The Industry Ecological Changes Behind the IPO of Small Housing Enterprises Queued in Hong Kong

The Industry Ecological Changes Behind the IPO of Small Housing Enterprises Queued in Hong Kong

The internal motivation of these small housing enterprises with sales scale of10 billion is to broaden financing channels and maintain capital chain to ensure their survival. In addition, after the success of IPO, it is very helpful for enterprises to continue to use financing tools such as bonds to maintain liquidity. After listing, they can improve their international ratings and issue overseas bonds.

On May 22nd, the Third Session of the 13th National People's Congress was officially opened. This year's government work report reiterated that houses are for living, not for speculation.

The tone of real estate regulation remains unchanged. In the environment of "staying but not speculating", domestic financing channels have narrowed, financing costs have risen, and the financial problems faced by small housing enterprises have been amplified. IPO in Hong Kong has become one of the preferred financing methods for these housing enterprises.

According to incomplete statistics, since 20 18, there have been 13 successful listed real estate enterprises, among which, the number of successful listed real estate enterprises in 20 18 and 20 19 is the same, with six enterprises listed successfully in the first four months of 2020. Up to now, 1 1 housing enterprises have submitted prospectuses in HKEx, including Hellenborg, Aoshan Holdings and Hui Jin Holdings. There are also eight property companies owned by real estate companies waiting for IPO on the Hong Kong Stock Exchange.

In recent years, the debt ratio of small housing enterprises has been rising, and the trend of lack of money and land is becoming more and more obvious. An insider pointed out that the living conditions of small-scale housing enterprises reflect the increasing financing costs of small-scale enterprises and the declining overall profits of the industry. It is actually difficult to survive without large-scale development. In the past year, many small housing enterprises failed to submit the form for the first time because of high debt and short-term debt repayment pressure. The internal motivation of these small housing enterprises with sales scale of10 billion is to broaden financing channels and maintain capital chain to ensure their survival. In addition, after the success of IPO, it is very helpful for enterprises to continue to use financing tools such as bonds to maintain liquidity. After listing, they can improve their international ratings and issue overseas bonds.

Judging from the recent upsurge of land acquisition in the land market, from the viewpoints of Zhang Hongwei, chief analyst of Tongce Consulting Institute, Lu Wenxi, an analyst of Shanghai Zhongyuan Market, etc., the enthusiasm of small housing enterprises for land acquisition has greatly increased, while that of large housing enterprises has slowed down. In this context, the financial pressure of small housing enterprises is more likely to be amplified.

In addition, some real estate enterprises told 2 1 Century Business Herald that the number of pre-sale certificates obtained by real estate enterprises will increase in the second half of the year, which will increase the market supply; On the contrary, there is no effective way to release market pressure. As a result, the inventory pressure of housing enterprises will naturally rise this year.

I hope to sprint IPO to release pressure.

When the industry enters 2020, the market is changing due to the epidemic, and the living space of small housing enterprises is squeezed, and the listing has just begun.

By the end of May 2020, HKEx had about 65,438+065,438+0 real estate companies waiting for IPO, including Hellenborg, Aoshan Holdings, Wanchuang International, Sanyun Holdings, Dragonair Real Estate, Dynasty Real Estate, Pengrun Holdings, Hui Jin Holdings, Shang Kun Real Estate, Territorial Holdings and Land Real Estate. It is also reported that Anhui Wen Yi Real Estate will be listed in Hong Kong.

These include Sanyun Group, Hellenborg, Aoshan Holdings, Wanchuang International and Dragonair Real Estate. I was rejected when I submitted the prospectus for the first time, and now I will start the second time.

Zhang Hongwei pointed out that Hong Kong's listing has several very important core indicators, such as the profitability and debt ratio of enterprises in the past three years, and the profitability of the main business should meet the minimum profitability requirements. If the core indicators fail to meet the requirements, they may be returned for re-declaration, and enterprises need to optimize land and liabilities when re-declaring.

As can be seen from the information disclosed in the prospectus, these small-scale housing enterprises have a characteristic, that is, high debts, obvious shortcomings in land reserve, and great short-term financial pressure.

Take Sanyun Group, which started in Anhui, as an example. The company declared that "the sales scale in 20 19 will reach 30 billion, and the five-year target will reach 1000 billion", and hired the president Wang at the end of 20 19. However, according to the statistics of a third-party platform, the sales volume of Sanyu in 20 19 was lower than that in 20 18/0/0 billion.

