Choose a good book2021-07-31 21:05
01
The end of the road is crazy
In the 90s, there was an American blockbuster "Thelmaandlouise", where two female good friends Selma and Louise were in a bar, and were threatened by Harlan's violence and forced to shoot and kill Harlan in self-defense. Unwilling to face the courtroom and prison, the two decided to drive all the way and the police chased them all the way. Finally, at the Grand Canyon, Selma and Louise, who had no way to escape, smiled at each other, clasped their hands, and drove to the Grand Canyon to kill themselves.
Open NetEase News to see more pictures
Evergrande, which has been "running wildly" for a long time, now seems to have encountered its own Grand Canyon:
• Evergrande shares have plunged 72% in the past year. The company, which has a debt of 1.95 trillion yuan, was forced to announce the cancellation of the special dividend plan. Since Xu Jiayin holds a 70% stake in Evergrande, he could have received valuable cash flow from his first dividend since 2018.
• In June, Fitch and Moody's, among the top three international rating agencies, both downgraded Evergrande. S&P said Evergrande "is still an asset-rich company" but has reduced the peak of contract sales prices of more than 10,000 yuan to an average of 8,100 yuan per square meter, and there is no room for further decline.
As China's largest real estate development enterprise, Evergrande is facing the most serious test of life and death since the establishment of the company:
• According to Tianyancha data, 49 local companies directly controlled by Evergrande Real Estate became executors. Evergrande Lanzhou, Hefei, Nanning, Huanggang and other local companies and their legal representatives are also restricted from high consumption.
• On June 29, Sankeshu Paint, an upstream supplier that has been cooperating for more than a decade, issued an announcement that Evergrande's overdue bills amounted to 51.3706 million. Evergrande quickly responded that it had been paid. This is known as the "Announcement Dunning" event.
• On July 19, the Yixing Branch of Guangfa Bank applied to freeze the deposits of Evergrande Real Estate Bank of 132.01 million yuan or to seal or seize other assets of equivalent value. On July 22, Evergrande and Guangfa Bank announced a settlement.
• On July 29, Langfang Development issued an announcement that the 76.0321 million shares of Langfang Development held by Evergrande Real Estate were frozen from now on. The controlling shareholder of Langfang Development (600149.sh) is a subsidiary of Langfang State-owned Assets Supervision and Administration Commission. Evergrande Real Estate Group is the largest shareholder of Langfang Development, holding 20% of the shares. The reason for the freeze is that Xiaogan Gaochuang Investment Co., Ltd. sued Evergrande Real Estate and "Evergrande Wuhan" in court. In 2020, Xiaogan Gaochuang transferred the equity of a company to Evergrande Wuhan, forming a commercial ticket of 682 million yuan.
• On July 29, Huaibei Mining (600985.sh) announced that it had sued Evergrande and its subsidiaries for 401 million yuan in arrears of project payments and liquidated damages.
• China Evergrande is one of the largest issuers in China. Since the end of 2020, the overdue situation of Evergrande commercial tickets has become more and more intense. Since June, the discount on individual commercial tickets has even exceeded 30% – interestingly, Evergrande's slogan for promoting real estate is also 30% off.
• Evergrande's payables figure was 46.6 billion yuan last year, and this year it has surged 16 times to 740 billion.
• According to Evergrande's 2020 annual financial report, as of the end of 2020, its total interest-bearing liabilities were 716.532 billion yuan, of which overseas debt was 178.974 billion yuan. Evergrande said at the end of March that its interest-bearing liabilities had fallen to 674 billion yuan, down 23 percent from a year ago.
What is even more dangerous is that Evergrande has encountered many local governments this time:
• The Shaoyang municipal authorities issued a legal notice requiring Evergrande to stop pre-sales in the city. The city later lifted those restrictions.
• The Lanzhou Municipal Bureau of Natural Resources issued an announcement requiring 41 development companies to pay back the outstanding land transfer fees as soon as possible. There are 20 companies on the list that belong to China Evergrande. There are many problems in "Lanzhou Evergrande Cultural Tourism City", including pre-sale funds not deposited into the regulatory account as required, and subscription fees are collected without obtaining a pre-sale license.
• In Changsha, Hunan, Chongzuo, Guangxi and other places, the Evergrande project has also been interviewed by the local government due to the repeated occurrence of the above situations.
