In the past two days, Vanke has once again staged a "double kill of stocks and bonds", and behind the abandonment of funds, it may be related to a rumor that tens of billions of debts have been rejected. Vanke, which was the first to shout the "Black Iron Age" and actively sold its assets to save itself, will it be able to smoothly shrink its balance sheet and survive the debt turmoil?
What happened to Vanke?
On March 4, many of Vanke's domestic bonds fell. As of **, 22 Vanke 06 "**3610% to 5010 yuan, "21 Vanke 04" **1919% to 6505 yuan, "200,000 08" fell 939% to 6546 yuan, both hit a record low. At the same time, Vanke's overseas corporate bonds maturing on June 7 this year have yielded as high as a terrifying 40876%。
In addition to bonds**, Vanke's share price situation is also not optimistic. As of today**, Vanke A, which is listed on the A-share market, has fallen more than 465%, while Vanke, which is listed on the Hong Kong stock market, fell more than 713%。
A few days ago, it was reported in the market that Yu Liang, chairman of the board of directors of Vanke Group, took the leaders of relevant departments in Shenzhen to Beijing to discuss the extension of non-standard debts with lending institutions mainly insurance companies, but was ultimately rejected. Among them, it involves an investment of 10 billion yuan in Xinhua Asset Management Co., Ltd. (hereinafter referred to as "Xinhua Assets").
Although Xinhua Asset Management quickly came forward to refute the rumors, since last year, Vanke's frequent sell-off of high-quality assets has also become one of the factors that the market is worried about its liquidity.
In the autumn of 2018, Vanke, the industry leader, took the lead in shouting the slogan of "Survive", shocking the real estate industry.
Xinhua Assets urgently refuted the rumors
On March 3, Xinhua Asset Management Co., Ltd. issued a public statement saying that recently, the company has paid attention to false information about its relationship with Vanke. Vanke is a leading enterprise in China's real estate industry and has been maintaining normal business cooperation with Xinhua Asset. As a professional and responsible asset management company, Xinhua Asset Management is full of confidence in China's economic development, resolutely serves the overall strategic development of the country, and supports the healthy development of China's real estate industry.
According to public information, the total investment assets of Xinhua Insurance reached 126 trillion yuan, of which Xinhua Asset Management is entrusted with third-party assets under management of 624 billion yuan.
However, as of press time, Vanke, which has been hit hard by stocks and bonds, has not expressed its opinion on the above "rumors".
Although Xinhua Asset said that the news was untrue, it is undeniable that Xinhua Asset and its controlling shareholder, Xinhua Insurance, do have more connections with Vanke.
From the perspective of creditor's rights relationship, as of the end of 2022, among Vanke's non-traditional financing channels, Xinhua Asset had a total of 7 loans, with a cumulative amount of 978.2 billion yuan. The earliest instalment will be due on December 25, 2024, in the amount of $262.5 billion yuan.
According to the 2023 semi-annual report released by Xinhua Insurance, the parent company of Xinhua Assets, Xinhua Insurance participated in Vanke's debt plan in three phases, with a total amount of about 520.3 billion yuan.
In addition to the borrowing relationship, New China Insurance's dividend products are also among the top ten shareholders of Vanke. As of the end of September 2023, New China Insurance held Vanke A shares1200,000,000 shares, accounting for 1 of its total share capital01%, is the tenth largest shareholder of Vanke.
Interestingly, Xinhua Insurance has been in Vanke since the second half of 2022, especially in the third quarter of 2023, with the number reaching 43.52 million shares.
In terms of personnel, Kang Dian, the former chairman and executive director of Xinhua Insurance, is currently an independent director of Vanke.
It is worth mentioning that, in addition to Xinhua Asset Management and Xinhua Insurance, Vanke also obtained a loan of about 4.6 billion yuan from Taikang Asset Management, a subsidiary of Taikang Life Insurance, and signed an agreement with Huatai Asset, a subsidiary of Huatai Insurance Holdings, to apply for financing of up to 4 billion yuan through the establishment of a debt investment plan, with a financing period of up to 10 years.
