Original title: [depth] 50 real estate enterprises mismatch these real estate enterprises during the financing period with greater risk of default! Source: same policy and capital management
Affected by the COVID-19 epidemic in 2020, China's economy accelerated its decline, the central bank launched quantitative easing, and the financing environment of real estate enterprises was greatly improved compared with last year. According to the monitoring of Tongze Research Institute, the total financing of 40 housing enterprises from January to August 2020 was 650.98 billion yuan, an increase of 19.66 percent over the same period last year. In the relatively loose monetary environment in China, housing companies have accelerated financing to alleviate financial difficulties. Recently, the popular "345" new rules will once again tighten the scale of financing, and it is rumored that regulators have set "three red lines" on the scale of interest-bearing debt of real estate enterprises. Although there are no official documents, real estate financing restrictions have indeed been implemented. For capital-intensive real estate enterprises, the future of the real estate industry is full of uncertainty. At this time, for the reasonable control of investment and financing, have a superior ability to control funds, which will affect how real estate enterprises get through the financial difficulties.
In order to understand the capital status and investment and financing capacity of listed real estate enterprises, Tongze Research Institute takes the financial data of 50 listed real estate enterprises in 2020 for the first half of the year as the basic data, focusing on two indicators: the matching degree of financing term and the risk exposure ratio of financing term. Look at each financing strategy and the level of financing term risk.
Table 1 match of the financing period of 50 listed real estate enterprises in the first half of 2020
Data description:
1. The sample real estate enterprises in this report are listed real estate enterprises with real estate development as their main business in the mainland, and as of September 11, 2020, a total of 172 listed real estate enterprises have released semi-annual reports for 2020.
2. Based on the data of the semi-annual report in 2020, the list excludes 50 listed real estate enterprises whose operating income is less than 10 billion and whose proportion of real estate business is too low.
3. calculation formula: short-term funds = current liabilities-contract liabilities, short-term assets = current assets-inventory, matching degree of investment and financing = short-term funds / short-term assets
4. Note: in the formula for calculating short-term funds this year, "contractual liabilities" is used instead of "prepaid payments". The reason: the Ministry of Finance requires domestic listed enterprises to implement the new income standards from January 1, 2020. The main changes and effects of the implementation of the new income guidelines on listed housing enterprises are as follows: the new "contract liabilities" statement account is added. Reclassify the obligation of customers to transfer goods to customers for consideration received or receivable from "prepaid" items to "contract liabilities" items.
5. The data are derived from the announcements of listed companies and are collated and released by Tongze Research Institute.
Interpretation of the same policy
First of all, let's take a look at the practical significance of the investment and financing matching index for real estate enterprises. Because of the characteristic that financing serves investment, then the term of financing should match the term of investment, which we call the matching of financing period. Ideally, short-term assets should be collected through short-term funds, while long-term assets should be collected through long-term funds. We use the ratio of short-term funds to short-term assets to measure the matching of the financing period.
Figure 1: schematic diagram of term structure of investment and financing of real estate enterprises
The judgment criteria of the matching degree of the investment and financing period of real estate enterprises are as follows: the ratio of short-term funds to short-term assets is 1, indicating that the company is implementing a term-matching financing strategy (investment and financing matching); the ratio of short-term funds to short-term assets is less than 1, indicating that the company is implementing a sound financing strategy (short-term investment and long-term financing); the ratio of short-term funds to short-term assets is more than 1, indicating that the company is implementing a radical financing strategy (long-term investment and short-term financing).
According to the data compiled by Tongze Research Institute, the average ratio of short-term funds to short-term assets of 50 listed housing enterprises in the first half of 2020 is 1.15, indicating that the overall matching degree of the financing period of large real estate enterprises tends to be long-term investment and short-term financing. Among the 50 listed housing enterprises, there are 26 housing enterprises with a matching degree greater than 1, 24 enterprises less than 1, and 0 enterprises equal to 1. More real estate companies adopt radical financing strategies.
From the perspective of short shot and long integration, Huaxia is happy., Binjiang Group, Kaisa Yip, Poly, Xuhui, Dayue CityThe matching degree of investment and financing of real estate enterprises is less than 1, indicating that these enterprises implement a more robust financing strategy, and the short-term assets are larger than short-term debt, and the pressure of short-term debt service is less.
From the perspective of long-term investment and short-term financing, Guangyu Development ranks first.The ratio of short-term capital to short-term assets is 2.76, which is a typical case of long-term investment and short-term financing, indicating that the company has adopted an overly aggressive financing strategy and will face debt repayment risk.
