Where does Kingboard Group come from?
Author |Li Feilin
* |Bond Market Watch.
Country Garden (2007.)HK) is on the stab again.
This morning, Country Garden issued an announcement that Ever Credit Limited filed a winding-up petition against the company with the High Court of Hong Kong on February 27Debt of approximately HK$1.6 billion is involved
And the "difficult" Ever Credit Limited (Eternal Credit***) for Country GardenBackThe parent company is Kingboard Group***00148hk）(hereinafter referred to as "Kingboard Group"), the actual controller is Leslie Cheung, who is known as the "chemical king" in Hong Kong.
Kingboard Group, one of Country Garden's many creditors, is the only company to commence the winding-up of Country Garden in the High Court of Hong KongWhy is Kingboard in a hurry to "liquidate" its debts? Kingboard Group has not yet made a public response to the winding-up petition.
But the profit warning shows thatKingboard Group's net profit in 2023 will decrease by less than 45% year-on-yearThis was due in part to a loss provision on borrowings from Country Garden, as well as impairment losses on the Company's unsold residential properties in East China.
However, Kingboard's projects are relatively low-profile, and many industry veterans in Shanghai said they are not familiar with Kingboard's real estate projects in East China.
*: Kingboard Group announcement It is worth noting that in addition to Country Garden, Kingboard Group has also invested in R&F Properties (02777.).HK) bonds, but Kingboard Group's 2023 interim annual report shows that the investment in R&F Properties has accumulated losses of 15HK$8.1 billion.
The "chemical king" stepped on the real estate
Leslie Cheung's Kingboard Group, which is mainly engaged in the manufacture and sales of copper-clad laminate panels, has a net profit of more than 10 billion yuan in 2021, but the "chemical king" prefers real estate, not only owning real estate projects, but also investing in real estate companies such as Country Garden and R&F Real Estate, in exchange for losses and bad debts.
According to the announcement issued by Kingboard Group in August 2023, Ever Credit Limited entered into a financing agreement with Country Garden on December 1, 2021 and lent out18.HK$800 millionTerm loans.
However, in August 2023, Country Garden's debt crisis broke out, and part of the payment of Kingboard Group was offset by a "debt-to-equity swap".Returned 5HK$8.9 billion, but in arrearsIt's still 15 years oldHK$9.8 billion
Source: Canned Picture GalleryIn addition, Kingboard Group also holds R&F Properties' Group A, B, and C notes, with a total investment cost22.HK$8.3 billion。However, the 2023 semi-annual financial report shows that the total loss has been recognized228.HK$30,000, the total accumulated losses amounted to15.HK$8.1 billion. 。During the same period, Kingboard Group retained listed bondsInvestment interest income was approximately HK$9 million, representing a decrease of approximately 86% from the same period in 2022.
Overall, Kingboard Group's total turnover in the first half of 2023 is about187.HK$200 million, down 33% year-on-year, net profitAbout 13HK$900 million, down 45% year-on-year. Among them,The real estate business saw the largest decline in turnover, down 76% year-on-year, and earnings down 72%.
The reason for the sharp decline in performanceNot only the sales volume and unit price of copper-clad laminates and chemical products in the main business continued to increase year-on-year, but the decrease in the delivery of the company's real estate projects was also one of the main reasons.
Source: Canned Picture GalleryIn fact, Kingboard Group's performance has been declining for two years. In 2022, the company's copper clad laminate sales volume and unit price will both decline, and the unit price of chemical products will fall from a high levelThe annual operating income was 493HK$7.6 billion, down 1300%, net profit 36HK$5.5 billion, down 6609%。
In 2020 and 2021, when most companies were affected by the epidemic, Kingboard Group's performance was not greatly affected. In 2020, the business even grew against the trend, with revenue reaching 435HK$1 billion, a year-on-year increase of 57%, with a net profit of 47HK$3 billion, a year-on-year increase of 52%.
In 2021, Kingboard Group's full-year results reached a record high, with a net profit exceeding HK$10 billion. A total of 1 copper clad laminates were sold in the current year2.4 billion, an increase of 6 million from 2020, and revenue of 567HK$5.5 billion, a year-on-year increase of 3044%, with a net profit of 107HK$7.8 billion, a year-on-year increase of 12918%。
In comparison, the performance in 2022 and 2023 is dismal. Kingboard attributed the reason to:Insufficient market demandThe company believes that the global consumer electronics market demand will decline sharply in 2022 and 2023, which will affect the order demand for printed circuit boards, and copper clad laminates, as the core material of printed circuit boards, will also decline in order volume.
