Zhitong Financial APP learned that CICC released a research report that maintained$KWG GROUP (01813.HK)$"Neutral" rating with a target price of HK $2.7. On January 30, the company completed the issue of a 3-year bond with a full guarantee of 700 million yuan, with a coupon rate of 4.5%. It is mainly used for project development and construction, providing some support for its short-term cash flow and boosting investor sentiment. Looking ahead, the bank believes that the company is expected to continue to benefit from corporate credit-side policies, and advises investors to keep an eye on the transactional opportunities brought about by the progress of its debt rescue.

According to the report, as of 1H22, the bank estimated that the company's unsold land reserves were worth about 250 billion yuan and could cover about three years of sales, of which ultra-high-and high-energy cities accounted for about 76%, and the Greater Bay area and the Yangtze River Delta two metropolitan areas accounted for more than 60%. In addition, the company has won the bid for the old village project with a value of about 180 billion yuan, and the bank expects Shuangsha Village (with a value of about 50 billion yuan) to start supply this year. In addition, the company has been laying out commercial real estate for more than 10 years, and 1H22 has opened 10 shopping malls and 10 office buildings, basically located in ultra-high-level and high-energy cities such as Guangzhou (3 shopping malls, 6 office buildings) and Chengdu (2 shopping malls and 1 office building). The bank believes that the company is expected to use high-quality commercial assets as collateral for debt financing.

The bank noted that since 2H21, the company has been active in opening up debt payments and related arrangements, despite continued pressure on operating and financing cash flows. So far, the company has only three dollar bonds extended in the form of an exchange offer, involving about $1.6 billion. In addition, the company also withdrew cash through asset sales and share placements: 2H22 received a net return of HK $1.3 billion and RMB 371 million respectively through the sale of Hong Kong's Kai Tak and Chengdu Tianyu projects, and a net financing of HK $467 million by placing 235 million shares (6.87 per cent of the enlarged total share capital) in December. The bank believes that the debt-transforming posture of enterprises and real controllers is expected to promote its debt-melting rescue process.