Caifin News, November 11th (Reporter: Li Jie) Recently, the stock price trend of China Fortune Land Development (600340.SH) has been quite 'charming', and it hit the limit down today.

From October 28th to November 7th, nine consecutive trading days of limit up, the stock price reached a new high in nearly a year. Today, China Fortune Land Development opened with a limit down, closing at 3.62 yuan per share. The trading volume at the close was 1.0401 million lots, with a turnover of 0.377 billion yuan and a turnover rate of 2.67%.

Regarding the reason for its limit down, Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, told reporters, "The company's stock price has risen significantly in the short term, and the stock price may experience a pullback afterwards, especially under the influence of the broader market, the stock price fluctuations may be even greater. The fall after a rapid rise in the short term is an adjustment to the previously high gains."

Previously, the stock price of China Fortune Land Development continued to rise, with multiple consecutive announcements of abnormal trading fluctuations and severe abnormal trading risks.

The announcement shows that the deviation value of the stock price of China Fortune Land Development accumulated to 20% during the period from November 5, 2024, to November 7, 2024. And during the twenty-six consecutive trading days from September 26, 2024, to November 7, 2024, the accumulated deviation value reached as high as 200%.

As of November 7th, China Fortune Land Development has had nine consecutive trading days of limit up. On November 8th, the stock price of China Fortune Land Development continued to rise significantly, closing at 4.02 yuan per share, reaching a high of 4.04 yuan intraday, setting a one-year high.

In response, China Fortune Land Development stated that, through the company's self-inspection and verification with the controlling shareholder and actual controller, the company's operations are normal, and there are no significant undisclosed matters that should be disclosed.

China Fortune Land Development's actual controller, Wang Wenxue, responded to the inquiry letter regarding the abnormal stock trading volatility by stating that as the actual controller of China Fortune Land Development, there is no undisclosed major information related to China Fortune Land Development, including significant asset restructuring, major transaction matters, and there is no situation of buying or selling China Fortune Land Development's stocks during the period of abnormal stock trading volatility.

The capital trend data shows that block orders flow in, driving up the stock price of China Fortune Land Development. Bai Wenxi believes that the main reasons behind this are, firstly, the change in market sentiment, with the recent overall positive atmosphere in the domestic stock market, especially the stronger expectations for the recovery of the real estate industry, which has boosted market investment confidence; secondly, the policy influence, as the regulatory authorities recently introduced a series of measures to stimulate the economy, including support for the real estate market, boosting investors' confidence in the real estate market.

From a performance perspective, China Fortune Land Development reported profits in the third quarter and introduced a debt-to-equity swap plan, which has been positively received by the market and may have triggered the stock price to hit the limit up. In addition, the actual controller, Wang Wenxue, plans to increase the company's shareholding by no more than 12 million yuan, a move that signals the company management's recognition and confidence in the company's value, having a positive impact on the stock price. Bai Wenxi mentioned this in an interview with reporters.

However, for its stock price to rise so sharply in the short term, analysts believe that whether there is solid performance support for such an increase, and whether there are other reasons behind the stock price volatility, further investigation is still needed.

In terms of debt-to-equity swaps, to further promote debt restructuring, China Fortune Land Development launched the 'Replacement Band' plan in October.

It is reported that the plan intends to introduce part of the financial debts of Langfang state-owned enterprises as a condition. These financial debtors are required to provide additional financing to Langfang state-owned enterprises or their designated entities. The debt scale of this implementation plan is estimated to be around 20 billion yuan, and the final result will be based on the confirmation by both the financial debtors participating in the exchange band and the Langfang state-owned enterprises.

According to China Fortune Land Development's third quarter report for 2024, as of September 30 this year, the company has completed the financial debt restructuring of 190.029 billion yuan, accounting for approximately 87% of the financial debt amount. The balance of domestic enterprise bonds is 27.495 billion yuan, a decrease of 9.635 billion yuan from the end of 2023; the US dollar bonds of the company's overseas indirect wholly-owned subsidiary have completed the restructuring and delivery.

In addition, the "Happiness Selection Platform" and "Happiness Preferred Platform" built by the company's subsidiary companies for equity offset debt amount to approximately 19.9 billion yuan, and trust offset debt exceeding 11 billion yuan has been fully implemented.

Meanwhile, China Fortune Land Development is also actively advancing the asset sale work under the 'Debt Restructuring Plan.' Currently, Yongqing Industrial New City, Guangyang Industrial New City Platform Company, and Southern Headquarters Asset Package Transaction are all progressing related arrangements in accordance with the transfer agreement.

"Although China Fortune Land Development has made some progress in debt restructuring, its financial situation still faces challenges. While its stock price has rebounded recently, the decline still exceeds 97% compared to its historical high." A real estate industry analyst told reporters.

The financial report shows that in the first three quarters of 2024, China Fortune Land Development's revenue was 13.912 billion yuan, a year-on-year decrease of 21.79%; a net loss of 2.241 billion yuan. In the third quarter, it has already turned losses into gains, with a net income of 2.6 billion yuan.

In the third quarterly report, China Fortune Land Development stated that the company will do its utmost to deliver buildings, promote debt restructuring, stabilize production and operation, and continue to focus on 'industry + park,' develop comprehensive industrial development capabilities centered around industrial investment promotion, and transform fully into an industrial new city service provider based on its own industrial park resources.

"Despite some positive factors of the company, it may still be premature to conclude that China Fortune Land Development has completely emerged from the debt quagmire. The company's medium to long-term value depends not only on whether numerous industrial parks can break through reliance on land finance but also on its ability to achieve income diversification and establish a long-term stable sustainable development model." The analyst mentioned above believes.