• On July 28, the "Letter of Heze Housing and Urban-Rural Development Bureau on the Investigation and Handling of Suspected Violations of Laws and Regulations in Evergrande Real Estate Projects" pointed out: Evergrande Huafu and Evergrande Oasis Projects developed and constructed by Heze Hengfa Real Estate Company and Evergrande Yuelanting Projects developed and constructed by Heze Dijing Real Estate Company sold commercial housing at 4200 yuan / square meter and 3800 yuan / square meter respectively, and the price was much lower than the market price, suspected of unfair competition. As a prefecture-level city, the price of new real estate in Heze is generally 6,000 to 8,000 yuan, which is already the lowest house price in Shandong prefecture-level city (Fan Li, Liu Bang and my hometown).
Heze, Shandong: the capital of the national flower peony, the hometown of the good Han of Shuihu
(Heze peony A world, global peony out of Heze)
It should be noted that in real estate development, local governments are the most important "stakeholders", and once the relationship with local governments is deadlocked, it will be difficult for developers to gain a foothold in the local area. It is conceivable that Evergrande, which cannot even take care of local government relations, has a "worrying future" in the future.
Evergrande's "fracture-type discount" in the country looks like the market behavior of enterprises, but it often brings unbearable consequences to local governments:
• Old owners will be angry because of price cuts, triggering mass incidents;
• Once price cuts trigger a chain reaction, it may endanger local financial stability and local fiscal revenue sources.
02
Why Evergrande?
Evergrande is in trouble for four reasons:
• The regulatory authorities have issued "three red lines": the asset-liability ratio of housing enterprises after excluding pre-collection shall not be greater than 70%; the net debt ratio shall not be greater than 100%; and the "cash short-term debt ratio" of housing enterprises shall be less than 1. For capital-intensive housing enterprises, this new regulation can be said to be "Taishan pressure top".
• Regulatory pressure all real estate enterprises are treated equally, why is Evergrande the most dangerous? As the name "Evergrande" suggests, the quest for scale has almost become the company's unchangeable DNA.
• Among all the real estate enterprises, Evergrande is probably the most diversified: it owns eight major industries such as Evergrande Real Estate, Evergrande New Energy Vehicles, Evergrande Property, Hengteng Network, Caravan Treasure, Evergrande Children's World, Evergrande Health, Evergrande Ice Spring, and even a pig breeding enterprise. Although the market value of "Evergrande Automobile" is as high as HK$120 billion, it has fallen from a high of 72 yuan all the way to 12 yuan. New energy vehicles are already in full swing, Evergrande Automobile is still not "listed", and the prospects are not optimistic. Historically, there was only one successful diversification company: General Electric (GE) in the United States, but today's GE has long since faded its aura and has become a faltering company.
• In recent years, Evergrande has received continuous negative news, including the investment of hundreds of billions of yuan in HaihuaDao being punished by the Ministry of Environmental Protection.
• Caixin reported: Regulators are trying to penetrate more than 100 billion yuan of related party transactions between Evergrande and Shengjing Bank, which is the largest shareholder of Shengjing Bank.
03
This time is different?
In history, Evergrande is like "a cat has nine lives", repeatedly turning dangers into disasters.
For the first time, in the 2008 financial crisis, Evergrande's capital chain was on the verge of rupture, and at the critical moment, "card friends" Zheng Yutong, Liu Luanxiong and other Hong Kong tycoons came to the rescue.
The second time, Evergrande faced a breach of contract due to the "VAM clause", and once "forced to die" to a local government, but finally relied on Suning Zhang Jindong and other "friends" to understand the "VAM clause" to survive. But now Zhang Jindong saved Evergrande, but he could not save his own Suning, which made people sigh. On July 29, Suning Tesco's new board of directors was elected, and Huang Mingduan of the Ali department was elected as the chairman, which in fact announced Zhang Jindong's exit.
However, this time is different:
• The central government is determined to take action on real estate: Although real estate regulation has a long history, in recent years, the central government's determination has become increasingly firm and its attitude has become clearer. The reasons are: 1) housing prices continue to rise, and financial regulators have repeatedly stated that the real estate bubble is a "gray rhinoceros" and has become the primary task to prevent financial risks; 2) real estate has caused widespread social anxiety and has also become the cause of "lying flat"; 3) real estate and education problems can be called the main concerns of young people getting married and having children; 4) high housing prices have inhibited consumption, which in turn has become the main obstacle to achieving the "domestic cycle"; 5) "trillion-level" enterprises such as Evergrande, like super Internet companies such as Ant Financial, are becoming " The new type is big and does not fall".
