High leverage and high debt were once the magic weapon for the rapid expansion of real estate companies, but now they have become the weapon to burst the balloon.

After the “three red lines”, some high-leverage real estate companies have to bear huge debt repayment pressure in order to comply with regulatory requirements. Among them, real estate companies that hold a large number of non-residential real estate Why not.

They either hold large amounts of commercial real estate, build cultural tourism projects, or bet on industrial parks. The task of reducing leverage is even more difficult for them. Whether these former star real estate companies can turn dangers into bargaining and go through the cycle, “Prism” will pass the “Real Estate Companies Money Difficulties” series to see where they go.

is the first article in this series, about China Fortune.

This article is from WeChat official account:Prism (ID: lengjing_qqfinance), author: Chun-Fang, editor: Li Chaoren, original title” China Fortune debt robbery: Wang literature and peace, who bear who? “, the title picture comes from: Visual China


“It is said that Hedong for thirty years and Hexi for thirty years. It is only six years, and the river is gone.” Li Gang is an “old” employee who has been in China Fortune for more than seven years, recalling 2016 At the company’s annual meeting in Hainan, he still reminisces about the grand occasion of “seafood and beer”, but now, “it is thankful to be able to get a full salary at the end of the year, and the year-end award is not arrogant at all.”

After the festival, the debt problem of China Fortune Land Development continued. On February 26, China Fortune Land Development (600340.SH) announced that the company’s subsidiaries have added a total of 5.817 billion yuan in principal and interest of overdue debts, including banks. Debt forms such as loans, trust loans, offshore bonds, etc., as ofWith hundreds of billions of funds lying on the book of China Fortune Land Development, the energetic Wang Wenxue is also wandering in the capital market. In addition to real estate, he also controls Black Bull Food.(That is Visionox) and many other listed companies, and established Zhihe Capital to spend a lot of money to invest in new energy vehicles, smart travel, OLED and other industries.

Now, according to China Fortune’s pre-holiday announcement, the amount of financing principal and interest to be repaid at maturity is 55.9 billion yuan, excluding the net cash flow of financing-37.1 billion yuan after the support of major shareholders; the company’s monetary capital balance is 23.6 billion yuan, Among them, all kinds of restricted funds are 22.8 billion yuan, and only 800 million yuan can be used.

“They said that the period at the end of 2020 is too torturous. They are struggling with the scheduling of capital positions every day. They have to connect with the finances of the various parks and projects underneath, explain to hundreds of financial institutions, and talk to the government and the government. The relevant departments of financial supervision report that there are many things, and they often work overtime all night.” Before the Spring Festival, several of Li Gang’s old colleagues who worked in the financial department of China Fortune Fortune Headquarters finally resigned because of “unfinished work”.

Money is the biggest lifeline of China Fortune Land Development. Not only is the financial department staff unable to support it, but the financial chiefs are also so busy that they “collapse” and are struggling to deal with their creditors. At the company meeting on February 2, Wang Wenxue said frankly that at the beginning of the meeting he pulled Wu Zhongbing, the vice president of Huaxia Fortune in charge of finance, and later he pulled Jiang Wei, the professional deputy general manager of the financing center, and Jiang Wei also opened the meeting later. No more, I sent Fan Zheng, the senior manager of the financing center, and in the end, Fan couldn’t open it.

China Fortune Land Development’s debt is huge. According to the 2020 mid-year report, its total financing amounted to 203.591 billion yuan, of which the bank loan balance was 46.560 billion yuan, the ending balance of bonds and debt financing instruments was 88.99 billion yuan, and the balance of other financing such as trust asset management was 68.04 billion yuan; in addition, its At the end of the period, the company’s external guarantee amounted to 155.837 billion yuan, of which 155.238 billion yuan was guarantee to its holding subsidiaries.

There are huge interest expenses under huge debts. The financial report shows that the weighted average cost of China Fortune Finance is 7.96%, of which the average interest cost of bank loans is 6.12%, the average cost of bonds and debt financing instruments is 7.38%, and the average interest cost of other financing such as trust asset management is 10.15%.