According to the prospectus, in the past three years, the liabilities of Sanyun have increased significantly: from 229 million yuan in 20 16 to 142 million yuan at the end of June 20 19. In addition, the cash flow from three-year continuous operation is negative, and the financing cost has been at a high level of 10% for many years. According to informed sources, trust loans account for a high proportion in trigeminal financing.

Another example is Lushan Holdings, whose initial public disclosure prospectus has a debt ratio of over 800%. Dragonair Real Estate, which failed in its IPO for the first time, also has the same high debt problem: in 20 17, 20 18 and 20 19 years, and as of March 3, 2020, the asset-liability ratio of Dragonair Real Estate was 98.8% and122, respectively. The total loans were 3180,000 yuan, 856 million yuan, 2.853 billion yuan and 565,438+760,000 yuan respectively, and the total loans increased by more than 16 times in more than three years.

According to the disclosure, the interest rate of real estate financing on the spot rose from 6.59% in 20 17 to 8.37% in 20 19. By the end of March this year, the total interest-bearing liabilities in this field due within one year were 4.287 billion yuan, while the balance of non-standard financing involving outstanding trusts was nearly 2.4 billion yuan, accounting for 18.5% of the total loans in the same period, and the annual interest rate was at least 10%.

The asset-liability ratio of the above-mentioned small housing enterprises waiting for the second IPO is much higher than the industry average asset-liability ratio. In order to solve the short-term liquidity risk, small scale has also become the main reason why Hong Kong stocks are not optimistic. The land reserves of Dragonair Real Estate and Sanyun Group are both less than 5 million square meters, and there are insufficient saleable resources in the future. Especially Sanyu, 90% of the soil reserves are concentrated in Anhui, and most of them are third-and fourth-tier cities. According to the data of Yiju Research Institute, the inventory of 64 third-and fourth-tier cities has entered a growth cycle. Up to now, the inventory of third-and fourth-tier cities has increased by 1.6% month-on-month and by 1. 1% year-on-year. For housing enterprises in third-and fourth-tier cities with heavy positions, it is difficult to expand the scale and improve profitability. In recent years, due to the continuous impact of real estate control policies, housing prices in third-and fourth-tier cities have basically stagnated, and it may be difficult for Aoshan Holdings to increase its gross profit margin in the short term.

According to the analysis of the above-mentioned insiders, if the listing of real estate enterprises in the past was to find money, find cheaper money to pay off debts, borrow new ones and replace expensive ones, then it is most important for small housing enterprises to increase their liquidity after listing.

"As the operating cash flow is negative, we may need to obtain enough additional financing to meet the financing needs, support the operation and expand the company. If sufficient operating cash flow cannot be generated, or sufficient external funds cannot be obtained to finance operations, the liquidity and financial status of the company may be significantly adversely affected. " This passage was disclosed in the listing prospectus of one of the small housing enterprises. This shows that the liquidity crisis of small housing enterprises is enlarging.

Affected by the epidemic this year, most housing enterprises have poor sales returns in the first quarter, and many people in the industry have expressed concern to reporters that this year's inventory increase and sales targets cannot be completed. If the latest wave of land acquisition is to make up for the performance during the year, then this round of land acquisition by small housing enterprises is even more dangerous.

The chemical removal rate is low and the inventory is high.

A research report by Han Yizhiku pointed out that after the epidemic in 2020, the domestic financing environment has a marginal improvement trend, and housing enterprises with high credit ratings are more likely to seize opportunities. Under such a financing background, it is not difficult to understand that small housing enterprises are eager to go public. Only listing has the opportunity to upgrade the rating, thus financing expansion.

Han Yizhiku combed the credit ratings of domestic housing enterprises and found that domestic credit rating agencies generally rated housing enterprises higher. Among the 43 housing enterprises, 77% have AAA credit rating, 19% have AA+ credit rating, and only 1 has AA and BB credit rating respectively. Judging from the credit ratings of domestic housing enterprises, both head housing enterprises and relatively small-scale housing enterprises may get the highest domestic credit rating of AAA, indicating that domestic rating agencies are not "scale-only" when rating housing enterprises, and housing enterprises with no dominant scale can also be recognized by rating agencies by improving their financial situation and sound investment strategies.

