Record Of Survival Of Small And Medium Enterprises: Increasing Debt Pressure And Liquidity Dilemma

Because of poor performance has long been wearing ST hat housing prices Silver billion shares, recently once again plunged into financial quagmire.

In November 26th, Silver billion announced that 50% of the shares of Shenyang project were transferred to Biguiyuan, and the price was 690 million yuan. As a result, Silver billion shares will be completely withdrawn from the project. 10 days ago, the bank announced that the 712 million stake held by Xiong Jikai (17.67% of the company's share capital) had been frozen for reasons unknown. Previously, the controlling shareholder of the company continued to face liquidity crisis.

This is the fourth well-known housing companies who have disclosed liquidity problems since the middle of this month. Prior to this, due to the arrears of purchase and payment of the project, the upper group was put on the court by the two shareholders' investment. Due to the failure to disclose a number of debt default issues, Yihe real estate and chairman He Jianliang were issued a warning letter by the China Securities Regulatory Commission. The major shareholders of GREE real estate were also frozen shares because there was no such increase in the shares of the repurchase minority shareholders.

According to the data of the people's court's bulletin network, more than 400 legal entities of real estate development and operation have gone bankrupt this year, 100 more than the average in previous years, most of them are small and medium-sized enterprises. This seems to be negligible compared with the 20 10000 real estate development companies in the country.

But analysts pointed out that the well-known Housing enterprises began to appear liquidity crisis, exposing the whole industry chain of funds iceberg. In twenty-first Century, the economic report also learned that in recent years, a large number of small housing enterprises have been unable to raise funds from public channels and can only finance through private lending. As these housing enterprises are mainly located in the three or four tier cities, as the shed changes to cool down, these enterprises will soon face a survival battle.

Housing enterprises Liquidity Dilemma frequent

The decline path of Silver billion shares is traceable. In 2017, Silver billion shares entered the auto parts industry through the two reorganization. However, due to the large initial investment in the new business, and the progress of the real estate business is not smooth enough, the problem of the capital chain of the company soon emerges. According to the announcement of Silver billion shares, by the end of 4 2019, the company's debt of 2 billion 430 million yuan could not be liquidated, all of which were short-term loans and current liabilities within one year.

In this process, because the controlling shareholders and related parties occupy too much money and can not be solved in a short time, from May 2019 onwards, the Bank of ST shares the hat. Because of this incident, "failed to fulfill its duties and fulfill the obligation of good faith and diligence", 8 top executives of the bank have received regulatory letters from the SFC.

Since then, Silver billion shares are also not very stable. Semi annual report shows that in the first half of 2019, the bank achieved 3 billion 861 million yuan of revenue, down 23.20% compared to the same period last year, and net profit of -2.19 billion yuan, down 153.76% from the same period last year. The reason is that carry over income has been reduced, and there are more equity items sold in the same period last year.

In September of this year, due to the lack of timely revision of the performance notice and the occupation of non operating capital, many of the executives, including silver billion shares, Ningbo Silver billion Holdings (the controlling shareholder of Silver billion shares), and Xiong Xuqiang, including Chairman of Bank of China AG, were condemned and criticized by the Shenzhen Stock Exchange.

In October, the creditor Zhejiang zhong an installation Co., Ltd. applied for "unable to repay debts due to maturity and obvious lack of solvency", and applied to Ningbo intermediate people's court for reorganization of the bank's billion shares. Before the freeze, a number of bank accounts and shares have been frozen.

Yihe real estate also has default. A warning letter released by the SFC recently revealed that He Jianliang, the real estate and its real controller, had a number of irregularities in terms of information disclosure and agreed commitments. According to statistics, Yihe real estate currently has 9 default debts, totaling about 2 billion 150 million yuan, and thus triggered a number of lawsuits.

This year, a number of Housing enterprises default on their debts. Before that, the state purchase investment and Huayi capital also had a default.

Similarly, in recent years, the upper group and GREE real estate, which are in the grip of the liquidity crisis, have shown poor performance and small scale in recent years. When the real estate industry has entered 100 billion years, the sales scale of these housing enterprises is less than ten billion. If only ranked according to the sales scale, they will be 150 away.