Where does Kingboard Group come from?
According to public information, Kingboard GroupIt is now the largest in the worldCopper pourOne of the manufacturers of panels。Up to now, there are more than 60 branches, and the business scope has been expandedCopper-clad laminates have developed into many fields such as printed circuit boards, chemical products and domestic real estate.
In 1988, the current executive director, Mr. Leslie Cheung, and other founders set up the first paper-clad copper panel factory in Liantang, ShenzhenHong Kong's "chemical king" and "manufacturing brother".
In 1955, Leslie Cheung was born in Shenzhen, due to his poor family, he followed his father to farm since he was a child, and after graduating from middle school, he went to work in a small factory in Hong KongLeslie Cheung "jumped ship" to the U.S.-funded company 3M, a world-famous multinational enterprise with diversified products (Minnesota Mining and Manufacturing).From a warehouse clerk to a messenger, to a salesperson.
Leslie Cheung learned modern management in the century-old enterprise 3M, which benefited a lot and laid a good foundation for his future career.
After leaving 3M, Leslie Cheung chose to start his own businessAnd his mother was able to start a business smoothly, thanks to it.
At that time, his mother mortgaged a property on Hong Kong Island to the bank and cashed out HK$100,000. With this fund, Leslie Cheung partnered with others to start a first-class business such as electronic original parts, copper clad laminates, and chemical raw materials.
Although the business is booming, it is limited by the fact that it has no right to decide on the product, so it plans to set up a factory in Hong Kong to produce copper clad laminates.
Source: Canned Food Gallery However, due to the high cost of opening a factory in Hong Kong, in 1988, Leslie Cheung opened the factory in Liantang, Shenzhen, and opened a second in Longhua, Shenzhen in 1991In 1993, Kingboard Chemical was successfully listed on the Hong Kong Stock Exchange, in December 1999, the spin-off subsidiary Kingboard Copper Foil was listed on the Singapore ** Exchange, and in 2006, the copper clad laminate business was spun offThe Stock Exchange of Hong KongListed on the main board
At the level of personal honor, Leslie Cheung is honored inIn 1993, he was awarded the Young Industrialist Awards of Hong Kong by the Federation of Hong Kong Industries. In 2013, he was appointed as a member of the National Committee of the Chinese People's Political Consultative Conference. In 2017, he was awarded the Bronze Bauhinia Star of the Hong Kong Special Administrative Region. In 2021, he was awarded the Outstanding Industrialist Award and the 2020 Outstanding Leader Award. At the same timeLeslie Cheung has also held a number of public officesThese include the Executive Chairman of the Federation of Hong Kong Guangdong Community Organisations, the Chairman of the Federation of Hong Kong Ching Yuen Community Organisations, the Board of Directors of the Friends of Hong Kong Association, the Founding Chairman of the Hong Kong Kowloon Charity Association** and the Honorary President of the Federation of Hong Kong Jiangsu Community Organisations.
This time, in the face of Kingboard Group's winding-up petition, Country Garden stated in the announcement that it would actively oppose the winding-up petition, and would continue to maintain proactive communication with overseas creditors, and form a restructuring plan with them as soon as possible, and at the same time would try its best to maintain active communication with the petitioner, and negotiate amicably with the petitioner under the principle of fairness to all creditors, and strive to cause the petition to be withdrawn or dismissed as soon as possible.
In addition, Country Garden said that the petition is not expected to have a material impact on the company's restructuring plan or timetable. It is hoped that all stakeholders will maintain their confidence in the company and support the company to continue to work hard to promote the overseas restructuring plan, so as to retain the company's value and protect the interests of all stakeholders to the greatest extent.
*: Country Garden's announcement is reported by "Brokerage China".A winding-up petition is a creditor's right and any creditor can apply for it, but an application does not necessarily mean that it will be wound up. The winding-up is subject to a final decision by the court, which hears a comprehensive assessment and will only approve the winding-up if the value of the winding-up is more in the interests of the majority of creditors. In other words,If the company can protect the rights and interests of all interested parties to the greatest extent possible through other means, such as speeding up sales and restoring stable operations, or debt restructuring and asset restructuring, it is obviously a fairer and more beneficial way for all creditors, and the court will dismiss the winding-up petition. According to previous case statistics, it takes a period of time for the court to go from acceptance to judgment, and this process may last for several months or even longer.
What do you think of Kingboard Group's petition for winding-up of Country Garden? Welcome to leave a message in the comment area to discuss.