Housing Enterprises Huge Financing Frequent: Industry Mergers And Acquisitions Acceleration?

In March 16th, the Shanghai Stock Exchange disclosed that 3900.HK, or "green city", was intended to issue more than 17 billion yuan of corporate bonds to professional investors. The fund-raising plan has been accepted. This is the liquidity wide Panasonic, housing enterprises billions of financing phenomenon. In addition to Greentown, in January of this year, 3333.HK issued a total debt of 46 billion 120 million yuan.

With the green city as the representative of the central enterprises, the background Housing enterprises have received "tens of billions of" financing. The leading brand Housing enterprises represented by Hengda, Vanke (000002.SZ) and 01918.HK have also been strongly supported by the capital market. In March 11th, Vanke A announced that in 2020, the total value of public bonds issued to qualifying investors was no more than 9 billion yuan (including 9 billion yuan) corporate bonds (phase I), and the interest rate of domestic and foreign housing enterprises was lower at 2.60% interest rate this year. The financing rate of private enterprises has also set a new low. In January 8th, the financial group announced the issuance of 540 million US dollar senior notes due in 2025, with an interest rate of 6.5%. In March 13th, the securities and Futures Commission issued a document saying that it would resume its application for the issuance of corporate bonds.

The new round of money tide means investment expansion and upgrading. Green city, a Chinese insider told reporters that the company was recently watching, "anxious to spend money". However, not every housing company is "lucky". Due to the radical expansion of the past 2-3 years, even if part of the financing is obtained, it is difficult to change the reality that the enterprise is still in the "highly leveraged" state.

In this regard, Zhang Hongwei, chief strategist of the same Research Institute, predicts that the current market adjustment period is the best "window period" for mergers and acquisitions. The market structure will also accelerate the change due to the merger and acquisition, and the market concentration will also rapidly increase. The housing enterprises represented by central enterprises and leading housing companies represented by Vanke and financial innovation will dominate the current market trend.

Industry mergers and acquisitions signal

According to a report of the same policy research institute, according to the central bank's fixed tone for housing enterprises financing in 2020, this year should be carried out according to the principle of "credit concentration degree", the so-called "credit concentration degree" principle, that is, the central state-owned enterprises represented by Greentown and the leading brand Housing enterprises represented by Vanke and financial innovation. These housing enterprises can get more capital market support. For example, in March 17th, the 3 medium-term notes of the Guangzhou Yuexiu group Limited by Share Ltd were accepted and approved by the Dealer Association, with a total value of 8 billion 800 million yuan.

Generally speaking, the market stage of getting "ten billion scale" financing is often a relatively loose capital stage, but the situation has changed. A financial industry analyst pointed out that unlike the real estate market in 2017, the rise of the 10 billion financing tide is different. The housing market faced by the housing market this year is close to besieged.

Zhang Hongwei pointed out that the financing costs and scale advantages of the central enterprises and state-owned enterprises represented by the green city and the leading brands such as Vanke and financial innovation will help them become the protagonists of the acquisition. Obviously, the acquirer is outside the "credit concentration degree" principle, and the high leverage "naked swimming" Housing enterprises.

A typical case happened recently is that in January 13, 2020, Shimao announced that it would carry out comprehensive strategic cooperation with Fusheng group and jointly set up a platform company of Shimao Fusheng. Today, the specific "cooperation plan" has not yet been officially announced. Shimao starts with the management framework for the reform of Fusheng group. In March 18th, according to the industrial and commercial information of Kai Xin Bao, the legal representative of Fujian Fu Sheng was changed from Pan Weiming to Xu Younong, and Xu young peasant joined Shimao in 2001. At the same time, a series of changes have taken place in the senior management of Fujian Fu Sheng and the senior management of Fujian Construction Group Co., Ltd., a company under the construction of Fu Sheng, six. In the end, the former management of Fu Sheng group left all other than Pan Jungang and Wu Jihong transferred to Shimao Fusheng. Shimao's remolding of Fu Sheng group is still in progress.

A listed housing company said that from the point of view of mergers and acquisitions, private housing enterprises must continue to grow bigger and bigger. They must also embrace or "big fish eat big fish", or even "snake swallow elephants". This is another kind of merger and acquisition type under the current market environment.

Radical today

The industry also pointed out that the increasingly financial real estate industry, the capital market is more concerned about housing enterprises profit growth, financing scale and debt structure and other indicators, rather than scale growth and strategic layout. On the contrary, in 2019, enterprises with high concern in the real estate M & a market, such as Shimao, began throwing the signals of M & A in the industry since last year. Precisely because of their adjustment period in 2017 -2018, they have made profit growth and debt structure better than those of the same industry.

In the first three quarters of 2019, Shimao gained a large increase in sales volume and sales area, and returned to the top ten of the industry. In the first three quarters of the real estate industry, the overall growth rate of net profit was 12.76%, and the net profit growth rate of the housing enterprises of the central enterprises and state-owned enterprises far exceeded that of the private enterprises. The net profit growth rate of 600048.SH in the first three quarters was 34.08%, while the net profit growth rate of Vanke in the first three quarters was 30.43%. In contrast, the growth rate of China's net profit in Lucheng is not high, but the company began to increase sales in the second half of 2019, and some of the sales items in 2018 were delivered at the end of 2019. Judging from the situation of sales return, the sales contract of green city in China for 1-12 months in 2019 was about 201 billion 800 million yuan, and officially entered the camp of 200 billion housing enterprises.

In connection with the recent move taken by Greentown China and the two 200 billion targets thrown out by the chairman of the board of directors of the board of directors of Zhang Yadong during the media interview in mid 2019, green city China has already stepped up its pace of expansion. Earlier, Zhang Yadong said, "in the second half of 2019, Greentown China will increase its participation in the auction, acquisition and acquisition, and strive to achieve an annual value of 200 billion yuan." (2019) the total sales volume in the second half of this year is about 10 million 600 thousand square meters, and the overall sales value is about 226 billion 300 million yuan, and strive to achieve the sales target of 200 billion yuan for the whole year. At present, the sales target of Greentown China 200 billion has been reached, and whether the 200 billion value reserve will be realized remains to be announced in the 2019 annual report.

In fact, the real estate market continues to have mergers and acquisitions cases surfaced. This year, in addition to the fact that Fu Sheng group has been acquired, the 4 letter of the suspension group of its trust group also fell into a takeover rumor. Xinxin group and Longhu and Jinke were among the top three in Chongqing. Recently, the crisis broke out in succession. The trust of its subsidiary is far reaching 4 billion 700 million yuan. Some bonds are facing Default risk. In the name of the company, there are 6 bonds remaining, with a total scale of 4 billion 700 million yuan, of which 1 billion 400 million yuan bonds will expire within one year. At present, the credit rating and credit rating are both "AA".

By the end of 6 in 2019, the company's total assets amounted to 82 billion 142 million yuan, with a total liabilities of 64 billion 928 million yuan, including 34 billion 719 million yuan in current liabilities, 4 billion 618 million yuan in short debts, 4 billion 317 million yuan in notes payable and accounts receivable, and 6 billion 358 million in other payables. By the end of 6 2019, the company had only 4 billion 377 million yuan in monetary capital and could not cover short debt repayment.

The industry pointed out that in the past 2-3 years, the aggressive expansion of housing prices, even in the financial easing stage to get financing, it is difficult to change the reality of enterprises are still in the "high leverage" state of operation.

Just as Fu Sheng group used high leverage mode to expand rapidly in 2017, the sales bottleneck in 2019 led to the breakup of capital chain. After entering 2020, the mode of high-speed operation stopped abruptly.

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