The new industrial city operator China Fortune Land Development Co., Ltd. (China Fortune Land Development, 600340.SH) will hold a 2020 annual performance and dividend briefing on the Shanghai Stock Exchange Roadshow platform on May 18, 2021.
Regarding liquidity constraints and debt overdue risks and other issues that investors are concerned about, China Fortune Fortune Chairman Wang Wenxue said that at present, the relevant intermediary hired by the Creditor Committee of China Fortune Fortune Financial Institution Necessary due diligence procedures are underway; at the same time, the debt committee is actively coordinating and advancing the company’s debt rollover issues, so as to gain the necessary time for the formulation and implementation of the comprehensive resolution plan.
Through accelerating asset disposal and introducing strategic cooperation to carry out self-rescue relief
As of May 12, China Fortune Land Development failed to repay the principal and interest of the debt as scheduled A total of 57.220 billion yuan.
China Fortune Land Development said that in order to resolve the company’s debt risks and accelerate the company’s orderly operation, the company actively sought support from local governments and established China Fortune Land Development Financial Institution’s creditor committees at all levels. Under the guidance and support of local governments, regulatory agencies and debt committees, the following measures have been taken to resolve liquidity and debt overdue risks:
First, actively cooperate with provincial and municipal special classes and debt Committee work to speed up the formulation of comprehensive risk mitigation plans;
The second is to make every effort to ensure the company’s normal production and operation, to ensure stable production and stable employment;
The third is to carry out in-depth communication with creditors, etc., to ensure that there is no borrowing, no pressure on loans, and continuous lending, to extend the maturity of debt, to minimize the company’s financial cash outflow pressure, and to adjust debt maturity reasonably Plan to maintain the overall stability of the debt balance;
The fourth is to actively and conscientiously respond through various measures such as accelerating asset disposal, revitalizing existing resources, increasing asset value, and introducing strategic cooperation. Fully carry out self-rescue relief and debt risk mitigation work.
Market sales and collections are still mainly from the Central Beijing market
China Fortune Land Development said that the company’s early-stage investment layout Most of them are concentrated in the area around Beijing. Since the purchase restriction policy in the market around Beijing in 2017, the company has adjusted its layout and increased itsInvestment in other regions such as the Yangtze River Economic Belt, Guangdong-Hong Kong-Macao Greater Bay Area, etc. Although the business development in other cities has achieved certain results, most of the company’s deployment in other areas is late and is still in the early stage of investment. The company’s limited resources cannot meet the development and construction needs of many industrial new cities, and the company’s more resources are locked in the company’s capital city. area. The company’s investment layout, management, and the unbalanced development of various regions have led to the company’s current market sales and collections are still mainly from the Beijing market. Affected by the restrictions on purchases in the Beijing market and the multiple rounds of the epidemic in 2020, the volume and price of the Beijing residential market have fallen, which not only has a greater impact on the company’s sales and supply and acquisition areas in the Beijing area, but also caused a serious shortage of the company’s real estate business value. Affect the company’s new industrial city payment.
As of the end of 2020, China Fortune Land Development had achieved operating income of 101.209 billion yuan, a decrease of 3.80% from the same period of the previous year, and achieved a net profit of 3.665 billion yuan attributable to shareholders of listed companies, compared with A decrease of 74.91% over the same period last year. During the reporting period, the company achieved sales of RMB 94.06 billion, a decrease of 34.30% from the same period last year.
The business of China Fortune Land Development is divided into two major segments: Industrial New City and related businesses and commercial real estate and related businesses. In 2020, the operating income of China Fortune Industrial New City business is 101.1 billion yuan, the total cost is 84.076 billion yuan, and the operating profit is 8.462 billion yuan; the commercial real estate operating income is 101 million yuan, the total cost is 515 million yuan, and the operating profit loss is 451 million yuan.
Cash flow is under pressure, and investment in the new industrial city has dropped a lot
In addition, the business of China Fortune Industrial Park has a large investment amount, a long business cycle, and a long business cycle. Complex features. The development process involves many links such as regional positioning planning, infrastructure and public facilities construction, land consolidation, investment promotion, and regional comprehensive services. Among them, industrial investment is greatly affected by the overall macroeconomic situation, local investment promotion policies, and investment environment; capital investment in infrastructure construction projects and land consolidation has higher capital requirements.
