Capital Reflux, Debt Repayment, Can The Capital Chain Of Affordable Housing Enterprises Carry The Epidemic?

In February 28th, Fuli real estate announced that it would issue a 400 million dollar Senior Note in 2024 with an interest rate of 8.625%. The funds raised will be used for medium and long term debts that will be refinancing within one year.

This action seems to be no surprise, but it actually reflects all the characteristics of the recent financing behavior of the housing enterprises: the dollar debt, the cost is not low, and is used to borrow new and old.

At the beginning of the year, the outbreak of the new crown pneumonia outbreak and rapid spread, affected by this, the sales of real estate enterprises have not been fully recovered so far, and sales cash flow has been significantly damaged. At the same time, the domestic financing environment is still harsh. In February 24th, the CIRC stressed that when banks lend money, they should consider whether "illegal flow to real estate".

Affected by this, housing companies start online sales, and offer discounts, while actively financing outside the country to make up for the shortfall of capital chain under the impact of the epidemic.

Institutional statistics show that in 2020, the credit debt scale of Housing enterprises will exceed 700 billion yuan in the year, which has risen sharply compared with 2019. Under the background of the impact of the epidemic and the pressure of debt, can the housing enterprises' self-help behavior ensure that they can tide over the difficulties?

Financing growth needs to reach 26.4%

According to incomplete statistics of Zhongyuan Real Estate Research Center, since February, more than 40 cities across the country have introduced real estate support policies to ease financial pressure on enterprises. But in the financing side, the policy has no obvious signs of loosening.

The central bank's "fourth quarter monetary policy report", released in February 19th, once again stressed the importance of "housing instead of speculation", and reiterated that "real estate will not be used as a short-term stimulus to the economy". In February 24th, the relevant person in charge of the China Banking Regulatory Commission said at a press conference that it is necessary to ensure that bank loans are not really used for production and operation activities, rather than illegal flow to real estate and violation of capital flows to the capital market.

This position has laid a basic keynote, that is, the market regulation policy will not be significantly relaxed. Central Plains real estate chief analyst Zhang Dawei believes that China's economic growth has entered the "shift period", but in the development mode, to relax the property market regulation to stimulate the real estate market, and then stimulate economic growth will not happen again.

2 since the middle of last month, housing prices have begun to resume work, but according to the twenty-first Century economic report, the current posts are mainly backstage support posts, and many companies have implemented the rotation system. In addition, the sales side has also returned to work on a large scale, but many housing companies surveyed have shown that sales offices are still open.

Offline sales are not open, capital flow is blocked, and financing scale is decreasing compared with the same period in previous years. According to data from a number of institutions, the scale of overseas financing of Housing enterprises rose sharply in January of this year due to limited domestic financing. But by February, overseas financing had dropped sharply. The total financing scale of Housing enterprises at the beginning of this year is obviously lower than that of the same period last year.

One billion think tank pointed out that the total credit debt that housing enterprises will expire in 2020 will be 746 billion 860 million yuan. Without considering the large amount of capital needed to operate, the growth rate of financing will reach 26.4% this year. "Otherwise, the private capital used by the housing enterprises to be operated will be squeezed out partly for debt repayment, thus further restricting the investment, construction and other actions of Housing enterprises."

Many housing companies deposit "refinancing risk"

In fact, due to the uncertainty brought by the epidemic, the daily operation of some housing enterprises has been affected. In twenty-first Century, the economic report learned that after the Spring Festival, a large housing company had made several coping plans against the impact of the epidemic. One of the measures was to suspend recruitment in the first half of this year. Another housing company temporarily suspended the salary increase plan for senior managers.

Zhang Dawei believes that, in general, the impact of private enterprises is greater than that of state-owned enterprises, and the impact of small and medium-sized Housing enterprises is greater than that of large housing enterprises. This effect is reflected in the land market and the financing side.

Then, what is the impact of the epidemic on the credit rating and capital chain of Housing enterprises?

Recently, Fitch released a research report, pointing out that the new crown virus epidemic had different effects on the business of 166 Chinese enterprises evaluated, and the refinancing risk of 6% enterprises increased. Among them, Yida China (CCC), Yide International (B-/ stability), new lake Zhong Bao (B-/ stability), Guo Rui property (B-/ stability) four housing enterprises were named "high risk of refinancing".

Among them, Yida China has the highest risk. According to the announcement, China's 11 billion 580 million yuan debt will expire before June 2020. It is difficult to cover debt in the short term according to its current capital position. Recently, Yida China has postponed the cash dividend payment of 8 cents per share for the year ended December 31, 2017, and postponed repayment of 288 million 500 thousand yuan related loans from the Chinese government, and another 4 billion 579 million yuan loan agreement has the risk of triggering.

Orient Jincheng international credit assessment company expects the new crown pneumonia epidemic will make the real estate industry in the first quarter sales have been greatly hit, Hubei and neighboring provinces and cities greater impact. Part of the short debt higher housing fund pressure, liquidity pressure increased. But in the whole year, the overall impact is limited.

The agency pointed out that in the benchmark situation (the epidemic ended in April), the overall credit risk of Housing enterprises will remain stable in 2020. However, the impact of different types of Housing enterprises will be differentiated. Under the benchmark situation, the epidemic has a greater impact on the high week transformation of Biguiyuan and the three real estate projects of the China Construction Bank, Fuxing Hui and Wuhan real estate group, and so on. The housing enterprises in Hubei province have a greater impact on the housing prices in the province.

At the same time, resource-based Housing enterprises to a certain extent can seize the good opportunities of land end and merger and acquisition side.

Billion Han think tank said that in addition to reducing the amount of running and timely clearance of inventory, funds are not very abundant housing companies need to reduce land investment spending, to ensure the safety of funds. In addition, in the industry downturn, tug of heating will be a trend, cooperation and development is also a good choice to tide over the difficulties.

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