Judging from the data of the 2022 semi-annual report disclosed by real estate enterprises, there are only a handful of enterprises with positive growth in net revenue, and the sharp decline in profits has become the norm in the industry. According to the statistics of the Securities Times reporter, among the 194 A-share and Hong Kong-share housing enterprises that have published semi-annual reports, the net profit decreased by 1 house, accounting for 73%. In addition, the financial reports of Evergrande, Sunac and other 19 housing enterprises have not yet been released.
From the sales situation, in the first eight months of this year, the contract sales amount and area of most housing enterprises have dropped significantly. Evergrande's contracted sales decreased by 97% from June to June, Shimao, Sunac and Yuzhou Group all decreased by more than 60% from June to August, and Vanke, Country Garden and Gemdale (11.231.72%, consulting unit) all decreased by more than 60%. 48666.86866866666
The poor withdrawal of funds and the tightening of financing environment have led to the rise of credit risk in the real estate industry, including the redemption crisis of "wealth management products", bond extension, deferred interest payment, substantial breach of contract and other forms. As of September 19, the default scale of bond balance of real estate bonds, including extension, reached 134 billion yuan, involving 30 bond issuers.
Huayang (pseudonym), manager of the risk management department of a brokerage firm, told the Securities Times reporter: "Now real estate bonds are basically not issued. Our company clearly stipulated in March this year that it is not allowed to buy real estate bonds, whether it is central enterprises, state-owned enterprises or private enterprises. And all the real estate debts held before. "
Housing enterprises are caught in a negative cycle of "downward sales-tight funds-blocked financing-weakened expectations of buyers-further downward sales".
In order to break the negative cycle and improve credit, most housing enterprises try their best to convert debt into equity in the face of debt. On the one hand, they increase sales, dispose of assets and take the initiative to withdraw funds; On the other hand, by communicating with creditors in advance to discuss the extension, we can avoid triggering cross-default clauses and exchange time for capital turnover space. In addition, there are measures to increase trust by introducing state-owned enterprises and central enterprises, and get financial support.
Liquidity dilemma of housing enterprises
The sales volume of commercial housing is a key indicator reflecting the liquidity of the real estate market.
On September 16, the National Bureau of Statistics released the data of the real estate industry from June to August 2022. In August alone, the national commercial housing sales area was 97120,000 square meters, and the sales amount was 1.0 1 trillion yuan, down by 23% and 20% respectively. China's commercial housing sales performance is still at a historically low level.
From the perspective of sales return (personal mortgage deposit and advance payment), the sales return in the first eight months of 2022 was 4.9 trillion yuan, down 32.5% year-on-year; In August alone, the sales return was 621800 million yuan, down 23.6% year-on-year.
Sales data is more intuitive in specific housing enterprises. According to the statistics of the Securities Times reporter, the sales data of 20 well-known real estate enterprises from June to August showed that the contracted sales of 20 real estate enterprises totaled 2.04 trillion yuan, accounting for 4 1.6% of the whole industry in the previous August. The highest sales amount was Poly Development (17.69 0.80%, diagnosis unit), reaching 28 17 billion yuan, down 24.72% year-on-year; Followed by Vanke, the sales amount was 279.9 billion yuan, a year-on-year decrease of 36.8%. The contracted sales amount decreased by more than 60% year-on-year, including six real estate enterprises such as Evergrande, World Trade Shares, Sunac, Yuzhou Group and R&F Real Estate. There are 10 companies whose sales contract amount decreased by 30%~55% year-on-year, including leading housing enterprises such as Vanke, China Jinmao and OCT A(4.84 -2.42%, consulting unit).
Poor sales directly affect the semi-annual data of housing enterprises. Judging from the published semi-annual report of 2022, the number of real estate enterprises whose revenue declined year-on-year accounted for 60%, and the proportion of net profit decreased by 73%. Losses have almost become the norm in the industry.
Among them, R&F Real Estate lost 6.92 billion yuan in the first half of this year, followed by Jianye Real Estate with a loss of 5.6 billion yuan. Blu-ray Development (1.35 -2.88%, Diagnostic Unit), which also suffered a staggering loss, suffered another loss of nearly 5 billion yuan in the first half of this year after losing more than 10 billion yuan in 2002/kloc-0. At the same time, the net profit of Taihe, Sunshine City (2.03 -3.79%) and Rong Sheng Development (2.45 -4.67%) also lost 2-4 billion yuan.
