On February 7, Yango Group Co.Ltd(000671) (000671. SZ) announced that the trading of bonds with a total scale of 6 billion yuan publicly issued by the company was suspended and the trading mode was adjusted.
According to the announcement, Yango Group Co.Ltd(000671) received the announcement of Dongfang Jincheng International Credit Evaluation Co., Ltd. on reducing the credit rating of Yango Group Co.Ltd(000671) subject and related debts issued by Dongfang Jincheng International Credit Evaluation Co., Ltd. (hereinafter referred to as “Dongfang Jincheng”), Dongfang Jincheng lowered the credit rating of Yango Group Co.Ltd(000671) subject from AA to BBB, with a negative rating outlook, and “20 Yangcheng 01” The credit rating of “20 Yangcheng 02”, “20 Yangcheng 03” and “21 Yangcheng 01” bonds was lowered from AA to BBB.
According to the provisions of the notice on matters related to the adjustment of the trading mode of bonds during the listing period of Shenzhen Stock Exchange, upon the application of the company, the trading of the above four bonds and “20 Yangcheng 04” and “21 Yangcheng 02” will be suspended for one trading day from the opening of the market on February 8 and resumed from the opening of the market on February 9. From the date of resumption, the trading mode of the above bonds will be adjusted to only the agreed block trading mode, Maintain the original net pricing method.
The main reasons for rating adjustment by rating agencies are that Yango Group Co.Ltd(000671) expects a significant loss in net profit in 2021, Yango Group Co.Ltd(000671) issued an announcement that it did not pay “21 Yango Group Co.Ltd(000671) mtn001” interest on schedule, and Dongfang Jincheng implemented irregular follow-up rating and adjusted the rating according to relevant credit rating systems.
On January 28, Yango Group Co.Ltd(000671) issued a performance forecast for 2021. It is expected that the net profit attributable to the shareholders of the listed company will be a loss of 4.5 billion yuan to 5.8 billion yuan in 2021.
The announcement said that the Yango Group Co.Ltd(000671) performance change was mainly due to the withdrawal of corresponding inventory falling price reserves based on the principle of prudence and the decline in the settlement scale of real estate business.
Yango Group Co.Ltd(000671) explained in the announcement that in 2021, the policy regulation of the real estate industry was upgraded, the market demand fell rapidly, and the overall sales of the industry fell seriously. In order to further promote sales collection, the company took price reduction measures.
In addition, there are frequent credit risk events in the industry, domestic and foreign rating agencies have successively lowered the company’s rating, the company’s refinancing is blocked, the liquidity of payment collection is greatly limited, the liquidity pressure is obvious, the customer confidence has been greatly reduced, the passenger flow has decreased significantly, which has a great impact on the company’s sales, and the future sales situation is not optimistic.
Moreover, in the future, the industry still adheres to the basic ideological program of “housing without speculation”, and is committed to establishing a long-term mechanism to promote the healthy development of real estate and exploring new development models. The company believes that the real estate market will still be dominated by stability in 2022 and is cautious about the volume and price expectation of sales.
Yango Group Co.Ltd(000671) said that due to the impact of the market and its own liquidity, the number of completed projects of the company decreased in 2021, resulting in a decrease in operating profit and a decrease in the settlement scale of real estate business.
The provision for impairment will help it concentrate more advantageous resources to deal with the new market situation and solve the current crisis. With the disposal of assets, the optimization of debt structure, the decline of leverage and the stripping of inefficient assets, the operation of Yango Group Co.Ltd(000671) will be more stable in the future.
As of the closing on February 7, Yango Group Co.Ltd(000671) was 2.6 yuan per share, down 9.72%.
