After a week’s delay, on February 18, Yango Group Co.Ltd(000671) (000671. SZ) finally replied to the letter of concern about Yango Group Co.Ltd(000671) issued by Shenzhen Stock Exchange (hereinafter referred to as Shenzhen Stock Exchange).
Previously, on January 28, Yango Group Co.Ltd(000671) disclosed an advance loss announcement, saying 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 (January 29), Yango Group Co.Ltd(000671) received a letter of concern from Shenzhen Stock Exchange, asking to explain the main reasons for the centralized and large amount of inventory falling price reserves, as well as whether there is liquidity risk, whether there is significant uncertainty in operation and other issues.
However, Yango Group Co.Ltd(000671) announced on February 11 that it was not expected to complete the reply before February 11. Upon application, it was postponed to reply to the attention letter before February 18.
large scale provision for price decline caused by price reduction and promotion
In response to the letter of concern from Shenzhen Stock Exchange asking for an explanation of why the inventory falling price is accrued on a large scale, Yango Group Co.Ltd(000671) attributed the inventory falling price to price reduction and promotion in the reply letter, and the reason for price reduction and promotion is that the sales is not optimistic. In addition, domestic and foreign rating agencies have successively lowered the company’s rating, which has hindered the company’s refinancing and greatly restricted the liquidity of payment collection, resulting in obvious pressure on liquidity, a sharp decline in customer confidence and passenger flow. It is not optimistic about the company’s future sales situation, promote sales payment collection and take price reduction measures.
Yango Group Co.Ltd(000671) said in the reply that the company accrued the corresponding inventory falling price reserves based on the principle of prudence. According to the accounting standards, if the future market conditions improve, the inventory falling price reserves can be reversed.
“The provision for impairment will directly affect the profit, and the value of the inventory will be reduced accordingly. However, according to the currently published data, Yango Group Co.Ltd(000671) does not show the final provision for inventory depreciation. The above methods may lead to technical losses, but the details need to see the final statement.” Zhang Bo, President of anjuke Real Estate Research Institute, believes that this approach is equivalent to lowering first and then raising again when the market is good. In this way, profits will be affected. Since the market is bad, it will be reduced more.
the decline in sales scale affects the cash return
According to the requirements of Shenzhen Stock Exchange, in combination with the company’s operation and capital status, explain the company’s interest bearing debt balance, short-term maturity and overdue debt, analyze the company’s short-term and long-term solvency, and explain whether the company has liquidity risk and whether there is significant uncertainty in its ability to continue operation.
Yango Group Co.Ltd(000671) replied that the company achieved less than 80% of the sales target in 2021. In 2021, the company’s full caliber sales amount was 183.8 billion yuan, a year-on-year decrease of 16%; The full caliber sales area is about 11.48 million square meters, a year-on-year decrease of 25%. Among them, the amount of equity sales was about 117.7 billion yuan, a year-on-year decrease of 16%; The equity sales area was about 7.88 million square meters, a year-on-year decrease of 22%. The decline in sales scale directly led to the company’s payment collection scale being lower than expected, which affected the company’s cash return from the source, but the company still made every effort to improve the payment collection.
Due to the supervision of pre-sale funds and other reasons, the funds are deposited at the level of the project company. The term of pre-sale funds and credit bonds are seriously mismatched, which is difficult to offset the net outflow of financing. The centralized maturity of credit bonds directly leads to the huge liquidity pressure faced by the company. In addition, 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, but it does not rule out the situation that there is greater pressure on short-term cashing.
It is worth mentioning that at the 2018 annual performance meeting, Zhu Rongbin, then executive chairman and President of Yango Group Co.Ltd(000671) group, said in an interview with the media, “I think the whole turnover speed of Yango Group Co.Ltd(000671) is still slow. In the past, the development cycle of a project took more than 30 months, but now it has been shortened to more than 20 months, which is a normal level among peers.”
Zhu Rongbin further said that Yango Group Co.Ltd(000671) still needs to speed up, and it is far from the benchmark enterprises in the industry, and efforts are still being made to improve in this regard. The management is most concerned about cash flow, because the company is developing at a high speed, the debt ratio can be higher, but the cash flow can not be interrupted.
freely available monetary funds have basically dried up
In terms of interest bearing debt, by the end of September 2021, Yango Group Co.Ltd(000671) interest bearing debt due within one year was 24.798 billion yuan, accounting for 29.20%, interest bearing debt due within one to two years was 36.567 billion yuan, accounting for 43.05%, interest bearing debt due within two to three years was 17.148 billion yuan, accounting for 20.19%, and interest bearing debt due over three years was 6.425 billion yuan, accounting for 7.56%. 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.
Yango Group Co.Ltd(000671) said that by the end of December 2021, the monetary capital in hand of the company had decreased significantly compared with the beginning of the year. In addition to the limited pre-sale funds and financing constraints, due to the continuous severe overall environment, the financial institutions and project partner shareholders are very cautious about the fund return group of the project company. In the process of practical operation, the supervision of the project funds is strengthened, so it is extremely difficult to use the project funds, resulting in the proportion of the funds available for flexible activities in the actual operation to less than 1% of the book funds, It is very difficult to return to the group level, and the company’s free use of monetary funds is basically exhausted.
Zhang Bo said that under the background of the industry downturn, Yango Group Co.Ltd(000671) the return of operating cash flow was blocked, which led to the outbreak of its debt crisis. It is expected that more positive actions will be taken in the next step, which does not rule out the use of equity level and asset disposal to alleviate the current crisis. Although the real estate financing has eased this year, it is undoubtedly a cup of water for enterprises with huge debt pressure.
It is understood that recently Yango Group Co.Ltd(000671) is actively saving itself by disposing of assets, requesting financial institutions and government support. However, affected by many factors such as the macroeconomic environment, the regulatory environment of the financial industry, covid-19 epidemic and industrial policy regulation, Yango Group Co.Ltd(000671) is still facing periodic liquidity problems, litigation, arbitration Assets are frozen and other uncertain matters affecting normal operation.
As of the closing on February 18, Yango Group Co.Ltd(000671) shares reported 2.69 yuan / yuan, with the latest market value of 11.138 billion yuan.
