Since the end of 2018, debt risks have broken out in many places in Guizhou. Overdue non-standard asset management products in the political and trust sector have become commonplace, and risks are spreading from economically backward areas to developed areas.
01 Funds have been frozen Recently, according to Tianlutan Trust, Guocom Trust, Zunyi Economic and Technological Development Zone Investment and Construction Co., Ltd. (hereinafter referred to as "Zunyi Economic and Technological Development Zone") other civil rulings were issued, and the applicant Guocom Trust's preservation application complied with the law
stipulations shall be allowed.
The civil ruling shows that the deposits in three bank accounts of the respondent Zunyi Jingkai Investment were frozen. The total amount of frozen bank account deposits was 200 million yuan. The freezing period was one year. The starting and ending time was subject to the notice of assistance in execution.
"Small Debt Market Watch" noted that in addition to Tianlutan Trust and China Communications Trust, Zunyi Economic Development Investment is also involved in a contract dispute with Zhongtai Trust. The court accepting the case is the Shanghai Financial Court, which will open on September 22.
In July this year, Zunyi Economic Development Investment was listed as the person subject to execution by the People's Court of Huichuan District, Zunyi City, and the execution target was 13,700 yuan.
It is worth noting that many non-standard products guaranteed by Zunyi Economic Development Investment have been overdue this year.
According to media reports, since the end of 2019, "Donghai Ruijing Credit Suisse No. 51 Asset Management Plan" and "Guofu-Huafu No. 1 Private Equity Investment Fund" have become overdue one after another. Among them, the financier is Huichuan Urban Investment and the guarantor is
Zunyi Jingkai Investment provides irrevocable joint and several guarantee liability.
Huichuan Urban Investment and Zunyi Economic Development Investment are the only two urban investment platforms in Zunyi Huichuan District, mainly engaged in infrastructure and affordable housing construction.
According to statistics from "Small Debt Market Watch", there are currently 9 existing bonds of Zunyi Economic Development Investment, with an existing scale of 4.236 billion yuan, and the centralized redemption dates are mainly in 2024.
In terms of credit ratings, the credit ratings of Zunyi Economic Development Investment and related debts are AA, and the rating outlook is "stable."
02 Liquidity dried up According to the official website, Zunyi Economic and Technological Development Investment was established in 2011 and is mainly responsible for the construction of basic and supporting facilities in Zunyi Economic and Technological Development Zone, shantytown renovation, asset operation, investment and financing, etc.
Zunyi Economic Development Investment is an important infrastructure construction entity in the Zunyi Economic Development Zone. It is a state-owned holding company established with the approval of the Zunyi Economic Development Zone Management Committee and the Huichuan District People's Government. The actual controller is the Zunyi Economic Development Zone Management Committee.
In recent years, Zunyi Economic Development Investment's performance growth has been sluggish, its profits have relied heavily on fiscal subsidies, and its ability to generate cash from operations has been poor.
In the first half of this year, Zunyi Economic Development Investment achieved operating income of 951 million yuan, a year-on-year increase of 4.34%; net profit attributable to the parent company was 104 million yuan, a year-on-year decrease of 1.94%; net operating cash flow was -327 million yuan.
As of the latest reporting period, Zunyi Economic Development Investment's total assets were 29.027 billion yuan, total liabilities were 15.949 billion yuan, net assets were 13.078 billion yuan, and the asset-liability ratio was 54.94%.
"Small Debt Market View" analyzed the debt structure and found that Zunyi Economic Development Investment mainly consists of non-current liabilities, accounting for 56% of the total debt ratio.
Non-current liabilities mainly include long-term loans of 4.357 billion yuan, including non-standard loans of 900 million yuan, and bonds payable of 3.584 billion yuan.
As of the end of June this year, Zunyi Economic Development Investment still had current liabilities of 7.068 billion yuan, mainly non-current liabilities and other payables due within one year. Its short-term liabilities due within one year were 3.498 billion yuan.
This year, Zunyi Economic Development Investment’s due debt includes bank loans, bonds and non-standard borrowings of 1.453 billion yuan, 741 million yuan and 1.621 billion yuan respectively.
However, Zunyi Economic Development Investment's liquidity has been nearly exhausted since 2019 due to the repayment of a large amount of debt.
At present, the monetary funds on its account are only 232 million yuan, and the cash-to-short-term debt ratio is only 0.07. Excluding restricted funds, there is not much left, and there is a large short-term debt repayment risk.
In terms of bank credit, as of the end of 2019, the total credit granted to Zunyi Economic Development Investment Bank was 7.292 billion yuan, and the unused credit line was 639 million yuan, which shows that its reserve funds are not sufficient.
Overall, Zunyi Economic Development Investment has interest-bearing liabilities of 11.442 billion yuan, with an interest-bearing debt ratio of 72%. It is worth noting that high interest-bearing liabilities will incur high financial costs and erode profits.
In 2019, Zunyi Economic Investment’s interest expense was 319 million yuan, which was 1.4 times its net profit that year.
In the context of poor operating cash flow and depleted liquidity, Zunyi Economic Development Investment's debt repayment funds mainly come from external financing and government subsidies.