During the reporting period, the company’s cash flow was under pressure, investment was fully reduced, and the investment in new industrial cities fell more. At the same time, the investment of enterprises entering the park for industrial investment has also fallen sharply, resulting in a large decline in the income of industrial development services in 2020. With the company’s tight liquidity and shrinking investment in new industrial parks, the business development of some new industrial cities will be further affected, and there is a risk of continued decline.
China Fortune Happiness said that it receives moreThe round of epidemics, especially the new round of epidemics from the end of 2020 to the beginning of 2021, has greatly affected the real estate market prices in some areas of the company. In addition, the liquidity risk that the company broke out at the beginning of the year also objectively affected the sales price of real estate in some areas of the company. The company’s inventory depreciation reserves for 2020 have been made more, which will have a greater impact on the company’s performance. In the future, if the company’s real estate sales prices further fall, the company’s corresponding asset impairment will further affect the company’s performance.
China Fortune Land Development has made a total of 9.569 billion asset impairment reserves for receivables, contract assets, inventories, goodwill, and debt investments as of December 31, 2020 yuan. Among them, some accounts receivable and other receivables have a provision for bad debts of 1.81 billion yuan, and a provision for bad debts of 190 million yuan for contract assets, which are mainly located in Nanjing, Gu’an, Fengtai, Dachang, Lai’an, Bazhou In other regions, the provision for inventory depreciation is 7.137 billion yuan, the goodwill impairment loss of Shenzhen Urban Space Planning and Architectural Design Co., Ltd. is 101 million yuan, and the debt investment impairment loss is 330 million yuan; it affects the company’s 2020 attributable to The net profit of listed company shareholders is 8.67 billion yuan.
At the same time, China Fortune Land Development began to carry over real estate projects in 2017 and 2018 that were greatly affected by the national real estate control policies in 2020, resulting in a higher gross profit margin in 2020 than in 2019. A sharp decline. In the future, the company will continue to carry over real estate projects that are greatly affected by the regulatory policies, and the company’s real estate business performance will be further affected.
In response to the risk of performance decline, China Fortune Land Development proposes 5 measures:
(1) In business development Continuing to strengthen the “hematopoiesis” ability, grasp sales, promote payment, and ensure cash flow. The real estate business guarantees the timely delivery of residential buildings with quality and quantity, speeds up the return of funds, and guarantees the achievement of the sales return target; the new industrial city business ensures the realization of the total return target by paying close attention to the payment collection in transit, promoting the incremental payment collection, and accelerating the project sales; At the same time, it combines long and short measures and multiple measures to attract investment, accelerate the implementation of contracted projects, and continue to contribute new cash flow to the company’s development by maximizing resource reserves, strengthening land marketing, market-oriented land supply, and actively promoting platformization; Enrich the industrial service product line, add new investment assistance services, data services, and capital services, integrate internal and external resources, build an industrial development platform, improve external service capabilities, innovate profit models, and create new growth points for the company.
(2) In terms of operation and management, effectively improve the level of operation and management, continue to reduce costs and increase efficiency, and reduce the salary of the core management team and organizeOptimization, business adjustment and other measures to strengthen cost control, strictly control expenditures, and ensure the improvement of the company’s operating efficiency; by clarifying the smallest units of various businesses, classified management, and precise implementation of policies; by sorting out disposal, revitalizing existing assets, and equity cooperation, etc., slimming and shrinking the balance sheet Optimize the company’s asset-liability structure, improve the company’s liquidity and financial status, and ensure the sustainable and healthy development of the company’s business.
(3) In terms of organizational management, strengthen organizational management, improve organizational efficiency, and improve management efficiency. Make every effort to reduce various management expenses, build and activate the organization based on the smallest management unit, further increase authorization, simplify the process, adjust the organizational formation, and improve decision-making efficiency. Stabilize the cadres and backbone teams and maintain the combat effectiveness of the team.
(4) In terms of regional policies, adhere to the promotion of closed management of regional classification and implementation of policies, and give priority to the return of funds for investment and expenditure in the region or project to prevent risks in different regions Or inter-project transmission; according to the market and policy conditions of different regions, find suitable investment opportunities to improve investment efficiency; make every effort to develop regions with a good foundation and quick return, and continue to contribute cash flow to the company; other regions use revenue and expenditure to achieve self-determination. balance.
(5) Continue to focus on the core metropolitan area, continue to improve the new industrial city operation and investment management system in terms of investment control, asset management, and risk management systems; enhance the ability of industrial investment, Leading industrial development and asset lightening are simultaneously promoted, and the comprehensive development and investment capabilities of the park will continue to be improved.