Xinli has not repaid bank and other borrowings (excluding corporate bonds) with a weighted average real interest rate of 9.8%.
In addition, on August 26 and October 9, this year, Sony has issued a private debt financing with a total principal amount of US$170 million, with an interest rate of 12.5%.
Valuation Challenge
The debt topping and growth rate slowed down, and Xinli urgently needed to go public to explore financing channels and reduce financing costs.
New Force does not hide the desire for money. In the past, Sony Power funded property development projects primarily through pre-sale properties, retained earnings, bank loans, trust financing and other borrowings. In the future, Sony is expected to generate more liabilities to complete projects under construction and operate future projects.
After listing with other housing companies, the funds will be used for business development. Xinli said that the financing amount will be used for the development and construction of existing projects (including the construction cost of property development projects), and some of the existing interest-bearing loans for repayment of project development. And for general working capital.
Krui Securities said that for housing companies, listing is only the first step, and the IPO financing amount is only enough to get a piece of land. The main purpose is to open overseas financing channels. The National Development and Reform Commission has previously regulated the overseas debt issuance of housing companies, which will have a certain short-term impact on the initial debt of new listed real estate enterprises. However, in the long run, the policy will be adjusted according to the situation. After the listing, the overseas capital market will open, which will help the housing enterprises to obtain more capital support.
Many capital market participants believe that Xinli pricing may not be as expected. An industry insider said that Xinli has been working hard to promote listing or to make concessions on prices. For Xinli, the focus is not on the amount of financing, but on opening financing channels.
Zhongtai International (Hong Kong) strategist Yan Zhaojun told the front news that Xinli is currently in a state of high debt listing, which will affect the shareholding response to a certain extent. He further added that from the past year, the difficulty of listing domestic enterprises in Hong Kong has not increased. For Xinli, the timing of the listing is now appropriate, but the valuation will be discounted again. Because the real estate market is now entering the stock market, the growth rate is slowing down, and the financing of non-leading companies is difficult. The funds are more inclined to new stocks such as biotechnology, medicine, property management, etc. The exchange also welcomes such stocks.
Personnel Interlude
Change to the capital field, Sony needs a professional team to escort. On the market, the personnel changes disrupted the original rhythm.
On October 17, according to the official disclosure of Xinli, Wang Yan, vice president and chief financial officer of the group, resigned. Regarding the reasons for Wang Yan’s resignation, Xinli did not specifically disclose it. He only stated: “The company accepted Wang Yan’s resignation as the vice president and chief financial officer of the group, and asked relevant personnel to do a good job.”
Wang Yan has worked in ABC, Shanghai Pudong Development Bank, Helensburg and Yanlord Group, and is mainly responsible for capital operation and investment and financing. People close to Xinli said that it is Wang Yan’s capital experience and contacts that Xinli is looking at. This year 3