Behind the fire sale of high-quality assets
Recently, Vanke Group has frequently sold high-quality assets.
In February 2024, Vanke will take the remaining 50% stake in Shanghai Qibao Vanke Plaza for 23$8.4 billion was sold to Hong Kong Link**, with a discount of 263%, the unit price decreased by about 18 compared with the transaction price three years ago6%。Upon completion of the acquisition, the latter will wholly own the project, while Vanke will exit completely.
For Vanke, Shanghai Qibao Vanke Plaza deserves to be the company's "cash cow", with an occupancy rate of over 93%, ranking first among all projects, but it was finally sold at a 7% discount.
Public data shows that from 2020 to 2022, Qibao Vanke Plaza will achieve a total of 12The operating income of 1.8 billion yuan ranked first among Vanke's commercial projects. In the first half of 2023, Qibao Vanke Plaza will once again start with 2The operating income of 1.3 billion yuan ranked first in the group.
**Only a week after Qibao Plaza, news came out in the market that Vanke was planning to part of the equity of its long-term rental apartment company "Boyu".
At present, the business has been deployed in 32 cities across the country, with 23 management and operation60,000 units, about 180,000 units opened, among the centralized apartments in the country, the scale and operational efficiency of the apartment are ranked first in the industry. In 2020, Yu Liang, chairman of Vanke, revealed that in order to do a good job in "Boyu", Vanke will lose about 9 billion yuan in five years.
However, in October last year, the general manager of Boyu revealed at the Vanke** sharing meeting that Boyu has achieved a continuous return to positive monthly profits from June 2023, and a positive cumulative equity net profit in September, and is expected to achieve overall profitability in 2024.
In addition, at the end of last year, Vanke also discounted some hotel assets.
On December 8, 2023, Banyan Tree Holdings, the receiver, announced that it would take 4800 million yuan to buy the equity of three subsidiaries including Banyan Tree Services (China) held by Vanke, while Vanke's expenditure that year was more than 500 million.
The flip side of the frequent asset sales is the poor sales of Vanke's stock of real estate.
Judging from Vanke's operating data, the company's contracted sales amount in 2022 will decrease by 33% year-on-year6%。In 2023, Vanke will achieve contracted sales of 3,761200 million yuan, a year-on-year decrease of 98%；January 2024 sales of 194500 million yuan, a year-on-year decrease of about 32%.
Vanke is accelerating "destocking". As of the end of September last year, Vanke's inventory balance was 814.7 billion yuan, a significant decrease from 2022 and 2021. According to the statistics of the China Index Research Institute, in the first two months of 2024, Vanke sold a total of 33.4 billion yuan. Compared with the first place Poly, Vanke's selling price decreased by 6 percent year-on-year4%, down 62%, with an even bigger price reduction.
However, the price reduction also has "**From an annual point of view, Vanke's net profit in 2021** is nearly half, although this level will be maintained in 2022, but in the first three quarters of 2023, Vanke Group's net profit attributable to the parent company will be 136200 million yuan, or a year-on-year decrease of more than two percent.
In order to cope with the "downturn" in sales,Since 2022, Vanke has been continuously "shrinking its balance sheet", and the asset side and the liability side have been advancing simultaneously.
The most obvious is to slow down land acquisition and reduce cash burn. According to the ranking of CRIC land acquisition, Vanke will not enter the top 10 in land acquisition in 2024. In the first two months, Vanke only ranked 23rd, and the amount of land acquired was 48900 million.
In January this year, Vanke added a total of 3 new real estate projects, with land acquisition projects in Yinchuan, Kunming and Guiyang; According to the calculation data of the brokerage, Vanke's land investment intensity in the month was 9%, and the average price of land acquisition was about 5,080 square meters.
