Even if the financing “window” is only opened, the glimmer from the window will become the goal pursued by real estate enterprises.
Just entering 2022, real estate enterprises began to be busy for financing.
On January 13, rongchuang issued a share allotment announcement, proposing to place 452 million shares at the price of HK $10 per share. Through this allotment, rongchuang will receive a total of HK $4.52 billion, equivalent to about US $580 million, which will be used for loan repayment and general operation.
Rongchuang told times finance, “in view of the possible uncertainties in the short-term internal and external environment, we decided to raise additional share capital through placing in the market out of cautious consideration, so that the company has more sufficient funds and ability to deal with the short-term uncertainty of the market and environment.”
The reason why rongchuang allotted shares at this node is to grasp the recent correction of the real estate sector. After this allotment, rongchuang will not conduct allotment financing again in the short term.
In fact, the recent news that real estate enterprises have used various means to finance has emerged one after another. After all, after experiencing the difficult financing situation last year, even if the financing “window” is only opened, the glimmer out of the window will become the goal pursued by real estate enterprises.
financing over 20 billion in two months
“Rights issue” is not new to many investors familiar with rongchuang. Since its listing, rongchuang has repeatedly raised funds by means of allotment, the most recent one was two months ago.
In mid November last year, rongchuang and its rongchuang Service announced the allotment of shares at the same time. Among them, rongchuang placed 335 million shares at an issue price of HK $15.18, and rongchuang service placed 158 million shares to no less than six assignees at a price of HK $14.75 per share. The two placements within one day brought a total of about HK $7.343 billion, equivalent to about US $942 million, to rongchuang.
In fact, every time the shares are allotted, there will always be investors who question rongchuang and think that the shares allotted dilute the shareholders’ income. As mentioned, according to the announcement, the Placement Shares and subscription shares respectively account for about 9.05% of the existing issued share capital of rongchuang China, and about 8.30% of the issued share capital of the company after the expansion of the subscription. After the allotment is completed, the shareholding proportion of sun Hongbin, chairman of rongchuang, the largest shareholder, and the persons acting in concert will decline from about 42.25% to about 38.75%.
However, Guosheng Securities Research Institute mentioned in a research report that for real estate enterprises under strict supervision, share allotment is a better financing method. As an external financing form, additional share allotment can expand shareholders’ equity, deal with the debt repayment window with the funds obtained from equity financing, and improve the debt indicators of real estate enterprises.
At last year’s mid-term investor meeting, sun Hongbin repeatedly stressed the word “safety”. Compared with the dilution of equity and interests, he hopes to see real cash recorded in the account. According to the statistics of times finance and economics, the total amount of funds obtained by rongchuang has exceeded HK $11.8 billion in the three allotments in the past two months. You know, it is by no means easy to obtain a capital of more than 10 billion in other financing channels.
Moreover, in addition to the rights issue, rongchuang also has a series of actions to withdraw funds recently, with a total amount of more than 20 billion yuan. Among them, in November last year, sun Hongbin provided rongchuang with an interest free loan of US $450 million out of his own pocket; At the end of the year, rongchuang sold 45.352 million shell American Depositary Shares and recovered about 7 billion yuan; It also obtained 2.68 billion yuan through the sale of hotels and office buildings.
However, after the allotment, rongchuang told times finance that it had enough cash to deal with short-term maturing debts. According to the interim financial report of rongchuang in 2021, as of June 2021, the debt due within one year was 90.962 billion yuan, and the cash balance was 123.19 billion yuan, including 101.099 billion yuan of unrestricted funds, which can cover short-term debt.
In addition, last year, rongchuang’s sales also remained at the level of nearly 600 billion yuan. According to its announcement, by the end of December 2021, rongchuang had achieved a total contract sales amount of about 597.36 billion yuan, a year-on-year increase of 4%.
waiting for “window period” for a long time
The “window period” at the financing end has been waiting for real estate enterprises for a long time.
Just past 2021 is the most difficult year for real estate enterprises to “change money”. According to the research data of China Index Institute, from January to December 2021, the real estate industry realized a total of 1765.22 billion yuan of non bank financing, a year-on-year decrease of 26.3%, and the industry financing tightening trend was significant. Among them, the annual financing of credit bonds was 549.03 billion yuan, the issuance of overseas bonds was 268.29 billion yuan, the trust financing was 545.27 billion yuan, and the ABS financing was 402.63 billion yuan.
In such a market, real estate enterprises used to high leverage operation are miserable. However, since November last year, good news has come from the financial market, including Jinke, country garden, Zhaotai group, Longhu, Lvjing, Greenland, Lvcheng and other real estate enterprises successfully issuing bonds at home and abroad.
Especially in December last year, the financing environment of real estate enterprises showed obvious signs of loosening. According to the statistics of Tongce Research Institute, in December 2021, the financing amount of 40 typical listed real estate enterprises monitored by Tongce Research Institute was equivalent to RMB 76.186 billion, an increase of 13.94% month on month, which continued to rise compared with the previous month.
Tianfeng Securities Co.Ltd(601162) also believes that at present, the policy side has improved significantly. From the observation of the latest bond issuance, some real estate enterprises have broken through the restriction of borrowing new bonds to repay the old. The funds raised by issuing bonds can be used to repay interest bearing liabilities such as bank loans and supplement working capital. There are also signs of marginal relaxation of bank mortgage investment.
Therefore, real estate enterprises are trying to seize this rare opportunity and actively try financing. In the 13 days since 2022, Xuhui, Binjiang, Longhu and other real estate enterprises have issued financing plans.
On January 3, Xuhui announced the issuance of additional US $150 million senior notes due in 2026; On January 5, Binjiang announced the issuance of the first phase of ultra short-term financing bonds in 2022, with an amount of 960 million yuan and a coupon rate of 4%; On January 10, Longhu announced that it would publicly issue the first phase of 2022 corporate bonds with a scale of no more than 2.8 billion yuan from January 13 to 14, which are divided into two types of unsecured bonds: 6-year bonds of 3.15% – 4.15% and 8-year bonds of 3.6% – 4.6%.
In addition, more real estate enterprises with state-owned assets background are also accelerating the pace of financing. Recently, real estate enterprises such as CNOOC real estate, Bbmg Corporation(601992) , Xiamen C&D Inc(600153) , OCT and Greentown have financed by issuing corporate bonds and medium-term notes, with a financing amount of hundreds of millions of yuan or more than 2 billion yuan.
However, it should be noted that although the current financing environment of real estate enterprises has been improved, Tianfeng Securities Co.Ltd(601162) is still cautious about the follow-up trend. It believes that the probability of financing policies in the real estate industry has bottomed out, the improvement of mortgage has been supported from loans to real estate bond financing, but the overall financing improvement is still not significant.