However, from the distribution of AAA credit rating in each echelon, among the TOP 10 and top1-top30 housing enterprises, the proportion of housing enterprises with AAA credit rating is close to 90%, while among the TOP33-TOP83 housing enterprises, the proportion of housing enterprises with AAA credit rating is relatively low, accounting for 56%. At the same time, housing enterprises with low credit ratings such as AA+, AA and BB are mostly distributed in this echelon, indicating that large housing enterprises are generally more recognized by rating agencies.

If we want to do it on a large scale, we need to keep taking more land.

Recently, Sanyun Group and Dragonair Real Estate both appeared at the local auction site. According to the prospectus submitted by Sanyun for the second time, at the end of 65,438+10 in 2020, Sanyun Holdings had 36 projects with a total land reserve of 3,964,300 square meters, with Anhui, Jiangsu and Shandong accounting for 89%, 4.7% and 5.5% respectively. Anhui's land reserve decreased slightly, indicating that the company has carried out another round of land reserve since the last prospectus was submitted.

Aoshan is a typical housing enterprise with little soil storage and uneven distribution. 60% of Aoshan's soil reserves are concentrated in Wuhan. As of March 3 1 2065438, the company has 25 projects in Hubei, Anhui, Sichuan, Chongqing and Zhejiang, accounting for an estimated total construction area of 3.4 million square meters, including development properties with a planned total area of about 2 million square meters, with a planned total area of about 16544.

In this wave of small housing enterprises listed in Hong Kong, the territory group is one of the best. As of February, 2020, the Territory Group has a territory reserve of over130,000 square meters, but the high financing cost and debt of the Territory Group have also become an important reason for its urgent listing. From 20 17 to 20 19, the real interest rate of territorial financing increased year by year, which were 6.4%, 8.8% and 9.9% respectively. The current ratio shows a downward trend, which is 1.3 times, 1.3 times and 1.2 times respectively. The ratios of net assets to liabilities are 0.6 times, 1. 1 times and 1.4 times respectively.

In fact, not only small housing enterprises, but also most housing enterprises have poor performance in the first half of this year. A related person from the top 20 real estate enterprises told reporters that in order to increase market supply, occupy market share and expand sales coverage, real estate enterprises had to take land at this node to ensure the launch of new products before the end of the year. However, de-chemicalization is very important. If the decontamination is not good, the inventory will increase again this year, which will bring financial pressure to housing enterprises, and the performance in the next year or two will be worrying.

Lu Wenxi pointed out that in the recent wave of land auctions by housing enterprises, the pace of land acquisition by a number of leading housing enterprises such as Evergrande and Country Garden has obviously slowed down, while small and medium-sized housing enterprises are actively taking land. Old renovation projects have been released one after another. For example, in May, Ruian Real Estate recently won two homesteads in Qingpu District of Shanghai for 65.438+66.6 million yuan. Vanke and China Construction Consortium took land in Baoshan, and the plots involved in these two land transfers were all old renovation projects that Ryan and Vanke had participated in before.

Yan Yuejin, research director of the think tank center of Yiju Research Institute, pointed out that from the perspective of urban inventory data, it also objectively shows that short-term pressure has increased. On the one hand, the cooling of the housing sales market has affected the pace of destocking. On the other hand, the pre-sale control in various places has decreased, and the scale of real estate supply has increased significantly. Therefore, from the actual situation, this will lead to an increase in inventory in various cities. As far as urban classification is concerned, the inventory of first-tier cities and second-tier cities is rising, which is a risk that needs attention. For housing enterprises with inventory in first-and second-tier cities, if they can take the initiative to go to inventory, it will also help to improve the performance of housing enterprises and reduce inventory risks.

Taking Zhengzhou market as an example, under the influence of the epidemic, the turnover of Zhengzhou market declined, the digestion cycle of commercial housing was obviously prolonged, and the inventory in the early stage was overstocked. The supply of new houses in Zhengzhou was less during the epidemic. However, looking back on the market in the past one or two years, from August 2065438 to 2009, Zhengzhou basically showed a state of oversupply, so there was more inventory, and the new housing market was mainly in a state of digesting the previous inventory. The digestive cycle jumped to a high level of more than 2 1 month. A soil auction in May showed that the interest of foreign real estate enterprises in taking residential land in Zhengzhou was fading. Among the four plots sold, only Evergrande, a foreign real estate enterprise, took a commercial plot.