The impact of the epidemic on the global economy may be the hottest topic this year. Almost all industries have been affected by the epidemic, and the service industry bears the brunt.
According to the news, AMC Theaters, the world's largest cinema chain, faces the risk of bankruptcy (applying for bankruptcy protection does not mean bankruptcy); The three major rating agencies in the world have also been frequently notified to downgrade, involving enterprises from all walks of life.
According to Standard & Poor's report, the energy and retail industries were the most affected, and the real estate industry was affected by the epidemic in about 50 cases, while less than 20 cases were lowered.
Recently, both Standard & Poor's and Fitch downgraded Sunshine 100 to CCC-, and Fitch downgraded Oceanwide Holdings to CCC+. Moody's included R&F and Yuzhou Real Estate in the downgrade assessment, and at the same time downgraded the main credit rating of Taihe Group to Caa 1, and downgraded all guaranteed bonds to Caa2, with a negative outlook.
The epidemic situation has become a catalyst for the degradation of housing enterprises, and the invisible problem has already appeared.
It is obviously biased to blame the downgrade entirely on the epidemic.
On February 24th this year, the epidemic situation in China was still at its peak, and China's overseas development of advanced unsecured notes still received an investment-grade rating of A-.
Following the confirmation of the "BBB-" rating by Country Garden in September last year, on March 20th this year, Country Garden Services also received the "BBB-" rating from Fitch, keeping the investment-grade bottom line.
It can be said that the epidemic situation only played a catalytic role in demotion, making the existing problems exposed faster.
At the previous performance meeting and investor meeting, most housing enterprises said that the impact of the epidemic this year was limited, and even few housing enterprises lowered their sales targets. Therefore, the major international rating agencies downgraded the rating of housing enterprises, more likely because of concerns about the financial performance of housing enterprises.
In early April, Standard & Poor's issued a document saying that the pressure faced by real estate enterprises in China was exposed long before the epidemic: weak sales, lower-than-expected income, and a large number of them were rated as junk. China's real estate market has gradually changed from an early incremental market to a stock market. Housing enterprises that failed in early expansion and were unfavorable in transformation are faced with the dilemma of poor income and heavy debts.
In Moody's rating method for residential construction and property development, the interpretation of Caa rating points out that such housing enterprises have "extremely radical land acquisition strategy", which is reminiscent of Taihe Group's massive sale of projects to meet liquidity demand last year.
Coincidentally, in the above-mentioned "such real estate enterprises" downgrade incident, financing uncertainty or refinancing risk is the main consideration.
Taihe Group, which attracted people's attention last year because of its massive sale of assets, was downgraded to CCC/Caa level this year. In Moody's downgrade review, it was mentioned that Taihe has been actively managing liquidity. From March 2065438 to September 2009, the funds raised from the sale of real estate projects were/kloc-0.06 billion yuan to make up for the refinancing demand, and whether it can continue to successfully fill the funding gap is the focus of continuous attention in the future.
The Pain of Expansion and Financial Health —— Financial Performance of Housing Enterprises under Downgrading
Judging from the financial situation of Sunshine 100, the annual operating income in 20 19 was 8.32 billion yuan (with wind standardized report, slightly adjusted compared with the enterprise announcement, and the following financial data are the same), which increased by 9.47% year-on-year, and the revenue growth seemed to be relatively stable.
The operating income of Sunshine 100 increased from 2.95 billion yuan of 20 1 1 to 7 1. 1 100 million yuan of 20 104. It only took three years, but there was no obvious growth for five years.
In the case of weak income growth, the cost of sunshine 100 has not been well controlled. As can be seen from the chart of operating profit, the operating profit of Sunshine 100 began to decline from 20 14, and remained on the edge of balance after 20 15, both of which were losses. This problem has been hard to hide.
Turning to cash flow, starting from 20 15, sunshine 100 repaid loan cash flow exceeded the company's total operating income for four consecutive years. Looking only at the 20 19 semi-annual report, the net cash flow generated by operating activities is 9 10/00000 yuan, while the cash flow spent by financing activities is as high as1920000 yuan.
What made the company unable to make ends meet was the 2.37 billion yuan obtained from the sale of subsidiaries, which made the net cash of the company's investment activities reach 65,438+0,965,438+0 billion yuan, which basically offset the cash expenditure raised by the company.
Obviously, the sale of subsidiaries cannot be a long-term stable source of income for the company, and how to continuously fill the cash gap is the most important thing.
When there is no profit potential, it may be a wise choice to "reduce fat and lose weight" and strive to restore a healthy financial situation. On March 6, 2020, Sunshine/Kloc-0 sold the equity of its subsidiary and transferred the shareholder's loan again, thus obtaining about13.34 million yuan, of which 6160,000 yuan was used to repay the loan and 249 million yuan was used for general working capital.
In the recently released 20 19 financial report, Sunshine 100 reduced debt13.53 billion yuan, which exceeded the debt increase12.02 billion yuan for the first time since listing. The interest paid exceeded 2 billion yuan for three consecutive years, and it was as high as 2.87 billion yuan in 20 19. In terms of profit, the consolidated net profit reached 3.22 billion yuan, including 265.438+0.2 billion yuan from the sale of subsidiaries.
If we only look at the profit before non-recurring profit and loss items, it is128 million yuan in 20 19, the highest since 10, and the highest gross profit margin since 20 14, which may mean that the company's operation has begun to improve.
However, Sunshine 100 will have to face about1380,000 dollars of interest and 400 million dollars of debt due this year, which is about 3.7 billion yuan, and its total cash and cash equivalents are only 2.44 billion yuan.
As mentioned earlier, the epidemic is not the root of the company's problems, but a catalyst. In the period when cash was king in overseas capital markets, the cost of financing in dollars was high, and the downgrade had been traced.
If we compare Country Garden, which holds the investment-grade bottom line, ignore the scale and focus on the financial data of the enterprise itself, it will have certain reference value.
Country Garden's cash flow from operating activities has been positive since 20 16, but even in negative years, its absolute value rarely exceeds the net profit, usually about half of the net profit. This means that even during the expansion period, Country Garden did not invest too much.
After two years of continuous cash flow operation in 20 16 and 20 17, Standard & Poor's upgraded the rating of Country Garden from BB to BB+ at the beginning of 20 18. Turning to the financial report of 20 19, after deducting the property development expenditure of 976,543.8+300 million yuan, the net remaining operating cash flow is1467 million yuan. Compared with the repayment of bank loans of 93.53 billion yuan and bonds of 7.65 billion yuan, the company's cash and cash equivalents at the beginning of the year were 228.34 billion yuan, about twice the amount used to repay debts.
Obviously, Country Garden is the beneficiary of the rapid growth of the real estate market in China, and it has more buffers in the face of this epidemic. However, in recent years, Country Garden's revenue growth, profit margin improvement and low capital expenditure are the performance of the company's business adjustment.
If the explosive growth of real estate before is compared to a gamble, then the housing enterprises that lost the gambling should leave as soon as possible and carefully consider how to develop rationally and healthily.