The highest state of housing enterprise financing is to realize the matching of investment and financing, but in reality, it is very difficult for enterprises to do so. The value close to 1 indicates that the matching degree of investment and financing of real estate enterprises is relatively high. We can see that the construction of Central and South ChinaJinke shares, Zhengrong Real Estate, Midea Real Estate, Poly Real Estate, Metro Development and Country Garden Holdings all belong to enterprises with a high degree of matching.
In general, when the financing period is equal to or longer than the investment period, there is no financing term risk because the investment can be recovered before the maturity of the debt, while when the financing period is shorter than the investment period (that is, long investment and short financing), enterprises have the risk of financing term to a certain extent. If the sound financing strategy loses the financing efficiency of the enterprise, then the radical financing strategy will bring potential financing risk to the enterprise. The more radical the financing strategy of the enterprise is, the higher the financing term risk is.
In order to facilitate quantification, we use the financing term risk exposure ratio to reflect the risk of the mismatch of the financing term. In fact, there is a positive relationship between the financing risk exposure ratio and the financing term risk.
Table 2 risk exposure ratio of financing term of 50 listed real estate enterprises in the first half of 2020
Data description:
1. The sample real estate enterprises in this report are listed real estate enterprises with real estate development as their main business in the mainland, and as of September 11, 2020, a total of 172 listed real estate enterprises have released semi-annual reports for 2020.
2. Based on the data of the semi-annual report in 2020, the list excludes 50 listed real estate enterprises whose operating income is less than 10 billion and whose proportion of real estate business is too low.
3. Calculation formula: financing term risk exposure ratio = (short-term funds-short-term assets) / total assets x 100%
4. The data are derived from the announcements of listed companies and are collated and released by Tongze Research Institute.
Interpretation of the same policy
From the point of view of the arrangement and distribution of financing term exposure ratio of 50 listed housing enterprises, it is basically consistent with the arrangement and distribution of financing maturity matching degree, and some housing enterprises are slightly different before and after ranking, which also proves the positive relationship between the two indicators. Among the 50 listed real estate enterprises, the financing term risk exposure ratio of 24 real estate enterprises is negative, indicating that these real estate enterprises are relatively conservative in the management of short-term funds and have implemented a relatively sound financing strategy. There is no case that the financing term risk exposure ratio is 0, which means that the housing enterprises have properly controlled the scale and matching degree of financing, which does not cause a waste of the efficiency of the use of funds, nor does it increase the financing risk of the company; there are 26 housing enterprises whose financing term risk exposure ratio is greater than 0, with a maximum value of 34.46%, indicating that most real estate enterprises adopt a more aggressive financing strategy and invest short-term funds into long-term investments.
From the perspective of enterprises, Huaxia Happiness, Kaisa, Binjiang Group, Xuhui, Poly Real EstateThe financing term risk exposure of real estate enterprises such as Jindi is less than 0, indicating that these enterprises implement a more robust financing strategy, and the short-term assets are larger than short-term debt, and the pressure of short-term debt repayment is less. Take Kaisa as an example, the short-term capital in the first half of 2020 is 87.5 billion yuan, while the short-term assets are 131.99 billion yuan, which can fully cover the short-term capital needs. Among them, after deducting contract liabilities from the short-term debt, there are only a small amount of short-term loans and other accounts payable totaling 59.4 billion yuan. In terms of short-term assets, after deducting inventory, there are a lot of monetary funds, advances and other receivables, totaling more than 104.5 billion yuan.
In the housing enterprises with large financing term risk exposure rate, Evergrande, Guangyu Development, Jinmao, R & F, Hejing Pacific and other real estate enterprises have larger financing term risk exposure rate.
Evergrande, for example, has obviously adopted an aggressive financing strategy, with its ratio of short-term funds to short-term assets rising all the way from 2015 to the first half of 2020, reaching a record peak of 2.48 in the first half of 2020. It shows that there are serious long-term investment and short-term financing.
Fig. 2 match degree and risk exposure rate of China Evergrande Group's financing period from 2015 to 2020H
Data source: Tongze Research Institute
As Evergrande's short-term funds are far larger than short-term assets, it is faced with a certain financing term risk. The average risk exposure ratio of Evergrande's financing term was 22% in the first half of 2015-2020, while the index reached 34.46% in the first half of 2020, meaning that about one-third of its long-term assets rely on short-term funds. due to the weak liquidity of long-term assets, there is debt repayment risk. Country Garden Holdings and Vanke, both large real estate enterprises, have a financing term exposure ratio of 2.69% and 6.83% respectively, and their financing term exposure ratio is relatively small, which means that the financing term risk of these two real estate enterprises is less than that of Evergrande.