On the one hand, housing enterprises have suffered huge losses, on the other hand, with the tightening of the pre-sale fund supervision policy. Housing enterprises have stranded a lot of funds at the project company level and cannot return to the parent company level.
An executive of a large real estate enterprise in Shenzhen told the Securities Times reporter: "Now the main channel of money is to sell assets except sales, but most of the money sold back is in the supervision account, and the proportion that can be used is very small, maybe less than 20%. It is difficult for the group to get money from the project, which makes it difficult for the group to have liquidity. "
According to the financial situation of 765,438+0 key listed real estate enterprises, the cash holdings of key sample listed real estate enterprises in the first half of this year decreased by 65,438+05% compared with the beginning of this year, and the proportion of restricted cash scale still increased. At the same time, the total interest-bearing debt decreased slightly, but the short-term interest-bearing debt increased by 1.39%. In this context, the ratio of cash to short-term debt under the condition of unlimited sales has dropped to 1. 1. If the pre-sale supervision funds are excluded, the ratio will be even lower, and the short-term security boundary has attracted attention.
Another key indicator also reflects the current tight liquidity of housing enterprises-net cash flow of financing.
Affected by the trend of industry deleveraging, the financing scale of real estate enterprises has been declining, and the net inflow of cash flow from financing has dropped from about 700 billion yuan in 20 17 and 20 18 to about 340 billion yuan in 2019 to the first half of 2020, with a decrease rate of 5 1%. Since the second half of 20021,corporate financing constraints have increased, with a net outflow of 397.8 billion yuan from cash flow from financing in the second half of the year, which eventually led to a net outflow of 202 1189.3 billion yuan from cash flow from financing. In the first half of 2022, the net cash flow from financing of housing enterprises flowed out again, reaching 654.38+043.9 billion yuan. If all housing enterprises in Hong Kong stocks disclose semi-annual reports, this figure will rise.
The decline in sales and the net outflow of financing dragged down the real estate industry, and the liquidity of some housing enterprises was in trouble, which led to the occurrence of credit risk events one after another.
Debt defaults are frequent, especially in dollars.
In 20021year, the amount of liquidated damages for real estate bonds reached 73.5 billion yuan, involving 67 bonds, and the scale of default reached the peak in recent years. Since 2022, the credit of the real estate industry has not improved significantly.
According to the statistics of the Securities Times reporter, as of September 2 1 day, there were 168 real estate bonds in default or extension, of which 97 were in substantial default, with the default bonds reaching 56.324 billion yuan, 7 1 bond extension scale1267.50000000/kl.
Yang Yan, a bond investor, told reporters: "Let's just say that the bond extension is actually a breach of contract. For example, the dollar debt of Yuzhou Real Estate I bought myself expired in March this year, but it has never been paid back. The developer talked to us about the extension, because it didn't work out and it has been dragging on. At present, the real estate bonds in the market are postponed. In the final analysis, there is no money to pay back. "
If the extension scale is included, the default scale of real estate bonds has actually reached 654.38+083 billion yuan this year, a record high. These bonds involve 54 issuers, all of which are private enterprises, covering most well-known real estate enterprises except Vanke and Country Garden, such as Sunac, Zheng Rong Real Estate, COFCO Holdings, Caesar, R&F Real Estate, Shimao Group, Fantasia and Yuzhou.
It is worth mentioning that 65 of the 97 real estate bonds in substantial default are US dollar bonds, accounting for 67%, and the default scale is 3 1.03 billion yuan, accounting for 55%.
According to the data of the Central Reference Institute, the balance of real estate corporate bonds in the second half of this year was 492.07 billion yuan, of which overseas bonds accounted for 35.4%; As of September 2 1 day, the balance of bonds due within one year was 972.37 billion yuan, of which overseas bonds accounted for 38%.
There has been a wave of default in this industry, which has aroused the anxiety of fixed-income investors. "One by one, all the US dollar real estate bonds in our hands are overdue. At present, we no longer care about the rate of return, but how the company pays. " Zheng Qiong, another investor who holds real estate dollar debt, said.
