 587 million yuan in the same period last year, and the loss increased by 73.76%.
As for the main reason for the loss, CCCC Real Estate believes that due to factors such as the change in the structure of the company's carry-over projects, the gross profit margin of the projects delivered by the real estate development business in the current period has decreased significantly compared with the previous year; With the increase in the number of completed real estate projects and the increase in the company's expensed interest, the financial expenses for the current period increased compared with the same period last year.
Li Yongqian, chairman of CCCC Real Estate, once put forward the goal of "sprinting 35 billion yuan in 2019, 50 billion yuan in 2020, and exceeding 100 billion yuan in sales in 2023" in 2019. From 2021 to 2023, CCCC Real Estate's sales performance will decline year by year, with 56 billion yuan, 45.8 billion yuan and 37.361 billion yuan respectively, and the sales target of 100 billion yuan will be disappointed.
From January to March 2024, CCCC Real Estate's full-caliber contracted sales amount was 4.070 billion yuan, a decrease of 59.57% over the same period of the previous year; the contracted sales area of all calibers was 195,700 square meters, a decrease of 59.77% over the same period of the previous year; The contracted sales amount of equity caliber was 3.264 billion yuan, a decrease of 52.76% over the same period of last year.
CCCC Property's investment in the land market has also shrunk significantly. According to the annual report, in 2023, CCCC Real Estate will only add land reserve projects in Chengdu and Hefei, covering an area of 97,100 square meters, with a construction area of 215,300 square meters and a land price of 2.77 billion yuan.
High inventories and increased debt repayment pressure
Unsatisfactory sales led to poor depletion, and the company's inventory was high.
According to the annual reports of previous years, as of the end of 2020, the end of 2021, the end of 2022 and the end of 2023, the book value of CCCC Real Estate's inventory was 72.035 billion yuan, 108.894 billion yuan, 106.943 billion yuan and 93.256 billion yuan respectively, accounting for 72.39%, 76.71%, 77.89% and 76.04% of the total assets respectively.
"The liquidity of the company's inventory directly affects the company's asset liquidity and solvency, if the company due to the sluggish sales of projects on sale resulting in poor inventory turnover, it will bring greater pressure on solvency and capital allocation." CCCC Real Estate said.
Although the company has a background in a central enterprise, its debt situation is not ideal, and the funding gap is still obvious. From 2016 to 2023 and the first quarter of 2024, the asset-liability ratios of CCCC Real Estate after excluding advance receipts were 82.1%, 84.23%, 82.1%, 82.47%, 83.39%, 82.04%, 82.61%, 82.51% and 82.05% respectively, which has exceeded the warning line of 80% for eight consecutive years.
In the first quarter of this year, CCCC Real Estate's debt repayment pressure further increased, and the non-current liabilities due within one year reached 19.19 billion yuan. During the same period, CCCC Real Estate's monetary funds were 10.87 billion yuan, and it was difficult for the book funds to cover the debts that should be repaid within one year.
In addition, the high cost of financing has further increased the company's financial burden. CCCC Real Estate's financing channels mainly include bank loans, bonds, trust financing, loans from controlling shareholders, and other financing channels, with an average financing cost of 1.8%-8.4%. As of the end of 2023, CCCC Real Estate has raised a total of 61.028 billion yuan.
CCCC Real Estate said that in 2024, it will continue to optimize the financing structure, adopt diversified financing methods, and control the growth rate of interest-bearing liabilities.
Previously, in February 2023, it announced that it planned to issue shares to no more than 35 specific targets, raising a total of no more than 3.5 billion yuan, and the raised funds will be used for projects with a total investment of 9.684 billion yuan. However, the company has since adjusted the fundraising quota twice, and announced on June 20, 2024 that the raised funds have shrunk to 438 million yuan.
On the same day as the disclosure of the performance forecast, CCCC Real Estate also disclosed a lawsuit in which the subsidiary was sued for failing to repay the principal and interest of the loan.
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