Test Water Project Is Not Real Estate IPO Access Overseas Frequently Shelved

Against the backdrop of macro-economic counter cyclical adjustment, the market speculation that housing enterprises' financing has loosened is not optimistic.

A few days ago, the SFC listed company mergers and acquisitions Review Committee convened the fourteenth working conference in 2020, and rejected the purchase of all shares of Hangzhou Shengyuan Real Estate Development Co., Ltd. (hereinafter referred to as Shengyuan real estate), jointly issued by Ningbo joint stock issue.

This is the fourth of the 23 projects that will be held this year, and it has formed a certain symbolic significance in the market.

It is worth mentioning that, before the market also has some analysts believe that the A share market for the real estate business capital operation and financing action may be relaxed, and some housing enterprises this year has updated its refinancing plan. However, in the joint venture of Ningbo's largest shareholder, the real estate assets have been ruthlessly stopped by regulators. The dream of A share financing recovery of Housing enterprises will also be broken, which will continue to be the long and sustained winter of regulation and control policies.

Against the backdrop of macro-economic counter cyclical adjustment, the market speculation that housing enterprises' financing has loosened is not optimistic. - Gan Jun photo

Whether 6 years long run is denied

In April 22nd, the joint purchase of Shengyuan real estate in Ningbo was sentenced to "death penalty" at the meeting of the reorganization committee of the SFC.

According to the acquisition plan, Ningbo joint intends to issue 269 million assets to acquire the assets held by Rongsheng holding company and related party Sanyuan holding company.

Among them, the shareholding ratio of Rongsheng holdings and three yuan holdings was 60.82% and 39.18% respectively.

Few people noticed that the acquisition of Ningbo's joint venture was a long run of 6 years.

As early as early 2014, Ningbo Union launched a takeover plan for Shengyuan real estate under the Huaxi Securities Financial Adviser. At that time, the purchase target was 50% of Shengyuan real estate and Haibin real estate company.

But after adjustment, the purchase target was changed to 60% of Shengyuan real estate and 51% of the seaside property, but the purchase was not clear.

It was not until April 2018 that Ningbo jointly restarted the takeover plan. The bid to buy the target became the current Shengyuan property.

But after a long period of adjustment, argument and regulatory communication, the plan still met with a veto after 2 years.

According to the acquisition plan, the shareholding ratio of Rongsheng holdings and three yuan holdings to Ningbo joint will be changed to 43.80% and 18.16% after the completion of the acquisition. Since the acquisition did not trigger changes in Ningbo's joint real controllers, the transaction did not constitute a backdoor listing.

For this veto, the SFC gave the reason that "failure to fully explain and disclose this transaction is conducive to improving the quality of listed companies' assets, improving their financial status and enhancing their continued profitability".

But in the industry view, the real reason for the Ningbo joint takeover is whether the target is a real estate enterprise.

As the name suggests, Shengyuan real estate is indeed a real estate company like a fake package.

According to the disclosure, Shengyuan real estate and its holding and share holding companies have many construction projects such as "Xianghu one" three, "Kaiyuan square" four, "silver and Wangfu" and so on. At the same time, they have such items as "Oriental Blue Pavilion" and "Xianghu one" four phase, as well as "Blue King International", "Xianghu one" phase I, "Xianghu one" two, "Sheng Yuan Hui Valley", "Hua Ruiqing Lu" and so on. "East coast" and other projects a large number of listings for sale.

According to the assessment at the end of 2017, its book value is about 428 million yuan, while the estimated value is 1 billion 802 million yuan.

"The main reason is still that the takeover target is Real Estate Company as a restricted industry, and the operation of real estate companies in A shares, such as the initiation, issuance and merger and acquisition, has been subject to more stringent restrictions." A close to Ningbo joint investment bank admitted, "in fact, this project is also more concerned by the market, and some other similar projects also regard it as a wind vane, that is, whether it can pass, to make internal decisions."

Loose financing "broken dreams"

The reason why the Ningbo alliance has attracted much attention stems from the speculation that the market is loosening of real estate financing.

In fact, under the influence of the real estate regulation policy that has been going on for several years, many housing companies in the A share market queuing have to face the interruption of the IPO progress.

But with the deleveraging policy launched in 2018, speculation about whether the A share financing of Housing enterprises is expected to be loose is also constantly emerging.

"Because of the impact of the deleveraging, Sino US trade friction and the impact of the epidemic, the pressure on the macro-economy has increased. There are market speculations about whether there is any possibility of further loosening of real estate financing." A Shanghai securities real estate researcher said, "if the relevant signal can be loosened, it will bring positive benefits to some of the housing companies with higher capital pressure."

