What does Xuhui's suspension mean?

The suspension of Xuhui Group means that the private demonstration housing enterprises that once developed in a balanced way are now developing difficultly.

This is probably related to debt financing. Xuhui's eager pursuit of scale has brought two relatively intractable problems.

First, a large number of non-consolidated cooperation projects, the corresponding debts are not included in the financial report, but only exist in the form of equity investment in related joint ventures, which contains risk exposure;

In addition, the huge minority shareholders' rights and interests (accounting for 60%) also "reduced" the company's leverage ratio to a great extent, making the net debt ratio of 100 billion bonds only 78.5%.

Secondly, the main resources are invested in the high turnover development business of real estate, ignoring the expansion of diversified business and cash flow, and lacking the depth of business strategy. At present, more than 90% of Xuhui's income comes from property development, which is significantly higher than Longhu and China Resources Land.

This makes Xuhui's suspension of trading basically a matter of course.