On the eve of new year’s Eve, a 200 billion scale real estate enterprise Yango Group Co.Ltd(000671) (000671. SZ) once disclosed an advance loss announcement, which said that the annual advance loss in 2021 was 4.5-5.8 billion yuan, a year-on-year decrease of 185% – 210%. The next day, Yango Group Co.Ltd(000671) received a letter of concern from Shenzhen Stock Exchange, asking Yango Group Co.Ltd(000671) to explain the main reasons for the centralized and large amount of inventory falling price reserves, as well as whether there is liquidity risk and whether there is significant uncertainty in operation.
On February 18, Yango Group Co.Ltd(000671) replied to the issues concerned by the Shenzhen Stock Exchange. From the perspective of reply, Yango Group Co.Ltd(000671) is now standing on the edge of the “cliff”. Although the monetary capital is 27.18 billion yuan, the funds available for flexible activities in practice are less than 1%, which is basically equivalent to depletion.
Since the liquidity crisis occurred at the end of October last year, Yango Group Co.Ltd(000671) has carried out a series of positive debt resolution work, but it seems that it still has the pressure of large-scale debt repayment due. Although many overseas US dollar bonds passed the exchange offer at the end of 2021, Yango Group Co.Ltd(000671) has sharply reduced the available funds since 2022. Affected by the rating downgrade, Yango Group Co.Ltd(000671) is facing the prepayment conditions triggered by many open market debts, involving an amount of about 7.9 billion open market debts.
Yango Group Co.Ltd(000671) at present, the default of debt interest has been disclosed. Due to the failure to pay the interest of two overseas bonds totaling US $27.26 million within the 30 day exemption period, the relevant terms of existing domestic bonds and other products may be triggered. Yango Group Co.Ltd(000671) said that although it is trying to communicate, it is facing great challenges and pressure. If it is not exempted in the end, it will face the extreme situation of large-scale debt cross default.
Yango Group Co.Ltd(000671) said that the net cash flow generated from operating activities from January to September 2021 was 20.789 billion yuan, a decrease of 4.70% over the same period last year, due to factors such as bank loan concentration management. The net cash flow from financing activities in the same period was -31.907 billion yuan, mainly due to the repayment of large interest bearing debts and the decrease of cash inflow related to borrowings.
By the end of December 2021, Yango Group Co.Ltd(000671) monetary funds in hand had decreased significantly compared with the beginning of the year. In addition to the pre-sale funds and financing constraints, due to the continuous severe overall environment, financial institutions and project partner shareholders were very cautious about the fund back allocation group of the project company. In the process of practical operation, the supervision of project funds was strengthened, so it was extremely difficult to use project funds, As a result, the proportion of funds available for flexible activities in the actual operation is less than 1% of the book funds, which is very difficult to return to the group level, and the company’s free use of monetary funds is basically exhausted.
In terms of asset disposal, as of the end of September 2021, Yango Group Co.Ltd(000671) main assets include: monetary capital of 27.180 billion yuan, other receivables of 53.604 billion yuan, book value of inventory of 2013.88 billion yuan and book value of long-term equity investment of 29.072 billion yuan. The above four assets account for 83% of the total assets in the same period. However, restricted assets account for a relatively high proportion. As of the end of June 2021, the total book value of restricted assets was 121.520 billion yuan, accounting for 34% of the total assets.
By the end of June 2021, Yango Group Co.Ltd(000671) unrestricted inventory was 95.072 billion yuan. However, the announcement said that with the continuous decline of the market, the liquidity has decreased significantly year-on-year, adding to the factors that the company can freely use monetary funds and basically dried up, the pressure on short-term and long-term debt repayment is relatively large.
Yango Group Co.Ltd(000671) said that from 2021 to now, due to the upgrading of policy regulation, the real estate industry is facing an unexpected tightening of funds. On the one hand, the refinancing in the normal open market has been completely frozen, and financial institutions have tightened the amount of investment, making the company’s financing pressure drop particularly serious; On the other hand, the supervision of pre-sale funds has become significantly stricter, affecting the collection and revitalization of funds, and the available funds have decreased significantly; Coupled with the downward market, the house purchase market is cold. Under the superposition of multiple factors, the liquidity of the company has suffered unprecedented pressure since the fourth quarter of 2021, and the available monetary funds have been seriously affected, resulting in great pressure on short-term and long-term debt repayment.
In terms of interest bearing debt, by the end of September 2021, the interest bearing debt due within one year was 24.798 billion yuan, accounting for 29%, the interest bearing debt due within one to two years was 36.567 billion yuan, accounting for 43%, the interest bearing debt due within two to three years was 17.148 billion yuan, accounting for 20%, and the interest bearing debt due over three years was 6.425 billion yuan, accounting for 7.6%. The interest bearing debts of the company due within 1 year and 1-2 years account for a high proportion, and there is a certain pressure of centralized cashing. Based on the overall assessment of the company by financial institutions, there is a possibility that financial institutions may require prepayment. The company is actively negotiating and does not rule out the situation of greater pressure on short-term cashing.
In response to the Shenzhen Stock Exchange’s inquiry about why the large amount of centralized provision is made, Yango Group Co.Ltd(000671) listed many projects in the mainland, Fujian, the Yangtze River Delta, Beijing, Tianjin and Hebei. There were price cuts in 2021. The reasons include the difficulty of market downturn, coping with the price reduction of surrounding competitive products, accelerating the return of cash, etc. When the expectation of land acquisition was optimistic, Yango Group Co.Ltd(000671) thought that relevant measures such as green smart home and quality tree benchmarking could increase the sales premium. The selling price was high in 2020, but did not expect the impact of the sudden decline of the market.
One month later, that is, on March 18, Yango Group Co.Ltd(000671) will have a bond with a survival scale of US $22.76 million due. According to the available funds of Yango Group Co.Ltd(000671) , there may be the first substantial breach of principal at that time. Recently, Yango Group Co.Ltd(000671) has also announced four times that the shares of the holding stock Guangdonghectechnologyholdingco.Ltd(600673) group and its persons acting in concert have been frozen by the judiciary, and there have been passive reduction in three announcements. The total number of frozen plus or minus shares has reached 560 million shares, accounting for 13.7% of the total share capital of Yango Group Co.Ltd(000671) .
