Written by |Planet.
*|Bedo Finance.
Entering 2024, Huaxia Happiness is still not very "happy".
Recently, China Fortune Foundation Co., Ltd. ***SH: 600340, hereinafter referred to as "China Fortune") issued an announcement on debt overdue, debt restructuring progress and other matters. According to the content, China Fortune has failed to repay its debts as scheduled as of January 31, totaling 2441.5 billion yuan.
After being at the forefront of the real estate development track as a dark horse, China Happiness, which holds the construction of comprehensive parks and is deeply involved in the field of industrial new cities, has had a glorious time, but it has also lost Maicheng due to radical expansion. Even after announcing its debt restructuring in 2021, it never stopped looking for a way out.
However, in order to achieve a "turnaround against the wind", there are still many problems that need to be solved by Huaxia Happiness, which is surrounded by crises.
According to public information, the history of Huaxia Happiness can be traced back to 1998 at the earliest. In 2002, the private real estate development company began to transform into the development of industrial parks, focusing on new industrial towns and supporting residences, and the Gu'an Industrial Park developed by the company has become a provincial key development zone and a benchmark for industrial cities in Hebei.
According to reports, as of 2019, China Fortune has introduced more than 600 enterprises to Gu'an Industrial Park, attracting nearly 140 billion yuan of investment. Under the role of the engine of the development of the new industrial city, Gu'an County has become one of the top 100 counties in the country from the second-to-last agricultural county in Hebei, and its fiscal revenue has increased from 1100 million yuan increased to 9.6 billion yuan in 2019.
In the field of industrial new city construction, Huaxia Fortune, which became famous, also quickly won the favor of the best. Since then, the company has successively built Dachang Chaobaihe Industrial Zone, based on the Beijing area to expand the business territory of enterprises, and undertake the development, construction and operation of comprehensive parks with new models and mechanisms.
In 2011, Huaxia Fortune was listed on the Shanghai ** Stock Exchange through backdoor ST Guoxiang, and continued to make great progress, achieving 1203 in 2016The total sales of 2.5 billion yuan increased by 66 percent year-on-year43%, becoming the only new industrial city operator in the 100 billion camp, and the growth trend continues to improve.
It is worth noting that all the income of China Fortune before the listing was in the Beijing area. Unwilling to be confined to a corner, China Fortune began to replicate the new industrial city model in a large area, and the company's revenue share in the Beijing area fell from 96% in 2014 to 69% in 2018 and further to 51% in 2020.
Up to now, China Fortune has developed six major sectors, including new industrial city, industrial development, residential development, asset management, property service and innovative business, and has completed the layout of more than 10 core metropolitan areas in China, including Beijing, Shanghai, Guangzhou, Nanjing, Hangzhou, Zhengzhou and Wuhan, with a business territory covering more than 80 regions around the world.
It is worth noting that the cooperation model between China Fortune and China is called the "development PPP model". Under this model, China Fortune provides comprehensive development services such as infrastructure, public service facilities and urban operation with industrial development as the core, and assumes the responsibility of investment, construction, operation and management, and the return on investment is linked to performance.
The development PPP model of the new industrial city can undoubtedly promote the integrated development of industry and city, and enterprises can obtain long-term returns while taking risks. However, at the same time, the development model of such long slopes and thick snow has a large investment in the early stage and a long return cycle.
The turning point of the fate of Huaxia Happiness occurred in 2017. Due to the decrease in the number of real estate customers due to the pressure of purchase restrictions in the property market around Beijing, the revenue of China Fortune's real estate development business decreased by 18 percent year-on-year22% to 2893.1 billion yuan, and the balance of other current liabilities soared by 458 year-on-year62%, and the inventory turnover rate is lower than the average of real estate enterprises.
After the disclosure of the annual report, the Shanghai Stock Exchange issued an inquiry letter to China Fortune for the post-audit of the 2017 annual report, requiring China Fortune to respond to 18 questions, including the reasons for the decline of the real estate business, the promotion and replicability of the new industrial city, the sustainability of the capital situation and financing business, and liabilities.
It was also during this period that it was reported that Peacock Villas Group, a real estate development platform within China Fortune, began to package some assets with a total value of more than 20 billion yuan to seek cooperation or cooperation. An insider revealed that most of the projects in Peacock Villas are reducing prices, and the price reduction is as high as more than 10,000.
In order to alleviate the financial problem, China Fortune introduced Ping An of China as a strategic investor in April 2018, and the two reached a VAM agreement, requiring that the net profit growth rate of China Fortune in the next three years should not be less than % and 105%, that is, the net profit of each year should not be less than 1141.5 billion yuan, 1448.8 billion yuan and 18 billion yuan.
The agreement stipulates that if the actual net profit of China Fortune in any year is less than 95% of the promised profit margin, Ping An Bank shall be compensated in cash. However, Huaxia Bank's net profit in 2020 fell sharply to 366.5 billion yuan, which is only 20 percent of the VAM agreement36%。
Time enters 2021, and Huaxia Fortune, which has been listed for ten years, recorded 390 for the first timea loss of $3 billion; Net cash flow from operating activities was -26$4.6 billion; Sales fell to 2816.8 billion yuan, a year-on-year decrease of 7006%；The debt-to-asset ratio reached 9460%, a sharp increase of 13 compared to the same period in 202031 percentage points.