As the most important source of repayment and cash cows, residential real estate sales have been sluggish for years and hit new lows repeatedly. Last year, China Fortune Land Development’s real estate sales were onlyEnter the strategic cooperation means, implement the normal plan in phases, and strive to reach a win-win related plan as soon as possible, and make every effort to maximize the protection of the fundamental interests of all creditors.

“The translation of this statement means: creditors, don’t push too quickly, or you won’t be able to live if I die.”Wang Ping is a business manager of Zhongrong Trust. He told the author Said that the current so-called wars and asset sales are all afterthoughts, and the top priority is to talk about debt extension and replacement.

According to a foreign media REDD report on February 18, China Fortune Land Development plans to renew its 25 domestic bonds totaling 46.9 billion RMB for 3 to 5 years, but the plan will face resistance from some investors because the plan does not provide Sufficient upfront cash repayment.

In the short term, China Fortune Land Development needs to stabilize its creditors, but in the long term, the return of funds is still fundamental. In fact, China Fortune Land Development has set up a revitalization team to dispose and revitalize existing assets. For example, in 2020, it has promoted some projects to enter the revitalization process, realized a return of 6.07 billion yuan, and carried out four large-scale residential promotion activities to increase sales returns. The amount is about 3.5 billion yuan.

“In the past few years, Huaxia started to cooperate with other real estate companies to develop land around Beijing, but the proportion is not high. If the value of this part of the goods continues to be transferred and co-developed, a lot of funds can be released.” Li Gang told the author According to the statement, China Fortune Land Development had previously been heavily warehoused around Beijing and currently has a large amount of land reserves, “but the current market around Beijing is still relatively bleak, which affects the speed and valuation of this part of the asset disposal.”

In Wang Ping’s view, compared with real estate companies such as Tahoe and Fusheng that had been thundered before, Wang Wenxue has been relatively courageous in dealing with the debt crisis this time. “Because Tahoe is doing high-end real estate, the boss feels that the pre-sale price set by the local government is too cheap, so wait and wait again, delaying the opportunity, and the same is true when introducing the war.” A former high in Tahoe Group. Guan said to the author. Tahoe CEO Huang Qisen seemed indecisive when dealing with assets.

“The debt crisis is most afraid of the stampede effect. As soon as I heard that this company was going to be finished, dozens or even hundreds of financial institutions went crazy to snatch the company’s assets. As a result, you took the official seal and I took the house. He took the property rights. In the end, no one was able to completely dispose of this asset, and the company could not continue to operate normally. In the end, all the games were lost, and all parties lost.” Wang Ping told the author, “Wang Wenxue No. In a short time, we coordinated with the local government, communicated with the largest creditors such as Ping An and ICBC, and brought in the major regulatory authorities to immediately convene the creditor committee, which stabilized the position in time and prevented multiple creditors from fighting each other and forming a stampede. The chaos of effect”.

Actually, the “expansion” problem mentioned by Wang Wenxue has already begun to “scrape” after China Fortune Land Development first encountered a crisis in 2018 and introduced Ping An Group as a second shareholder.

Ping An introduced a new management team headed by Wu Xiangdong, the former head of China Resources Land. After Wu Xiangdong became the CEO of China Fortune Land, he drastically abolished business such as industrial towns. The expansion of new projects and new areas also requires strict Financial accounting, the “bloat” problem has since been curbed.

In November 2018, China Fortune Land Development’s industrial town group layoffs on a large scale, and the entire group was eventually disbanded. Except for the backbone of the business and the existing urban business departments, all social recruitment staff were abolished, and school recruitment was arranged. Other groups; in March 2020, China Fortune Land Development has carried out a new wave of layoffs and regional mergers.

Undoubtedly, the safe entry has given China Fortune Happiness, a local private housing company in Langfang, which has a “curssy” atmosphere, a new look. At least in terms of the expansion of personnel and business, it quickly paused or even stopped. The reverse button, however, has also become the beginning of another “expansion”.

Success is safe, and failure is safe

After Ping An entered China Fortune Land Development, in addition to the industrial real estate led by Wang Wenxue, it tried to make China Fortune Land Development vigorously develop commercial real estate, long-term rental apartments, pension real estate and other businesses, and put Wu Xiangdong and other senior management teams of China Resources Land in charge. This strategy of moving away from the original main business of China Fortune Land Development did not meet expectations.

