At the same time of the decrease of net profit and sales, Greenland holding is also in the process of control right planning. After the continuous emergency suspension on Monday and Tuesday, Greenland holdings announced on July 21 that it would suspend trading for up to one week because of shareholders planning of the companys control structure.
On the afternoon of July 26, Greenland holdings announced that Shanghai real estate (Group) Co., Ltd. (hereinafter referred to as Shanghai real estate) and Shanghai Urban Investment (Group) Co., Ltd. (hereinafter referred to as Shanghai urban investment) intend to transfer part of the shares held by Greenland holdings through public solicitation of transferees. The total proportion of shares to be transferred shall not exceed 1% of the total share capital of Greenland 7.5%u3002 This means that Greenland holdings will start the second mixed reform.
The sales target of 400 billion yuan has not been achieved twice, and Greenland holdings, which has been stagnant, is facing problems such as weak sales growth, high leverage and poor solvency. Now Greenland holdings ushered in the second mixed reform, and what kind of situation will it face? Investor.com asked Greenland holdings for confirmation of relevant information, but the company did not comment.
Weak sales growth
Founded in 1992, Greenland holdings is a global diversified enterprise group. At present, Greenland Holdings has formed a diversified business pattern around the world, with real estate development as the main business, large infrastructure, large finance, large consumption and emerging industries such as scientific innovation and health care. After 27 years of development, the sales growth of Greenland Holdings has entered a bottleneck.
The novel coronavirus pneumonia outbreak in the first half of 2020 was a sudden occurrence, which had a negative impact on economic and social development, and real estate enterprises also suffered from it. However, under the pressure of external environment, the anti pressure ability of real estate enterprises is also different. Some of them go against the current and some of their performance declines. Greenfield holdings is the latter.
According to the semi annual performance express report of 2020, in the first half of 2020, Greenland holdings realized operating revenue of 209.925 billion yuan, an increase of 4.14% over the same period of last year, and the net profit attributable to its parent company was 7.948 billion yuan, with a year-on-year decrease of 10.79%. Greenland holding is optimistic about its performance of increasing income but not increasing profits. It said in the express that after efforts, the overall business situation of the company has rebounded to the bottom, improved quarterly and the trend is better.
Compared with Greenland holdings, Poly Real estate is slightly better in scale. Although it is also affected by the epidemic situation, from the performance point of view, Poly Real estate is obviously stronger than Greenland holdings. There is also a big gap between the two in terms of sales growth in the first half of the year.
In the first half of 2020, the sales growth of Greenland holdings is also relatively weak. According to the contract of the same period of last year, the sales amount of Greenland decreased by RMB 13.31 billion to RMB 20.37 billion compared with the same period of last year, and the sales amount of the real estate decreased by RMB 13.31-2.9 million compared with the same period of last year.
In comparison, from January to June 2020, Poly Real Estate achieved a contracted area of 14.9224 million square meters, a year-on-year decrease of 8.81%, and a contract amount of 224.536 billion yuan, a year-on-year decrease of 11.12%. Greenland holdings 20.7% of the sales decline is significantly greater than Poly Real Estate 11.12%.
In fact, the sales of Greenland holdings have been weak for a long time. As early as 2018, Greenland holdings missed the sales target of 400 billion yuan, but it still did not exceed 400 billion yuan in 2019, becoming the slowest growth company in the top 10 li of real estate enterprises in recent two years.
According to the sales situation in recent years, from 2015 to 2019, the contract sales amount of Greenland holdings were 230.1 billion yuan, 255.5 billion yuan, 306.5 billion yuan, 387.5 billion yuan and 388 billion yuan respectively. The growth rate of contract sales from 2016 to 2019 was 10.82%, 20.20%, 26.42% and 0.10%, respectively, and the sales growth slowed down.
Although Greenland holdings did not clearly put forward a specific sales target for 2020, according to Zhang Yuliang, chairman and President of Greenland holdings, said at the performance exchange meeting on January 8, the sales target of Greenland this year will not increase much. According to the sales volume of RMB 133.029 billion in the first half of 2020, it is still difficult for Greenland holdings to achieve the original sales target of 400 billion yuan in 2020, and the target achievement rate in half a year is only 33.25%.
On July 24, Greenland holding subsidiary announced the issuance of US dollar bonds. The announcement said: to meet the development needs, the subsidiary Greenland global completed the issuance of US $400 million fixed rate bonds and US $250 million fixed rate bonds on July 22, 2020, of which the coupon rate of US $400 million fixed rate bonds was 6.125%, and the maturity date was April 22, 2023; the coupon rate of US $250 million fixed rate bonds was 7.25%, and the maturity date was January 22, 2025. The above bonds will be listed on the Hong Kong stock exchange.
In fact, the overall financing cost of greenbelt holdings to issue us dollar bills is relatively high. In June this year, Greenland global issued $500 million fixed rate bonds, with a coupon rate of 6.25%, which is higher than the 3.375% preferred notes issued by Longhu real estate this year, and higher than the average domestic bond issuance cost of 4.89% in June.
