SMM: in order to launch the national real estate discount promotion program, at 10: 00 p.m. on September 6, Xu Jiayin, chairman of China Evergrande (03333.HK), led a group of senior executives to hold a marketing conference overnight. The Financial Associated Press reporter learned exclusively that the marketing conference superimposed monthly working meetings, which did not end until around 1: 00 a.m. on September 7.
For Evergrande's latest price reduction promotion measures, market analysts believe that under the new "345" financing rules, this may be intended to take advantage of the traditional "gold, nine and silver ten" opportunity to expand market share and reduce debt ratio.
At the interim results meeting on August 31 this year, Xia Haijun, president of China Evergrande, said that he aims to reduce interest-bearing liabilities by an average of 150 billion yuan in each of the next three years. And increase sales and sales payback, can further increase the scale of sales, thereby reducing debt.
At the marketing conference held overnight, Xu Jiayin announced that from September 7 to October 8, Evergrande had a 30% discount across the country in order to collect the "gold, nine and silver ten". It also revealed that the monthly sales of "Golden Nine Silver Ten" will sprint 100 billion yuan in two months.
At the same time, Xu Jiayin delegated authority and gave the head of Evergrande headquarters and regional company departments and above the authority to sign and approve an additional 4% discount. In addition, it is also clear that efforts will be made to push new goods to ensure the opening of more than 40 new projects as scheduled.
Evergrande has also become the first real estate company to announce a large-scale promotion plan after regulators piloted the new financing rules.
According to Evergrande China News, as of June 30, 2020, Evergrande had total assets of 2.2991 trillion yuan and total liabilities of 1.9826 trillion yuan, with an asset-liability ratio of 79.8% excluding advance receipts.
In fact, after the regulatory authorities tried out the new financing rules, some real estate companies made it clear that they would take "reducing debt" as the primary goal, and have begun to deal with the new financing rules. Among them, R & F Land, which stepped on the "three red lines", made it clear that it would reduce its liabilities by selling assets and other means, and the scale of the assets to be sold is expected to be about 12 billion yuan.
In addition to some large housing enterprises began to respond to the external, some small and medium-sized housing enterprises are also paying close attention to the impact of the new financing rules on themselves.
The chief financial officer of a Hong Kong listed real estate company headquartered in Shenzhen told the Financial Associated Press that the company has begun to draft an analysis report on the quantitative impact of the "three red lines" on the company, including the calculation of the impact of the "14th five-year Plan" on its enterprise. and the impact on the project company and countermeasures.
An insider of another listed real estate company based in Chongqing said that the head of the company's financing is studying the potential impact of the "three red lines" on the company and how to deal with it.
According to reports, in order to control the scale of interest-bearing liabilities of real estate enterprises, the regulatory authorities plan to issue new financing rules, manage real estate enterprises according to "red-orange-yellow-green" four files, and set up "three red lines", specifically, the asset-liability ratio is more than 70% after excluding advance receipts; the net debt ratio is more than 100%; and the cash-to-debt ratio is less than 1 times.
On August 20, the Central Bank and the Ministry of Housing and Construction held a forum in Beijing with real estate enterprises such as country Garden, Evergrande, Vanke, Rongchuang, Zhongliang, Poly, Xincheng, China Shipping, overseas Chinese Town, Greenland, China Resources and Sunshine City. At the meeting, regulators listened to the opinions of housing enterprises and expressed the hope that housing enterprises would control their debts and not continue to increase leverage quickly.
A reporter from the Financial Associated Press learned exclusively from people familiar with the matter that at the forum on August 20, regulators required some real estate companies to submit monthly balance sheets and reduce their liabilities by the end of September. At present, some real estate enterprises have submitted their monthly balance sheets in August in accordance with the requirements of the regulatory authorities.
In addition, a number of people participating in the symposium of the Ministry of Housing and Construction of the Central Bank told reporters that the new rules on financing for real estate enterprises, "three red lines", set the standard by temporarily referring to the 2019 annual report data, rather than the 2019 semi-annual report as previously reported by the media.
Tianfeng Securities divided 50 housing enterprises with higher sales according to 2019 financial data, according to the three standards of "excluding the asset-liability ratio of accounts received in advance of 70%, the net debt ratio of 100%, and the currency short-debt ratio of 1." there are 14 real estate enterprises that have stepped on the "three red lines" at the same time. Including Evergrande, Rongchuang, Greenland, Zhongliang, Huaxia Happiness, R & F Real Estate, Rongxin, Kaisa, Sony Holdings, Shoukai shares, Huafa shares, Jinhui, Taihe and so on.
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