In fact, some housing enterprises updated the refinancing plan, which also exacerbated the market's speculation.

For example, in March 12th of this year, Greenland holdings released a revised version of the fourth version of the non-public refinancing scheme, which raised funds to 11 billion yuan, and the starting point for tracing the plan was traced back to 4 years ago.

In twenty-first Century, the economic report reporters interviewed historical bulletins, and found that Greenland holdings first issued a refinancing plan in December 2015 to raise funds of 30 billion 150 million yuan, and revised the plan three times in January 2016, May 2016 and August 2016. This year's amendment to March is undoubtedly a "cheat corpse" after two years.

"At that time, the revised version of Greenland holdings's refinancing announcement came out. Many people believe that there is a sign of loosening in real estate refinancing, whether it is industry or intermediaries, everyone has discussed it." A central enterprise real estate company financing business people said, "because these years in the policy of high pressure regulation, the real estate company's cash flow is really more difficult."

In its view, if the refinancing policy is loosened, the refinancing plan for Greenland holdings in March will also become meaningless.

"At that time, both the investment bank and the real estate company hoped that the policy could be loosened, otherwise the large green companies would not do useless work." The above financing business people said.

However, in the view of many investment bankers, the joint purchase of Ningbo is not meant to mean that many planned housing enterprises financing projects are not optimistic.

"Ningbo joint equity payment does not involve matching fund-raising, that is to say, it has not been refinancing, it has been denied, and refinancing is even more." An investment bank who is concerned about the joint acquisition of Ningbo pointed out that "at present, the only possible operation of real estate projects is estimated to be only cash acquisition and shareholder donation, but there are many obstacles to the acquisition of cash, which are easy to raise questions, while shareholder donation is meaningless."

"The Ningbo joint case has certain precedent effects, at least indicating that in the long run, the SFC will not deregulation of the financing of real estate enterprises in any way." An investment bank official close to regulators said.

Shelved housing financing

Whether Ningbo's alliance is not an isolated case is not.

As early as April 13th, the Jinhui group Limited by Share Ltd (the Jinhui group) formally withdrew to the first application and terminated the examination in the IPO queuing process.

And the failure of Ningbo united and Jinhui group may also make many housing companies waiting for IPO to feel disappointed.

Reporters statistics Wind data found that as of April 27th, there are still 3 companies in the IPO queuing A shares, namely, the special service, Fuli real estate and Wanda business.

Among them, the latest status of special service and Fuli real estate is feedback, and Wanda business is to stop censorship.

From time to time, most of the latest announcements of the above companies stopped in 2019 and earlier, for example, the latest announcement time of Fuli real estate was at the end of 2017.

According to the investment bankers, under the policy of real estate control, the IPO of the above queuing companies is still outstanding.

"In fact, the real estate policy restriction is mainly the development of residential real estate, but there is no explicit requirement for business and property. However, with the demand of housing and housing, some commercial, property and residential projects have linkage relationship with real estate companies, which leads to difficulties in listing and IPO." An investment bank official close to regulators said.

In fact, like the Jinhui group, the housing companies who chose to give up voluntarily are also few.

Statistics show that a total of 7 countries, including Biguiyuan, Jinhui group, and first home buyers, announced the termination of the review, and the listing of H-share market curve has become the choice of some housing companies. For example, Jinhui group has considered turning to IPO of Hong Kong stock, and it is reported that the Hong Kong stock market is expected to be listed as soon as possible in the year.

In fact, H-share is indeed a hot spot for many mainland housing companies to list. For example, the famous housing companies such as Rong Chuang, Zhonghai, Huarun land, Fuli, Sun Hung Kai and Lvcheng are all listed real estate stocks in Hongkong.

But it is worth mentioning that in recent years, many real estate companies are still facing a fate of losing their fortunes through the Hong Kong stock market. For example, in April 17th of this year, the prospectus of the three Xun group of the housing company failed, and in April 22nd, the prospectus of Hong Kong real estate was also invalid.

Whether Hong Kong stock market can be listed on the Hong Kong stock market has become a dynamic trend that some housing companies are paying close attention to.

"First of all, overseas listing needs to be reviewed by the international department. After approval, it can be listed overseas. In addition, the issuer also needs to meet the relevant institutional requirements of overseas exchanges, so that it will be able to achieve success after the roadshow." The above-mentioned central enterprises are real estate financing personages, "but considering the current policy tendency and the liquidity problems faced by housing companies, listing financing is still not an easy task."

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