During the same period, Vanke's debt structure has also changed significantly. Of these, 474 are interest-bearing debts due within one year900 million yuan, compared with 639 at the end of the previous year200 million yuan, down nearly 16.5 billion yuan. Correspondingly, Vanke's long-term borrowings at the end of the same period increased by RMB35 billion compared with the end of the previous year.
In terms of new financing, on March 1, 2024, Vanke announced that it would issue REITs to raise funds115.9 billion yuan, the underlying assets are its three three warehousing and logistics parks.
Vanke in the turmoil
Since 2024, the real estate market has been recovering slowly at both ends of sales and financing, while the actual implementation effect of the whitelist of projects of leading real estate companies such as Vanke is still attracting market attention.
On the sales side, Beijing, Shanghai, Guangzhou and Shenzhen have all thrown out a new property market policy to relax housing purchase restrictions this year; On the financing side, the HKMA held a meeting to require the real estate financing coordination mechanism to "take advantage of the momentum" and establish a local coordination mechanism by March 15 in accordance with the principle of "building as much as possible" to promote the implementation of financing as soon as possible.
According to the latest statistics from the Ministry of Housing and Urban-Rural Development, as of February 28, a total of 276 cities in 31 provinces across the country have established real estate financing coordination mechanisms, and a total of about 6,000 real estate projects that can be given financing support have been pushed; After screening, commercial banks have approved more than 200 billion yuan of loans.
With the simultaneous measures of sales and financing, Vanke is still facing considerable financial pressure.
On the one hand, Vanke's operating cash flow is still declining significantly, and sales have not picked up. In 2021, the net cash flow from operating activities was 4.1 billion, a year-on-year decrease of 92%, and in 2022, the net cash flow from operating activities further decreased to 27500 million, while the net cash flow generated by Vanke's operating activities in the first three quarters of 2023 was only 23.5 billion.
On the other hand, Vanke's debt pressure is still high. As of the end of September 2023, Vanke had 1036 monetary funds800 million, down from mid-2023, and the coverage multiple for short-term debt is 22 times. Although it may seem like a lot, Vanke's onshore bonds maturing in the next 12 months alone are already as high as 240800 million yuan.
It is worth mentioning that in recent years, due to the implementation of special funds for the pre-sale funds of real estate enterprises in recent years, real estate companies cannot mobilize a penny from the pre-sale funds before the conditions are met. As a result, there is a lot of cash in the account in the statement of the real estate company, but it cannot be actually used.
On November 6 last year, Vanke responded to the recent fluctuations in secondary market bonds at the third quarter results briefing, with more than 150 major domestic and foreign financial institutions and funders attending. During the meeting, state-owned assets rarely stood on the platform to speak out, saying that Vanke was not alone. Xin Jie, chairman of Shenzhen Railway, said that ** is a rumor, which will help Vanke revitalize tens of billions of yuan of bulk assets and choose the opportunity to buy Vanke bonds.
At that time, Vanke also revealed that if the pre-received regulatory funds were excluded, the current funds in hand would be 60 billion. "It's always the coldest time before dawn, but it's still important to have faith in the future. Yu Liang, chairman of the board of directors of Vanke Group, said.
A month later, Vanke's name also appeared frequentlyAgricultural Bank of China, China Construction Bank, Bank of Communications, Industrial and Commercial Bank of China, Bank of China, Postal Savings Bankand other private real estate enterprises are invited to participate in the symposium list.
At present, there are 13 private listed real estate companies that have not yet constituted substantial defaults, namely Vanke, Longfor Group, Greentown, Gemdale Group, Binjiang Group, Xincheng Holdings, Midea Real Estate, Excellence Group, Agile, Hopson Development, Galaxy Holdings, Jinhui and Yanlord Land.
As a real estate leader, the market is waiting with bated breath to see whether Vanke can survive the debt turmoil smoothly.