As the “boss” of Henan real estate company, the current market value of CCRE Real Estate is less than RMB 4 billion. (Image source: Adobe Stock)
[Look at China September 11, 2021](Look at a comprehensive report by Chinese reporter Ding Xiaoyu) Recently, a letter fromHenan JianyeReal Estate Group’s “Help letter”Heat transfer in the network. The main content of the letter for help showed that, due to the double blow of the flood and the epidemic, Henan Jianye urged the provincial party committee and the provincial government to coordinate the local repayment of more than 5 billion arrears. The news triggered market volatility.
According to a report by Tencent News, on the evening of September 9th, Jianye Group confirmed the authenticity of the help letter, and said that the online help letter not only truly reflected the difficulties faced by the company, but also proposed to provide relevant assistance policies for the company. .
It is reported that this letter for help is called “Report on Major Risks and Crisis in Enterprises and Requests for Assistance and Rescue”, and it is submitted to the Henan Provincial Party Committee and the Provincial Government. It was submitted by Jianye Group in mid-August and was submitted on August 15. Obtained instructions from the governor every day.
The content of the help letter shows that since July, due to the dual impact of the flood and the epidemic, CCRE’s business development has suffered serious losses, and major risks and crises have emerged, with a cumulative economic loss of more than 5 billion yuan (RMB, the same below).
Jianye Group urges the Henan Provincial Party Committee and the Provincial Government to take the following 4 extraordinary measures to help Jianye tide over the difficulties:
The first is to repay as soon as possible various types of payments (over 5 billion yuan) owed to CCRE for various reasons; the second is to classify and deduct and postpone the value-added tax and income tax of CCRE’s companies; the third is to allow the delayed delivery of some of CCRE’s construction projects ; Fourth, to allow Jianye to delay payment of part of the land payment for six months to one year.
CCRE claims that it is no longer a single real estate company, but has developed into a comprehensive enterprise with real estate, prefabricated intelligent manufacturing, property, cultural tourism, commerce, hotel, agriculture, technology, etc. as its main businesses. In 2020, its revenue will be 125.6 billion yuan. , Paying taxes of 8.6 billion yuan, ranking second among enterprises in the province. Once the company stops working, it will cause millions of people to lose their jobs and increase the risk of bank breach of trust, which may cause serious social consequences and even a nationwide negative reaction.
Jianye Group responded to the media on the evening of September 9, stating that the documents circulated on the Internet were only part of the content, the information was incomplete, and it was not circulated by the company. However, Jianye Group did submit relevant reports to the government and the content was true. Jianye Group stated that its direct economic losses and accumulated losses are consistent with online documents.
According to public information, Jianye Group currently has 28,000 employees, and there are 1.2 million industrial workers in more than 300 projects under construction.
It has four listed platforms: Jianye Real Estate, Zhuyou Smart Manufacturing, Jianye New Life, and Zhongyuan Jianye. Affected by this news, the Hong Kong stock CCRE Real Estate fell 5.39% on the day to close at HK$1.58.
As of August, the total contracted sales of CCB was 38.63 billion yuan, the same year-on-year, and only 55.18% of the annual performance target was achieved.
In the previous mid-term performance communication meeting, CCRE Real Estate has lowered its contract target sales for 2021 from the original 80 billion yuan to 70 billion yuan.
In the first half of the year, benefiting from factors such as the increase in carryover area, CCRE Real Estate’s revenue increased by 56.4% year-on-year to 20.357 billion yuan, corresponding to a net profit of 729 million yuan attributable to the parent, a year-on-year increase of 0.3%. The gross profit margin was 17.9%, a decrease of 5.8 percentage points from 23.7% in the same period in 2020. “The overall property sales gross profit margin fell from 21.1% in the first half of last year to 15.7%.” The same period in 2020 was already at a low point.
As the “boss” of Henan real estate company, the current market value of CCRE Real Estate is less than RMB 4 billion. At the same time, for CCRE’s US dollar debt due in 2024, the price of 1 US dollar is less than 0.7 US dollars.
As of June 30, CCRE Real Estate has interest-bearing liabilities of 28.293 billion yuan and short-term liabilities of 8.526 billion yuan. The company’s monetary funds in the same period have decreased by 51.93% compared with 2020 to 10.872 billion yuan.
In the first half of 2021, the net debt ratio of CCRE Real Estate increased from 56.8% in 2020 to 92.6%, approaching the boundary of regulatory requirements. The debt-to-asset ratio excluding advance receipts was 87.2%; the cash short-term debt ratio was 1.93. A red line.
Netizens commented on this letter of help from Jianye that the meaning of “coercion” is very obvious, and it is clearly the second Evergrande.
On September 24, 2020, a letter of help from Evergrande Group circulated online, stating that Evergrande’s current interest-bearing debt is as high as 835.5 billion yuan, and the cash flow may break, which may cause financial system risks, affect employment, people’s livelihood and social stability. Therefore, I hope the relevant departments can help.
Editor in charge: Jingxin Source: Look at China
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