Under the asset liquidity crisis, China Fortune's debt restructuring plan was reviewed at the end of 2021, and 219.2 billion yuan of financial debts will be repaid through the sale of assets to withdraw funds, ** assets to take away financial debts, priority financial debts to be extended or repaid, cash payment, and compensation by trust beneficiary shares.
Wang Wenxue, chairman and general manager of China Fortune, also admitted at an internal meeting that he was "ambitious and impatient". He said that due to the misjudgment of the situation, Huaxia Fortune continued to increase investment in the Huanjing Industrial New City and supporting residential investment in the later period, but the volume and price of the Huanjing residential market fell under the purchase limit, and the scale was cut in half, which eventually led to the rupture of the capital chain.
According to the restructuring plan announced by China Fortune, the company is expected to complete most of the debt restructuring in 2022, and the previously released data also shows that it has achieved debt restructuring through signing contracts and other means18756.5 billion yuan, accounting for 85% of the total debt amount6%, but it was revealed to be in default at the end of 2023.
According to sources in the capital market, China Fortune should pay 1. percent of the principal amount of US dollar bonds in cash to creditors participating in offshore debt restructuring by 20248%, but the holder reported that he only received about 055 per cent of the reimbursement, less than one-third. The company explained that the partial reimbursement was affected by "technical issues".
On the other hand, China Fortune and Zhongrong Trust have signed a "Debt Restructuring Agreement", and the extension plan of relevant trust products has been finalized, and the extension period will be extended for 5 years to 2027. However, it failed to pay 4660 to Zhongrong Trust within the agreed timeThe interest of 950,000 yuan has constituted a breach of contract.
With the bond principal on one side and the trust interest on the other, it is not easy for China Fortune to make a comeback. In fact, the company has been actively promoting debt restructuring in recent years, and launched a supplementary plan in September 2022 to build an asset-light service platform of "Happiness Select" and "Happiness Preferred" to offset financial debts and operating debts.
China Fortune also sold assets several times in December 2022, transferring four assets to Gu'an Industrial Port Investment *** Gu'an Industry Development Education Investment ***, with a total price of 99.9 billion yuan, and announced that it would give the relevant assets of the southern headquarters to China Resources Land for 12.4 billion yuan.
According to a person familiar with the matter, among the transferred asset packages, the Wuhan Yangtze River Center project, the Wuhan Zhongbei Road project and the Nanjing Dajiaochang project are commercial real estate projects led by Wu Xiangdong, the former executive director of China Resources, after he became the CEO of China Fortune, at a cost of 1987.4 billion yuan. In other words, this sale is equivalent to about 6% off**.
However, due to the height restriction of the Nanjing project and the planning of the Wuhan project, the progress of the payment of the relevant transaction funds was affected. As of the end of June 2023, China Fortune has only received the first transfer price from CR Land, which is about 27500 million yuan, the difficulty of new income in the account, has become a major pain point in its cash flow supplement.
According to the repayment method in the "redemption" agreement of the "Debt Restructuring Plan", China Fortune announced on January 25 that it has 100% of the equity of its wholly-owned subsidiary, Yunuo (Gu'an) Information Consulting Services, hereinafter referred to as "Gu'an Information Consulting"), and 255 of 11 target project companies8.4 billion yuan of creditor's rights to set up a self-benefit trust.
According to reports, Huaxia Bank intends to offset the consideration of 1 yuan of financial debts according to the above-mentioned trust share of every 1 yuan of face value, and the compensation of the company to some creditors does not exceed 2400.1 billion yuan of financial debt. The share of the trust beneficiary rights that is not used to pay off the debt is still held by Gu'an Information Consulting.
According to the latest information disclosed by China Fortune, as of January 31, 2024, the cumulative amount of debt restructuring of 219.2 billion yuan in China Fortune's "Debt Restructuring Plan" through signing and other means is about 1,885700 million yuan, accounting for about 8603%。
The total amount of equity offset for financial and operating debts of the "Happiness Select Platform" built by China Fortune with the equity of its subsidiaries is 1601.7 billion yuan, and the proportion of equity corresponding to the "Happiness Select Platform" obtained by relevant creditors is about 2697%；The amount of equity offset operating debts of "Happiness Select Platform" and "Happiness Preferred Platform" is approximately 534.1 billion yuan.
From the previous disclosure of litigation and arbitration to January 31, the total amount involved in the new litigation and arbitration matters of China Fortune was 18$2.9 billion. The company said that the relevant cases are still in the process of progress, and the final outcome is uncertain, and it is not yet possible to judge the impact on its profit in the current period or in the following period.
According to the performance forecast released by China Fortune, the company expects it to achieve a net profit of -9 billion yuan to -6.1 billion yuan in 2023; The net profit after deducting non-profits was -11.3 billion yuan to -9.9 billion yuan. In 2022, the above two performance indicators are 158.3 billion and -164$8.9 billion.
Huaxia Fortune explained that the main reason for the pre-loss in this period is that it will give some assets with strong liquidity in 2023, and there are losses in related transactions. At the same time, the company's debt stock is still large, but the current interest capitalization rate is extremely low, resulting in high financial expenses.
China Fortune stressed that it will resolutely abide by the business philosophy of integrity, actively solve current problems, implement the main business responsibility, take "no debt evasion" as the basic premise, and in accordance with the principles of marketization, rule of law, fairness and justice, and classified policies, steadily resolve the company's debt risks, and safeguard the legitimate rights and interests of creditors in accordance with the law.