Economic Observer Network reporter Chen Yueqin On the evening of January 28, at the end of the last trading day of the Year of the Ox, listed companies in the A-share real estate sector intensively released performance forecasts.
According to incomplete statistics from the Economic Observer.com, as of 14:00 on January 29, a total of 64 A-share listed real estate companies have released performance forecasts, of which more than 20% of the real estate companies have released significant pre-loss signals, and another 14 real estate companies have continued to lose money. 15 real estate companies pre-decrease (net profit fell by more than 50%), only 10 pre-increase or slightly increase, in addition, 12 real estate companies turned losses into profits.
27 real estate companies lose more than 69.3 billion yuan in advance
Among the 64 real estate companies that have announced their performance forecasts, 13 real estate companies have their first losses since listing in 2021, namely: Sunshine City (000671.SZ), Blu-ray Development (600466.SH), China Fortune Land Development (600340.SH) , Songdu Shares (600077.SH), Huayuan Real Estate (600743.SH), World Union Bank (002285.SZ), Zhongtian Finance (000540.SZ), Caixin Development (000838.SZ), Beautiful Real Estate (000667) .SZ) etc.
Sunshine City suffered its first loss since its listing in 1996. According to the performance forecast, in 2021, the net profit attributable to the parent company of Sunshine City is expected to lose 4.5 billion to 5.8 billion yuan, a year-on-year decrease of about 185% to 210%; Loss of 7.3 billion-8.6 billion yuan, a year-on-year decrease of 240%-266%.
It is worth noting that the previous financial report showed that in the first three quarters of 2021, Sunshine City’s net profit attributable to its parent was about 2.913 billion yuan, a year-on-year increase of 6.23%. In the fourth quarter, both the net profit attributable to the parent company and the deducted non-net profit suffered substantial losses.
Blu-ray Development estimates that the net profit loss attributable to the parent in 2021 is about 12.037 billion yuan, and the non-net profit loss is about 11.273 billion yuan. In the same period of 2020, the profit is 3.3 billion yuan and 3 billion yuan respectively.
The biggest loss is China Fortune Land Development. According to the announcement, in 2021, the net profit attributable to the parent company of China Fortune Land Development is expected to lose 33.1 billion to 39.1 billion yuan; In the same period in 2020, the net profit attributable to the parent company was 3.665 billion yuan, and the non-net profit deducted was about 3.277 billion yuan. The estimated loss in 2021 is about 10 times the net profit in 2020.
In addition, the net profit of Meihao Real Estate in 2021 is expected to lose 2.5 billion to 3.6 billion yuan, Huayuan Real Estate’s net profit is expected to decrease by 480 million to 690 million yuan, the World Union Bank’s net profit is expected to decline by 850 million to 1.25 billion yuan, and Songdu shares are expected to lose money. 300 million to 400 million yuan, Caixin Development is expected to lose 580 million to 780 million yuan.
14 real estate companies continued to lose money in 2021, including Jiakaicheng (000918.SZ), Xinhua United (000620.SZ), Aoyuan Meigu (000615.SZ), and Kaaba Development (600322.SH). Among them, New Hualian is expected to lose about 2.94 billion-3.72 billion yuan in 2021, which is the largest continuous loss.
Based on this calculation, as of press time, the net profit of 27 A-share real estate companies in 2021 has suffered a large loss, with a total pre-loss of about 69.3 billion to 80.3 billion yuan.
Another 15 real estate companies announced profits, but their net profit fell sharply year-on-year, including Sunshine Shares (000608.SZ), Zhongnan Construction (000961.SZ), Daming City (600094.SH), Dima Shares (600565.SH) , OCT A (000069.SZ), Shoukai Shares (600376.SH), etc.
OCT A is expected to make a profit of 3.19 billion-4.13 billion yuan, a year-on-year decrease of 67%-75%; Zhongnan Construction is expected to make a profit of 708-2.123 billion yuan, a year-on-year decrease of 70%-90%; the net profit of Shoukai shares is about 600-900 million yuan , a year-on-year decrease of 71%~81%; Rongsheng Development is expected to make a profit of 100 million-150 million yuan, a year-on-year decline of about 98%.
The performance of 10 real estate companies increased, including Vantone Development (600246.SH), Shahe (000014.SZ), Yu Kaifa (000514.SZ), Xindazheng (002968.SZ) and so on. Another 12 real estate companies will turn losses into profits in 2021, namely Joy City (000031.SZ), Tahoe Group (000732.SZ), Pearl River Shares (600684.SH), Jingneng Real Estate (600791.SH), etc.
As an early public debt default, Tahoe Group handed over a transcript of turning losses into profits. According to its performance forecast, the net profit attributable to shareholders in 2021 is expected to be 101 million-131 million yuan, compared with a net loss of 4.999 billion yuan in the same period in 2020.
Loss for different reasons
According to incomplete statistics, the main reasons for the substantial pre-loss of 27 real estate companies include operating losses, impairment provisions, asset disposal and increase in financial expenses.
Huayuan Real Estate, Zhongtian Finance, Blu-ray Development, Songdu Co., Ltd., Sunshine City, Rongsheng Development and other real estate companies have pre-lost results because of the fact that real estate sales were lower than expected. Gross profit from real estate sales declined and net realisable value was lower than cost, resulting in an operating loss.
Blu-ray Development’s net profit attributable to the parent in 2021 is expected to be a loss of 12.037 billion yuan, of which 4.394 billion yuan is caused by operating losses.
