Description of the event
On December 22, the company successfully issued 800 million yuan of ultra-short-term financing notes, with a coupon interest rate of 6.8% and an issuance period of 270 days.
Incident comments
Successful domestic financing shows investors' trust, and may benefit from industry risk appetite and credit side repairs earlier. On December 22, the company successfully issued 800 million yuan of ultra-short loans, with a coupon interest rate of 6.8%, and an issuance period of 270 days, mainly to replace the 800 million yuan “21 Jinke Real Estate SCP002” due on December 25. At a time when the overall capital chain of private housing enterprises is being tightened, the company is leading its peers in successfully issuing ultra-short loans. On the one hand, it shows investors' recognition of the company's long-term value and confidence in surviving “difficulties”. On the other hand, it also relieves pressure on the maturity of the company's debts, effectively relieves the capital market and homebuyers' various concerns, and helps to rebuild credit and revive the enthusiasm for home purchases. Looking at a higher level, recently, the supervisory authorities clearly supported housing enterprises to properly finance the interbank and exchange markets. The Central Bank and Banking Insurance Regulatory Commission even issued a document “encouraging banks to carry out M&A loan business in a steady and orderly manner, focusing on supporting high-quality real estate companies in mergers and acquisitions and high-quality projects of difficult large-scale real estate companies”. Risk appetite and credit side repair or spread to private sector leaders in the lower back. The company is expected to benefit at an earlier stage. The successful issuance of this ultra-short finance is a clear proof.
Some of Jinke Service's shares were sold and introduced into war investment to improve financial security. On December 16, the company announced the transfer of 144 million shares of Jinke Services (22% of the total share capital) to investors under Boyu Investment, with a share transfer amount of HK$3,734 million. After the transaction was completed, the company still held 30.33% of Jinke Service's shares, making it the largest shareholder and controlling shareholder. On the one hand, this transaction introduced internationally renowned investment into Jinke Services, further improving Jinke Services' corporate governance structure and enhancing its long-term development capabilities; more importantly, the return of large sums of capital in one go clearly increased the flexibility of the company's on-hand capital allocation, and also demonstrated the company's confidence and determination to maintain financial security and steady operation.
Pay attention to repayment and suspend land acquisition, and the pressure on centralized maturity of open bonds is limited. Despite the recent decline in sales growth due to the impact of the industry environment, sales amount and sales area in the first November reached 174.2 billion yuan (-10.8%) and 1.87 million square meters (-5.0%) respectively; furthermore, the company continued to focus on repayment, with the repayment rate in the first three quarters as high as 98.1%.
After the third quarter, the company's land acquisition intensity declined markedly, taking the initiative to reduce flow to cope with industry fluctuations. The company adheres to the “one steady, two reduction, three increases” strategy and began debt reduction and restructuring at an early stage. As of the end of 21Q3, interest-bearing debt was 87.6 billion yuan, a pressure drop of nearly 10 billion yuan from the beginning of the year; the net debt ratio/balance ratio excluding advance receipt/short-term cash debt ratio was 73.2%/68.5% /1.5 respectively, maintaining the “green range” status. Furthermore, the company will disclose domestic and foreign bonds due before mid-2022 on a limited scale, and the distribution is relatively uniform. There is no huge amount of centralized maturity pressure, and the company is more flexible in dealing with it.
The financing environment continues to improve, and the credit recovery of lower-back leaders is speeding up. The financing environment continues to improve, and high-quality market leaders are expected to benefit from industry risk appetite and credit side repairs at an early stage; as steady growth policies are gradually implemented, industry fundamentals may see an inflection point around 202Q2, and the company is expected to win in the competition. The company's net profit is expected to be 74/81/9 billion in 2021-2023, respectively, and the corresponding PE is 3.2/2.9/2.6X, maintaining the “buy” rating.
Risk warning
1. There is uncertainty about the decontamination situation in non-core cities;
2. There is uncertainty about when gross margin bottomes out;
3. There is uncertainty about the maturity of off-balance sheets, non-standard debts, etc.