It can be said that the central government put forward "three red lines" for real estate enterprises, and the heavy fist to rectify the discipline of off-campus training, the actual logic is the same, determination and boldness are also unquestionable (the central government to force!). Behind the extinction of the education unit, I see the hope of the country).
Therefore, in this round of "three red lines" campaign, it is likely that some enterprises will be forced out, which will have the effect of "setting an example". At present, the most likely enterprise is Evergrande.
The huge scale does not mean that Evergrande can really achieve "big and not fall", the reason is: 1) the collapse of the enterprise does not necessarily mean chaos and turmoil, and it can be bankrupted and reorganized in an orderly manner. A comparable case is that Hainan Airlines, once a "trillion-level enterprise", has now entered bankruptcy reorganization. 2) Even if Evergrande goes bankrupt, its real estate projects are still "valuable assets", and it is estimated that there will be no shortage of companies that hope to take over.
04
The lesson of Evergrande
From China's largest real estate enterprise, China's richest man, to today's precarious situation, what lessons has Evergrande brought to The Chinese entrepreneur community?
▐ Don't use inertia to predict the future
The economy has always had cycles and fluctuations, and in the midst of fluctuations and ups and downs, entrepreneurs have summed up their own experiences and countermeasures. These lessons, if they have worked in the past, may fail today because the macro environment is undergoing a substantial shift. In 2018, Vice Premier Liu He proposed, "It is necessary to establish a good behavior constraint, psychological guidance and full-coverage supervision mechanism, so that the whole society understands: doing business is to have capital, borrowing money is to repay, investment is to bear risks, and bad things are to pay a price." "It can be said that these policy orientations have been confirmed in the past few years. If entrepreneurs still cling to the illusions and luck of the past and "game" with the government, they may eventually end up in a sad end.
▐ The government's warnings should be taken seriously
From quantitative change to qualitative change is a gradual process, during which there will be some early warnings, the key is to see whether the entrepreneur is sensitive enough and decisive to act.
Traditional Chinese culture has always emphasized "first salute and then soldiers". "Don't be unpredictable", this Internet celebrity phrase is not only applicable to diplomacy, but also applies to domestic issues:
• Jack Ma's Bund speech rolled over in October 2020. In fact, as early as July 2019, Zhou Xiaochuan publicly warned in a speech, "Some people advocate subversive technology, revolutionary technology, if you oppose him, you are a "counter-revolutionary." Sometimes this is just to sell their own products, sometimes it is to exclude and attack competitors, and when supervision is effectively strengthened, it may also fight a public opinion war. It can be said that this is a "yellow card" warning with a very heavy weight and a very severe tone, but unfortunately, "Teacher Ma" not only turns a blind eye, but also openly counters Zhou Xiaochuan's point of view, and loses the window of historical opportunity for "cliff relegation" (Ma Yun and Zhou Xiaochuan's "air confrontation").
• In the second half of 2017, Wang Jianlin experienced a life-and-death speed, forced to sell domestic and foreign hotels, real estate, cultural tourism projects, broken wrists to survive, and suffered unspeakable. In fact, at the two sessions in March 2017, Zhou Xiaochuan has carried out risk tips and exhortations, "foreign investment, some of which are overheated emotions, investment is blind, and some people are also in a hurry, so foreign investment may grow quite fast in numbers." Some of this is actually inconsistent with the industrial policy requirements of China's foreign investment, such as investing in some sports, entertainment, and clubs, which is not much benefit to China, and at the same time, it has caused some complaints outside. Therefore, we believe that a certain degree of policy guidance is necessary and effective. Similarly, Wang Jianlin did not pay enough attention to it, but instead burst out a sentence of "my own money, I can spend it as much as I want!" A few months later, Wang Jianlin tasted the bitter fruit of "mouth addiction".
At present, the only thing that can save xu jiayin in the water and fire may be Evergrande Automobile, which has not yet seen the car on the market. If such a scene occurs, it will be the first good deed that "Jia Yueting's car-making movement" inadvertently did.