In addition, R & F real estate is another typical real estate enterprise with a high financing term risk exposure rate, with a financing term matching ratio of 2.0 and a risk exposure ratio of 21.07% in the first half of 2020.
Fig. 3 match degree and risk exposure ratio of R & F real estate investment period 2015-2020H
Data source: Tongze Research Institute
On the whole, R & F real estate investment matching degree and financing term risk exposure ratio have increased year by year since 2016. in recent years, R & F real estate has repeatedly faced difficulties such as huge debts, urgent bonds and declining sales revenue. in addition to the scale and growth rate, R & F's debt and capital situation has been the focus of the industry for a long time. As the local property industry enters a period of adjustment, more and more real estate enterprises begin to pay more attention to the concept of sound development, while the net operating cash flow of R & F real estate has been negative for seven consecutive years, and the cash short-debt ratio is near the bottom of the industry. In 2019, R & F real estate's net debt ratio reached 198.9%, and suffered a credit rating downgrade.
Affected by the epidemic this year, R & F's hotel business has suffered a demand shock. According to the mid-2020 report, the turnover of property investment, hotel operation and other income is 2.76 billion yuan. Last year, R & F's investment property and hotel combined operating income of 8.24 billion yuan, close to about 10% of its revenue, the impact is significant this year. However, the property sales revenue of R & F Real Estate is still qualified, with an operating income of 33.59 billion yuan in the first half of the year, including property sales turnover of 30.831 billion yuan, a net profit of 3.92 billion yuan and a gross profit margin of 29.6%. It is worth mentioning that R & F's net asset-liability ratio was 177% in the first half of the year, down 22% from 199% at the beginning of the year, indicating that R & F has continued to control leverage. However, judging from other indicators of balance sheet, R & F's asset-liability ratio is still high and deleveraging pressure is still there. And if according to the "345" financing rules, R & F "three red lines" will step on the line.
The Tongze Research Institute believes that the smaller the financing term risk exposure ratio is, the smaller the enterprise's short-term capital ratio is and the smaller the financing term risk is, but it also means that its ability to use active funds for operational investment is weaker. The greater the financing term exposure ratio, the greater the short-term capital ratio is larger than its short-term asset ratio, the greater the financing term risk, the weaker the liquidity of long-term assets, and there is a certain debt repayment risk. However, for enterprises, especially the relatively slow turnover of real estate enterprises, the financing term exposure ratio is too large or too small is not conducive to the healthy development of enterprises, the ideal short-term capital ratio is roughly the same as the short-term asset ratio.
However, it should be pointed out that enterprises also need to consider the national financing policy and financing environment when making investment and financing term matching decisions. In the first half of this year, the financing environment is relatively loose, and most housing enterprises increase their financing efforts. This factor may also cause short-term funds of real estate enterprises to exceed short-term assets. However, the real estate industry, which is itself a "short-term financing and long-term investment", has increased the risk of the industry to a certain extent. Therefore, the purpose of the new "345" rule issued by the central bank is to stabilize the leverage of developers and control that interest-bearing liabilities will not grow too fast. (the "345 financing new regulation" is that the regulatory authorities set up "three red lines" for the scale of interest-bearing debt of real estate enterprises. According to the different situations of the "three red lines" touching the line, the pilot real estate enterprises are divided into "red, orange, yellow and green". The gear is set as the threshold for the growth of the scale of interest-bearing liabilities, and the upper limit is increased by 5% for each reduction of one gear. )
Figure 4: three, four, five, new rules.
As far as the real estate enterprise itself is concerned, how to enlarge the "capital leverage" and "operating leverage" is the core business model, among which, magnifying the "capital leverage" ensures the rapid scale expansion of the housing enterprise and forms the potential salable value in the future. the core of "operating leverage" is to control costs, which promotes the rapid conversion of inventory into cash flow by improving the internal operating efficiency of real estate enterprises, so for housing enterprises with rapid expansion characteristics. The "three red lines" must be high, and restricting the financing of such enterprises will certainly cause financial risks. Under this background, real estate enterprises should keep sober, develop at an appropriate speed, raise funds reasonably, grasp the appropriate degree of investment and financing, and guard against the risk of mismatch of investment and financing periods.