Affected by individual credit risk events, the secondary market of China dollar bonds also continued to decline. Wind data shows that at present, there are nearly 100 real estate dollar bonds with a price lower than 10. One bond of Sunshine Group even quoted $0.763, while the coupon price of the bond was 100, with the coupon price dropping by 99%. This means that investors think that the company has no ability to pay, so they openly vote with their feet in the secondary market.
As of September 2 1, the latest Asian dollar bond index (Markit iBoxx) reported 170.02, Asian dollar real estate investment-grade bond index reported 187.97, and Asian dollar real estate high-yield bond index reported 135.76, all of which were at relatively low levels in history and reached the lowest in mid-August.
The sharp shock of the secondary market of real estate dollar debt means that the refinancing of housing enterprises is facing a test and the credit risk of the industry is exposed again. The impact of dollar debt default should not be underestimated. Huayang said, "If you default in the open market, it will directly lead to the fact that enterprises can no longer openly raise funds from the capital market, which will further worsen the capital of enterprises and will also affect the debt issuance and financing costs of other housing enterprises."
Although bond issuance is blocked, there are signs of improvement.
"We issued a notice in March this year, demanding that we are not allowed to buy real estate bonds. Neither state-owned enterprises nor private enterprises are allowed to buy real estate bonds. In the past, real estate liabilities added up to more than 2 billion. At present, the stock of real estate debt is about 400-500 million yuan, which has been cut off a lot before March. Now it seems that the decision to sell at that time was still correct. " Huayang said.
According to Huayang, at present, most brokers have explicit or implicit regulations, that is, they are not allowed to buy private real estate bonds, and some are only allowed to buy real estate bonds of central enterprises or state-owned enterprises.
Even if bonds can be issued, issuers and intermediaries are very cautious in the actual operation process. Huayang told reporters: "Before, we helped a real estate company to issue ultra-short securities lending. As the lead underwriter in the issuance plan, we have made relevant commitments and withdrawal arrangements for insufficient bond subscription, insufficient payment, issuer default, and delay in issuance, with many conditions attached. "
Under the background of relaxed financing environment in the past 10 years, dollar debt has become one of the main financing channels for real estate enterprises, but the financing function of real estate overseas debt has shrunk dramatically.
Wind data shows that from the beginning of 2022 to September 22, the scale of overseas bond issuance by mainland real estate enterprises was $65,438+0,71billion, while the scale of overseas bond issuance reached $43.4 billion in the same period last year, down 60.6% year-on-year. At the same time, it is becoming more and more difficult for housing enterprises to "borrow the new and return the old". The net financing amount of US dollar debt has been negative for 12 months, and the net financing amount is-42 billion US dollars, indicating that the new debt issued by housing enterprises is not enough to repay the old debt.
In addition, according to the data of the Central Reference Institute, in the first half of 2022, the scale of non-bank financing in the real estate industry fell to 482.56 billion yuan, a sharp drop of 56.5% year-on-year. Among them, credit debt decreased by 24.2%, trust decreased by 79.6%, and ABS decreased by 465,438+0.65,438+0%.
To sum up, housing enterprises have fallen into a negative cycle of "downward sales-tight funds-blocked financing-weakened expectations of buyers-further downward sales".
In order to prevent the situation from deteriorating, the latest support measures announced by the state include the 200 billion yuan "Baojiaolou" special relief fund.
In the previous August, the Market Dealers Association of Bank of China (3.06-1.29%) called a number of private housing enterprises to hold a forum to discuss how to support housing enterprises to issue bonds through Zhongzengxin Company.
Country Garden, Longhu, Midea Real Estate, Xincheng Holdings (18.12-3.21%) and Xuhui, as the first batch of participating enterprises, have recently completed the financing work of issuing bonds. coupon rate is between 3.2% and 3.33%, with the issuance scale of10 billion.
Fang Ling of Kerry Real Estate Research Institute said that "full unconditional irrevocable joint and several liability guarantee" can be regarded as the strongest guarantee measure to protect creditors' rights and interests, aiming at improving the financing environment of housing enterprises.
It is reported that the housing enterprises participating in the second symposium, including Zhongnan Construction (2.38 -4.42%, consulting unit), Jinke, Baolong, Shimao Group, R&F and many other private housing enterprises, are ready to increase credit and issue bonds.
Not only that, but many housing enterprises are still actively managing debts and refusing to "lie flat", hoping to tide over the difficulties.
Debt restructuring and self-help.