The liquidity crisis of these housing enterprises is only the "iceberg" of the survival dilemma of small and medium-sized Housing enterprises. According to the data of the fourth national economic census of the National Bureau of statistics, as of the end of 2018, there were 206 thousand real estate development and operation enterprises in the country. There are people in the industry who estimate that the number of Housing enterprises that are currently running is about 80 thousand to 10 000 yuan apart from item company.

Among them, most of the housing enterprises are less than 1 billion yuan in scale, and some even have a scale of tens of thousands of yuan. Yan Yuejin, director of the think-tank center of Shanghai Yi Ju Research Institute, told the twenty-first Century economic report that these housing companies are mainly distributed in the four or five line cities. Many enterprises have only one or two projects under their control.

At the same time, such housing companies can hardly get financing from open channels. Fujian Fuqing people Lin Qiang (alias) in the eastern part of the county-level city to do real estate development, only made two projects in the local. He told the economic report in twenty-first Century that he was born in a foreign trade business. With the help of "first pot of gold" and income from relatives and townships, he transferred to real estate development.

Lin Qiang had operated several real estate projects in a small city in Jiangxi, and was introduced to the above county-level city after being introduced by a fellow townsman. "Banks can't give us loans. Companies are too young to have heard of names." Lin Qiang said that the start-up funds for real estate development these years basically come from private lending. After the project starts, it will rely on pre-sale and sales funds to support subsequent development.

Lin Qiang disclosed that a few years ago, the project was unsalable, and the company had suffered a serious financial crisis. In order to tide over the difficulties, they sold two houses and borrowed money from relatives and friends to maintain the operation of the company. Later, the crisis was lifted, but because of the high cost of private lending, Lin Qiang "basically did not make any money".

Small housing companies bear the brunt

Slightly larger housing companies may not be in the "Red List" of financial institutions. According to the twenty-first Century economic report, with the tightening of financing policy, most banks have reduced the scope of real estate development loans from "50 strong" to "30 strong" this year.

Trust companies are becoming more and more "picky." A well-known trust agency responsible person to the twenty-first Century economic report said that in addition to the ranking of the housing enterprises, there are strict requirements for the city and location of the project. Because trust requires high rate of return on investment, under the existing market conditions, the best item must be chosen.

According to the caliber of Shanghai Yi Ju Research Institute, Sansheng Hongye achieved sales of 18 billion 700 million yuan last year, ranking 114th in the country. Sansheng Hongye company put forward the goal of "three billion billion" in early 2018, and did not hesitate to expand its debt. Issuing financial products within the company is a way of financing. According to public information, Sansheng Hongye issued a financial product with a term of 12 months in 2017, with an interest rate of 12.5%.

A small housing company in Hunan told the economic report in twenty-first Century that the company had not received any money from the bank for more than two years. The company has 5 projects with a sales scale of around 5 billion. Until last year, after being bought by a 20 strong housing company, the company was able to obtain financing and the capital situation also improved.

A research report of Huatai Securities pointed out that the concentration ratio of real estate enterprises in sales, financing and land use is improving. In financing, not only large housing enterprises have larger financing scale, but also lower interest rates.

Yan Yuejin pointed out that for small housing enterprises, the more unfavorable is that these housing enterprises are mainly located in three or four cities, and even five line cities. Since this year, with the shrinking of the scale of shanty towns, the excess risk in these areas has begun to accumulate. Small housing enterprises will face enormous pressure because they can not achieve regional synergy.

Lin Qiang described the market changes of his city "roller coaster": when entering the city, the market was still in good condition. With the development of the New District, a large number of real estate projects began to build; from 2014 to 2016, the market development was not as good as expected, many projects were vacant and unfinished, there were developers running away; from 2016 to the first half of 2018, the housing reform started, most of the vacant items were digested; the market was cooling down again from the end of 2018 to the present.

Yan Yuejin believes that the number of small and medium-sized Housing enterprises in the future will be significantly reduced. Among them, the transfer of projects, mergers and acquisitions, or after the completion of the development of their own exit from the industry, are likely to be the outcome of these companies.

Economist Ma Guangyuan also pointed out that only 20% of the housing enterprises will survive in the future, and 80% of the enterprises will die. He believes that this is not a fact that will happen in the past two years, but it is a market trend.