Small and medium-sized real estate enterprises have few financing channels
Low cost capital has always been an important survival weight for real estate enterprises operating in high leverage mode, and also a sharp weapon to seize market share.
In the past 10 years, relying on domestic and foreign financing platforms and flexible use of financing window period, some developers have grown into todays top real estate enterprises, which has relieved the pressure to a certain extent. However, for some small and medium-sized real estate enterprises that lack low-cost financing channels, overseas high interest dollar debt is one of the best blood transfusion channels to maintain the operation of enterprises.
Under the epidemic situation, the overseas bond market has been seriously affected. In April, zero bond was issued, which gradually recovered from May to June, and continued to grow in July Pan Hao, a senior analyst at Shell Research Institute, said in an interview with the Securities Daily that the accelerated growth of overseas financing is mainly due to the pressure of real estate enterprises own debt repayment, sales collection and the tightening of external financial environment.
Under the influence of the epidemic situation, the domestic financing environment of real estate enterprises has been loosened. The financing costs of head real estate enterprises, especially central enterprises or state-owned enterprises, are relatively low. The minimum interest rate of the 2.5 billion yuan bonds issued by Vanke in March this year is only 2.6%. Song Hongwei told Securities Daily.
At the moment of increasing financing demand, small and medium-sized real estate enterprises are relatively passive in financing. Domestic financing has a high valuation of the real estate sector and a relatively low interest rate, which is the preferred channel for most real estate enterprises. However, there are more and more requirements and restrictions on the real estate enterprises. Some institutions require the top 50 or top 100 real estate enterprises, and the credit qualification should be above AAA Pan Hao told the Securities Daily that in this way, most small and medium-sized real estate enterprises will be shut out, and they have to choose overseas financing channels with higher interest rates and lower valuations.
30% financing cost exceeds 10% red line
In fact, the upsurge of overseas bond financing began in 2016. According to public data, in recent years, the level of overseas financing interest rate of Chinese real estate enterprises has an overall upward trend, rising from 6.03% in 2016 to nearly 8.6% in 2019.
Since 2020, in the first two months of the first quarter, overseas financing actions of real estate enterprises have been frequent, but the financing cost differentiation is obvious. Some industry analysts told Securities Daily that the overseas financing cost of head real estate enterprises is generally around 5%, but the small and medium-sized real estate enterprises with high debt ratio and poor rating will exceed 10%, or hover between 9% and 12%.
According to the data provided by Zhongyuan Real estate research, the reporter of Securities Daily found that in the total of 142 US dollar debt financing during the year, 44 financing costs exceeded 10%. The total amount of 44 financing transactions was 13.55 billion US dollars, accounting for 30% of the total amount of US dollar financing of real estate enterprises in the year, and most of them were small and medium-sized real estate enterprises, or real estate enterprises that had just landed H shares in recent two years.
From the perspective of the general environment, the interest rate of overseas financing is higher than that of domestic financing for a long time. However, due to the business scale and credit rating of small and medium-sized real estate enterprises, the financing interest rate is generally higher than that of scale real estate enterprises. Pan Hao told the Securities Daily that what is more important is that due to the impact of the epidemic and the severe test of international relations this year, the anti risk ability of small and medium-sized real estate enterprises has been greatly challenged, and the financing interest rate has increased with the increase of risk level.
Behind the high interest rate overseas bond financing, on the one hand, is the re erosion of profits under the background of the industrys gross interest rate in the downward channel; on the other hand, it has to face the exchange rate risk, after all, its change is very uncertain. The above-mentioned insiders told our reporter frankly that two years ago, the exchange loss had already occurred. For example, the net exchange loss of contemporary real estate in 2018 was RMB 205 million, resulting in the net profit of RMB 662 million, which was 19.88% lower than that in 2017. However, in the long run, due to the short-term maturity pressure of most housing enterprises, the impact of short-term exchange rate fluctuations on real estate enterprises is still controllable.
Stable capital chain is an important goal in the second half of the year
At present, the capital chain of large-scale real estate enterprises is better than that of small and medium-sized real estate enterprises. Among them, the capital chain status of large-scale real estate enterprises with the background of central enterprises or state-owned enterprises is better than that of private real estate enterprises. Song Hongwei told the Securities Daily that the capital chain of small and medium-sized real estate enterprises which are concentrated in the three core economic circles in the central and eastern regions is better than that of the real estate enterprises mainly concentrated in the central and western regions.
In order to cope with the possible market changes in the future, most real estate enterprises use financing tools to speed up capital reserves. Zhang Dawei, chief analyst of Zhongyuan Real estate, told the Securities Daily that the enterprises with higher leverage ratio have increased financing pressure recently, but they are accelerating the speed of sales collection in the second half of the year.
From the sales situation of the previous seven months, the cumulative year-on-year growth rate of top 100 real estate enterprises turned positive for the first time this year. The growth rate of single month performance in July showed the largest growth rate in the year, and the market continued to recover strongly. Pan Hao told the Securities Daily that for real estate enterprises, the pressure of sales payment collection is superimposed on the debt repayment peak, and it is expected to increase supply in the second half of the year. It is also not ruled out that the strategy of trading for volume is adopted to seize customer resources.