Standing on the platform of high debt, the road of debt-to-equity swap for housing enterprises is doomed to be long. Especially the maturity of US dollar debt, as of September 30, the maturity of US dollar debt reached 5265438+700 million US dollars (about 369.2 billion yuan).
According to Yang Yan, ordinary investors are willing to sit down and have a good talk as long as the enterprise shows its firm willingness to pay and its redemption plan to investors, so that investors can see that the enterprise is not insolvent, and it is still possible to get out of the predicament with the recovery of policies in the future.
According to the statistics of S&P global rating research report, from 20 18 to August 2022, the common methods to deal with the default risk of domestic and foreign bonds of Chinese real estate enterprises are replacement (exchange offer) and extension. Replacement accounts for nearly 79% of overseas default bonds, and extension accounts for 72% of domestic default bonds.
According to the statistics of the Securities Times reporter, 47 listed real estate enterprises have issued 204 announcements of bond extension/replacement this year, and the real estate bond market is calling for "extension". As of September 2 1, the scale of real estate bonds has reached126.7 billion yuan, a record high.
For example, in August, R&F packaged $65,438+00 in bonds, with a total amount of nearly $5 billion, with a total extension of three to four years. The document is full of conditions such as modifying the interest rate, increasing the disposal of designated assets, and modifying the "event of default" clause.
13 In September, Hejing Taifu announced that in September 2022, two bond swap projects with a total amount of 900 million US dollars had been approved by investors with a total principal of about 93%, and in September 2023, a bond swap project with a total amount of 700 million US dollars was approved by investors with a total principal of about 9 1%. The remaining six US dollar bonds due from 2024 to 2027 were approved, and they were also approved by modifying some investor protection clauses to avoid cross-default with exchange bonds or extending the maturity date of existing bonds.
The seemingly simple announcement is followed by a fierce game. According to the reporter's understanding, less than 8% of the bondholders of Hejingtai do not agree with the replacement plan, and the company is still communicating with these creditors, hoping to find a proper solution.
"In fact, we don't have many choices, because there is no collateral to buy real estate bonds, so once real estate developers default, there is not much room for negotiation, either agreeing to postpone or directly letting enterprises default. As long as the company is insolvent and not bankrupt, the money will always be paid back, and it will take a long time. Of course, if you buy US dollar debt, you can also apply to the Hong Kong High Court for liquidation. This kind of incident has been experienced by Evergrande, Sunac and Fantasia, but the probability of successful petition liquidation is very small, but it is just a way for creditors to vent their dissatisfaction. " Zheng Qiong, an investor holding US dollar debt, said.
Almost all default private housing enterprises are in debt restructuring. Li Jiaen, head of Deloitte's global emergency plan and bankruptcy service, provided self-help advice for real estate enterprises that actively turned debt into deposit.
The first is equity restructuring. Introducing strategic investors/financial investors from state-owned enterprises and central enterprises, balancing the interests of investors, original shareholders, creditors and minority shareholders, evaluating the overall liquidity and investment value of the group, providing pricing basis for interest rebalancing, evaluating the path and safety of investment exit, and fully considering how to rebalance the interests of relevant parties through resource allocation when specifying the restructuring plan are the keys to success.
The second is debt restructuring. The debt risks of overseas holding companies, domestic holding companies and domestic project companies are sorted out, and the debts at all levels are analyzed layer by layer. In view of the hierarchical debts at all levels of the structure, the corresponding debt restructuring schemes are considered, including specific debt restructuring conditions, debt restructuring cycles, debt repayment fund demand, debt repayment resources, severe measures for individual creditors, possible refinancing schemes, etc. The key to the success of debt restructuring is to treat creditors fairly and get the support of major creditors. By winning the support of major creditors, the efficiency of restructuring negotiations can be improved.
The third is asset/business restructuring. Sort out the core and non-core assets, and analyze the value under the scenario of going concern and liquidation, so as to consider specific reorganization methods such as retaining resources, disposing resources, introducing third parties to revitalize resources, and isolating risks. In the process of assets/business reorganization, we should pay attention to the stable operation of assets/business involving Procter & Gamble Building, as well as the source of funds for Procter & Gamble Building, the security of such funds, and the fund monitoring scheme.
In addition to actively promoting debt restructuring, housing enterprises have also introduced credit protection tools such as CDS (Credit Default Swap) or CRMW (Credit Risk Mitigation Certificate).