“Commercial real estate investment is large, and returns are slow. For example, a commercial real estate project of China Fortune Land Development in Wuhan cost more than 10 billion yuan. In addition to construction and operation, the amount of funds is huge. There are several similar projects across the country, China Fortune Land Development. The financial pressure is even greater.” A former China Resources Land executive told the author that China Fortune Land Development’s commercial real estate after Ping An took over was also a major factor that dragged down its funds.

According to the financial report, in the first three quarters of 2020, China Fortune Land Development had a net outflow of 25.073 billion yuan in operating cash flow, of which land acquisition expenditure was 19.849 billion yuan, industrial new towns and related businesses reached 9.646 billion yuan, and commercial real estate and related businesses reached 102.03 billion yuan. 100 million yuan, more than the new industrial city. In the first three quarters of 2019, all of its land acquisition expenditures were industrial new towns and related businesses, reaching 17.373 billion yuan, and commercial real estate expenditures were still zero.

“Conscientiously speaking, after Ping An became the second shareholder, it provided Huaxia Fortune with financingIt provides a lot of convenience, but it is necessary to repay the principal and interest. Ping An’s investment in Huaxia Fortune and financing of it is not a good deed. “The above-mentioned former China Resources Land executives believe that these limited financing should have been concentrated to do one thing, either to increase the acquisition of residential real estate, pay close attention to sales, or focus on the development of several close to mature industrial parks. , Form a stable cash flow, “As a result, Ping An established another share and invested a large sum of limited funds in commercial real estate.”

However, it’s not that simple who is dragging the other down. It may be a marriage full of question marks.

On February 4, Xie Yonglin, managing director and co-CEO of Ping An Group, stated that China Fortune Land Development is part of Ping An’s 8 trillion yuan investment portfolio, involving 18 billion yuan in equity investment and 36 billion yuan in on-balance sheet bonds. With a risk exposure of 54 billion yuan, the group will make provisions for related investments in a timely manner according to the process.

Xie Yonglin, Managing Director and Co-CEO of Ping An Group Company

Wang Wenxue did not admit defeat. After deploying the company’s annual business plan on February 18, he expressed confidence: “China Fortune Happiness will definitely be reborn from the ashes and make history again!” However, there are more people around. It seems, “It is better to forget the rivers and lakes with each other”.

Zhang Zhen joined China Fortune Land Development three years ago and was responsible for the first-level development of land in Jingyang Park in Xi’an. At the beginning of the year, the company’s layoffs and regional mergers caused his Xi’an area to be merged into the Zhengzhou area. Colleagues were also laid off, and only he was lucky enough to stay.

“In the next situation of the company, I don’t know if the next wave of layoffs will come. Even if there are no layoffs, I am still considering whether to leave.” Zhang Zhen told the author that his salary has declined in the past two years. In the past six months, I have basically been in a situation of no business to do. “The boss talks about loyalty and morality, but I also have to consider my livelihood and career development.”

Andthe peace of the same bed in different dreams seems to beDown-hearted. So far, when explaining the reasons for entering China Happiness, Ping An still regards the new industrial city and the business model that supports the development of local governments as an important part. However, a person close to China Happiness told the author that Ping An plans in 2018 When investing in Huaxia Fortune, Huaxia introduced the company’s business to Ping An. Ping An was actually not very interested in the industrial park. They said they couldn’t understand it. What they wanted to know more urgently was the value of land and the sales of houses.

Since Ping An took over, China Fortune Land Development has established dual headquarters. Ping An’s Shenzhen headquarters in the south is responsible for promoting commercial real estate, and Wang Wenxue’s northern headquarters basically belongs to two business lines, each managing a share.

Many times, the honeymoon and the cold war are only on the front line. In October last year, when Wang Wenxue attended a keynote speech at the Shanghai Stock Exchange, he was only talking about his industrial real estate throughout the whole process. He did not mention a word about the commercial real estate that his company vigorously promoted.

(Li Gang, Wang Ping, and Zhang Zhen in the text are all pseudonyms)

This article is from WeChat official account:Prism (ID: lengjing_qqfinance), author: Chun-Fang, editor: Li Chaoren