In fact, in 2020, affected by the epidemic situation, domestic liquidity will continue to be loose, the financing cost of the real estate industry will go down, and the scale of overseas financing will decrease slightly. Wind data shows that since this year, the average coupon rate of bonds issued by real estate enterprises is between 4% and 6%. On the whole, the average cost of issuing bonds does not exceed 6%, and the average interest rate of 3-year and 5-year bonds with relatively concentrated quantity is less than 5%. However, the financing cost of the two bonds issued by Greenland holdings did not decrease but increased, which was higher than the financing cost of 5.60% in 2019, which did not reflect the positive role of Greenland holdings as an old brand real estate enterprise in the credit financing market.
According to the financial data collected by investor.com, the higher financing cost of Greenland holdings may be due to its tight financial situation. In 2019, the net debt ratio of Greenland holdings was 155.60%, and rose to 171.59% at the end of the first quarter of 2020; the asset liability ratio was 82.81%, which was 81.92% in the first quarter of this year. Compared with peer enterprises, the asset liability ratio of Greenland holdings is higher. The average asset liability ratio of real estate companies listed on the Shanghai and Shenzhen stock exchanges in 2019 is 68.8%, according to the data of the China Index Research Institute.
According to the first quarter report of 2020, as of March 31, 2020, the short-term loan of Greenland holdings was 31.719 billion yuan, a year-on-year increase of 6.85%; the long-term loan was 153.879 billion yuan, with a year-on-year growth of 12.07%, and the scale of loan was further increased.
As of the end of the first quarter of this year, the long-term debt of Greenland holdings reached 195.598 billion yuan, and the short-term debt also reached 108.761 billion yuan. The short-term debt accounted for nearly one-third of the total, while the book capital decreased to 78.141 billion yuan. In addition, the sales were not as expected, and the debt of more than 300 billion yuan, making Greenland holdings face no small pressure.
Suspension of trading for secondary mixed reform
For real estate enterprises, the capital chain is the lifeline, cash is king. The high leverage and weak sales growth of Greenfield holdings in the industry is difficult to sustain, which may also be one of the reasons for the second mixed reform after Greenland holdings suspended trading.
On July 21, Greenland Holdings said in the announcement that on July 17, Greenland holdings received the notice from the shareholders of Shanghai real estate and Shanghai urban investment, and Shanghai real estate and Shanghai urban investment were planning matters related to the companys control structure.
According to public data, Shanghai real estate and Shanghai urban investment are the second and third largest shareholders of Greenland holding, with shareholding ratios of 25.82% and 20.55% respectively. Lu Gu Tong holds 3.22% of the shares and CICC holds 2.9% of the shares, which is the fifth largest shareholder. The largest shareholder is Shanghai Greenland investment company (limited partnership), with a shareholding ratio of 29.13%. Shanghai real estate and Shanghai urban investment are 100% controlled by SASAC. In other words, Shanghai SASAC holds 46.37% of the equity of Greenland through Shanghai Urban Investment and Shanghai real estate, far exceeding the largest shareholder of Shanghai Greenland investment enterprise (limited partnership).
According to industry sources, the suspension of Greenland holdings may usher in a second mixed reform. The first mixed reform of Greenland holdings was five years ago. It was considered as a sample of mixed reform of state-owned assets in Shanghai.
According to the news released by the real estate vertical media one real estate on its microblog, Greenland suspended its business this time. After signing the strategic cooperation agreement, a project team was quietly established in CICC to follow up the introduction of strategic investors by Greenland. There are also two enterprises in Shanghai that have expressed their intention to participate. They are all state-owned enterprises under the state owned assets supervision and Administration Commission of Shanghai.
Now boots land. On the afternoon of July 26, Greenland holdings announced that Shanghai real estate and Shanghai Urban Investment Co., Ltd. planned to transfer part of the shares held by Greenland holdings through public solicitation of transferees. The total shares to be transferred shall not exceed 17.5% of the total equity of Greenland. This means that Greenland holdings will start the second mixed reform.
The price of the shares to be transferred this time shall not be lower than the higher of the following two: the arithmetic mean of the daily weighted average price of the 30 trading days before the date of the indicative announcement and the audited net asset value per share of the latest accounting year. It is planned to employ CICC as the financial consultant of the share transfer, and further study and formulate the specific plan for the share transfer in the future. Yan Yuejin, a well-known real estate analyst, told investor.com, in fact, for Greenland, there are more mixed changes. The main reason for the suspension is that it is directly related to the restructuring of Shanghai Urban Investment and Shanghai real estate, and the purpose of suspension is to prevent stock price fluctuation. So the suspension itself is a positive signal. For Greenland, the secondary mixed reform is also in line with the positioning and guidance of its state-owned enterprises; at the same time, from the perspective of enterprise competitiveness, strategic investors may continue to be introduced after the mixed reform, which is of positive significance. (produced by thinking Finance) source: investor.com Author: Ge FanMei, editor in charge: Wang Xiaowu_ NF
The price of the shares to be transferred this time shall not be lower than the higher of the following two: the arithmetic mean of the daily weighted average price of the 30 trading days before the date of the indicative announcement and the audited net asset value per share of the latest accounting year. It is planned to employ CICC as the financial consultant of the share transfer, and further study and formulate the specific plan for the share transfer in the future.