Today (September 20), the Hong Kong stock market suffered a “Black Monday”, and the real estate sector fell across the board. Among them, the stock price of Sony Holdings (Group) Co., Ltd. (stock abbreviation “Sony Holdings”, stock code: 2103.HK) plummeted. The lowest fell by more than 90% to only HK$0.37 per share. As of the close, Sony Holdings closed at 0.5 Hong Kong dollars per share, and the current market value is 1.8 billion Hong Kong dollars in total. The daily market value has evaporated by over 12.3 billion Hong Kong dollars.
Not only did the stock price plummet, according to Wind data, the senior notes (40557.HK) with a coupon rate of 8.5% a year due in January 2022 issued by Sony today also had a purchase price of only $50 per sheet. And another purchase price of US$53 per piece. The most recent selling price on June 21, 2021 was US$93.25 per piece, and today’s selling price dropped by more than 43% from the price on June 21.
In addition, a senior US dollar note (40413.HK) with a coupon rate of 9.5% per annum due in October 2021 issued by Sony Holdings also has a purchase price of only US$60 per ticket, which is in contrast to another US$63 per ticket. Purchase price. The most recent selling price on June 21, 2021 was US$97 per piece, and today’s selling price dropped by more than 35% from June 21.
This afternoon, Sony Holdings issued an announcement stating that the company’s shares and debt securities (stock codes: 40557 and 40413) have been temporarily suspended from trading on the Stock Exchange from 3:38 pm on September 20, 2021 (Monday). A notice containing inside information is pending.
As of press time, Xinli Holdings has not issued a new announcement in response to the stock price plummet.
On the news, according to media reports, on September 18, the personnel department of the company verbally notified all employees of the group headquarters to reduce salaries. Among them, the level of vice president was reduced by 70%, the level of general manager was reduced by 60%, and the level of director was reduced by 50%. In addition, employees of the regional company of the Xinli Holding Group confirmed that their area has not yet received a salary reduction notice.
In this regard, on September 20, the reporter also called the official website of Sony Holdings to disclose the contact information, but it has not yet been connected.
In addition, Sony’s short-term bonds are facing greater pressure. According to the 2021 mid-year report of Xinli Holdings, as of the end of June 2021, Xinli Holdings has 75.428 billion yuan in current liabilities. In the next year, Xinli Holdings will mature over 13 billion yuan in debt.
Be put on the negative watch list
Also on September 20, United Ratings International Co., Ltd. (“United International”) included the international long-term issuer rating of Sony Holdings’BB-‘ on the negative watch list.
United International also included the issuance debt rating of the senior unsecured U.S. dollar bill’BB-‘ issued by Sony Holdings as a negative observation.
This negative observation reflects the deterioration of Sony’s ability to obtain financing channels and the increase in refinancing risks. In addition, as of the end of June 2021, 34% of Sony’s land reserves are located in the same province (Jiangxi Province), which may make the company face more stringent supervision.
United International also stated that it will consider downgrading Xinli’s credit rating if the following situations occur: Xinli actively replenishes its land bank, resulting in a continuous increase in the level of financial leverage measured by the interest-bearing debt/capital ratio to higher than 70% or EBITDA interest coverage ratio Continue to drop below 2.0 times, and/or its operating performance has dropped significantly or liquidity has weakened. In view of the fact that Sony is included in the rating negative watch list, there will be no upgrade of the rating. Any rating actions on Sony may trigger similar rating actions on its US dollar bills.
Prior to this, on September 15, Fitch Ratings adjusted the outlook of Sony’s long-term issuer default rating from “stable” to “negative” and confirmed the rating as “B+”. At the same time, Fitch confirmed that Sony’s senior unsecured rating is “B+” and the recovery rate rating is “RR4”.
Fitch Ratings stated that the “negative” outlook reflects that Sony’s debt financing channels have narrowed and the execution risk of its high-turnover strategy has continued to rise. Rating confirmation is based on the company’s sufficient liquidity, viable refinancing plan, and continuously improving leverage. The latter is measured by the net debt (including guarantees to joint ventures)/adjusted inventory ratio, at the end of the first half of 2021 This is 47%, which is a decrease from 52% at the end of 2020.
Affected by the downturn in investor sentiment, Sony’s ability to enter the offshore debt capital market has been significantly weakened. The company has three offshore bonds totaling US$694 million, which will mature in October 2021, January 2022, and June 2022, respectively. Bonds due in 2022 are being traded at a discount of 20%-25%, which means that Sony Holdings may need to use cash to repay these three bonds.
Fitch believes that Xinli Holdings’ strategic execution risks are rising because the company has slowed down land acquisitions in the first half of 2021, and the repayment requirements of its maturing bonds will reduce the financial flexibility of replenishing land banks. In view of its high turnover rate business model, Fitch believes that Xinli Holdings will not be able to reduce the scale of land acquisitions in the long term.
It is worth noting that an earlier “distress letter” about Xinli Holdings spread.The content pointed out that in the process of fundraising for the listing of Sony Holdings, because of the need for funds, the chairman of Sony Holdings Zhang Yuanyuan was a fraud group composed of five professional groups consisting of sponsors, underwriters, financial usury groups, market value management teams and fund managers.After going through a series of arrangements, he was in danger.
On July 9, Xinli Holdings issued a statement stating that recently, the company was concerned about the spread of “Sinli Real Estate Boss Distress Letter” and similar related remarks on the Internet. The content of the information is purely fictitious and malicious. For the above-mentioned actions that seriously damage the company’s image and rights and interests, the company has reported to the Chinese public security organs to investigate the legal responsibility of the rumors and protect its legitimate rights and interests through other legal channels.
According to the official website of Xinli Real Estate, Xinli Holdings was founded in 2010. After more than ten years, it has been promoted from a regional leader to one of the top 30 real estate companies in the country. In terms of strategic layout, Sony Holdings focused on potential cities in Jiangxi, the Yangtze River Delta, the Greater Bay Area, central and western core cities, and other regions in China, and successfully entered 50+ cities. On November 15, 2019, Sony Holdings successfully landed in the Hong Kong capital market and became a young Hong Kong listed Chinese real estate company. Return to Sohu to see more
.