Blu-ray Development explained in the announcement that the main reasons for the operating loss were: first, due to overdue debts and tight funds, which affected the construction progress of the projects planned to be delivered during the year and failed to deliver on time, which led to a decrease in the recognition of real estate business revenue compared with the previous year. About 18.842 billion yuan, a year-on-year decrease of 47.37%; second, the industry market is expected to decline in the second half of the year, and sales are difficult, so they have to cut prices and sell them, resulting in a decline in gross profit or even a loss.
Another reason for Blu-ray Development’s loss is the provision for impairment. Blue Light Development stated that based on the impact of current liquidity risks on future real estate sales, an impairment loss of about 6.909 billion yuan has been accrued, mainly for inventory depreciation.
As a top20 camp, Sunshine City’s 2021 annual performance has fallen sharply, which has also attracted industry attention.
Sunshine City explained that there are two main reasons for the substantial pre-loss in operating performance: first, the corresponding inventory depreciation reserves were made based on the principle of prudence; Lower volumes, resulting in lower operating profit.
In addition, Sunshine City stated that the recurring profit and loss after non-tax deduction is relatively large, because its property company Sunshine Zhibo has exchanged shares with Wanwuyun, resulting in a net profit after tax of 2.5 billion yuan attributable to shareholders of the listed company, which is a non-recurring profit and loss.
It is worth noting that it is also the provision for impairment. The World Union Bank said that in 2021, it will have a significant impact on performance due to the provision for impairment of some projects receivable by housing companies. “One of the major customers has difficulty in capital turnover. , there has been a situation where the commercial acceptance bill is overdue and not honored.”
As early as September 16, 2021, the World Union Bank issued an announcement saying that the World Union Bank has business relations with Evergrande Group. It provides new house agency sales services for Evergrande Group and charges corresponding commissions, but due to Evergrande Group’s capital turnover Difficulty, performance is greatly affected. According to the announcement data at that time, as of August 31, 2021, the balance of bills receivable between World Union Bank and Evergrande Group was 551 million yuan, and the balance of accounts receivable was 694 million yuan, totaling 1.245 billion yuan.
World Union Bank disclosed in its 2021 performance forecast that as of December 31, 2021, the company’s balance of receivables from this customer was about 1.266 billion yuan, of which accounts receivable was about 811 million yuan, and other receivables were about 0.35 yuan. RMB 100 million, and the outstanding commercial acceptance bill is about RMB 420 million.
“As the real estate industry fluctuates, other real estate companies also experience financing difficulties and tight capital chains, and the company will face the risk that accounts receivable, notes receivable and other receivables cannot be recovered in a timely manner.” The World Union Bank predicts that such Credit-impaired receivables totaled approximately RMB 222 million.
In the first three quarters of 2021, the World Union Bank achieved an operating income of 4.475 billion yuan and a net profit attributable to the parent of 113 million yuan, a year-on-year increase of 265%. In only one quarter, it changed from a large profit to a large loss.
Nanjing Wole Home Furnishing Co., Ltd. (603326.SH) is expected to reduce its net profit attributable to its parent by RMB 120 million to RMB 150 million in 2021, mainly due to the provision for credit impairment of receivables from Evergrande Real Estate and China Fortune Land Development Co., Ltd. About 377 million yuan.
In addition, one of the reasons for the pre-loss of real estate companies such as China Fortune Land Development, Songdu Co., Ltd., and New Hualian is the increase in financial costs.
China Fortune Land Development stated that in 2021, financial expenses will increase significantly, which will increase the loss margin. First, due to the increase in the completion, handover and carry-over of real estate stock projects during the period, the projects that can be used for interest capitalization have dropped sharply, resulting in current expense financing. The interest has increased significantly; the second is because “most of the principal and interest of the loan failed to be repaid on time”, as of December 21, 2021, the total amount of .
The reasons for the increase in the financial expenses of New Hualian are similar to those of China Fortune Land Development. With the increase of completed projects and the decrease of projects under construction, the number of projects that meet the conditions for interest capitalization decreases, resulting in an increase in expensed interest.
On January 29, the Shanghai Stock Exchange and the Shenzhen Stock Exchange quickly issued regulatory inquiry letters to companies with large pre-losses such as Blu-ray Development, Sunshine City, and China Fortune Land Development, requiring the corresponding companies to disclose the reasons and rationality for the large impairment provision in the current period, and explain Whether the accrued amount is accurate and appropriate, and whether there is an untimely or insufficient early accrual.
At the same time, for real estate companies with operating losses and large increases in financial expenses, the regulatory authorities also require them to disclose the reasons and rationality for the sharp decline in the company’s revenue and gross profit margin, and whether there is a trend or risk of further decline; Changes in the annual capitalization rate of financial expenses and their impact on financial expenses; supplementary disclosure of the debt resolution progress the company has made so far, and what measures the company plans to take in the future to improve liquidity and profitability.
In addition, the inquiry letter issued by the Shenzhen Stock Exchange to Sunshine City also mentioned that the amount of non-recurring profits and losses of Sunshine City in 2021 is relatively large, and the performance forecast said that it was mainly caused by the exchange of shares between Sunshine Zhibo and Wanwanyun. The Shenzhen Stock Exchange required Sunshine City to explain the main content of the above-mentioned equity swap, the progress of the transaction implementation, the time and basis for the recognition of relevant profits and losses, etc.
Copyright Notice:The above content is the original work of “Economic Observer”, and the copyright belongs to “Economic Observer”. Without the authorization of the “Economic Observer”, reprinting or mirroring is strictly prohibited, otherwise the legal responsibility of the relevant actors will be investigated according to law. For copyright cooperation, please call:[010-60910566-1260].