Follow this month
• The government has set up affordable housing re-loans, and the financing of white-listed projects has continued to advance
On May 17, the State Council Information Office held a regular briefing on the policies of the State Council, at which it was mentioned that 300 billion yuan of affordable housing reloans would be set up for local state-owned enterprises to purchase completed and unsold commercial housing for use as affordable housing; In addition, as of that date, the loan amount of the "white list" project was 935 billion yuan, and the loan should be fully realized in the future. For example, as of May 7, a total of 365 projects in Henan Province have been granted bank credit and 190 projects have been financed. As of the 23rd, 123 real estate "white list" projects in Chongqing have received bank credit lines of 19.042 billion yuan, of which 93 projects have received loans of 9.178 billion yuan. On the whole, there are not many policies directly related to the financing of real estate enterprises this month, but the financing of high-quality "whitelist" projects is still advancing. • The scale of financing in a single month hit a new high since 2024, and Vanke received a large number of bank loansIn May 2024, the total financing of 65 typical real estate enterprises was 50.97 billion yuan, an increase of 82% month-on-month and 48.1% year-on-year, and the scale of financing in a single month hit a new high since 2024, mainly because Vanke publicly obtained a large number of bank loans this month. The issuance of real estate enterprise bonds was 5.86 billion yuan, a decrease of 73.2% month-on-month and a year-on-year decrease of 70.1%. The average financing cost of bonds was 3.25%, an increase of 0.19 pct month-on-month and a decrease of 0.09 ct year-on-year. No real estate companies carried out overseas financing this month, and the domestic financing cost remained at a low level of 3.25% as the domestic bond issuers were still mainly high-quality real estate companies such as Poly. • Hongying City Services completed its listing, and a number of real estate companies continued to promote their share allotment plansOn the 17th of this month, Hongying City Services, a subsidiary of Changsha Urban Development Group, officially completed its listing on the Hong Kong Stock Exchange, becoming the first property stock to be listed in 2024. In terms of additional allotments, a number of real estate companies have made new progress in their allotment plans this month: Jinan High-tech, Xiamen International Trade and Zhonghua Enterprises updated their fundraising materials according to their 2023 annual reports and replied to inquiries from the exchange; Because Zhongnan Construction suffered a forced delisting, its additional issuance plan was also terminated; Rongsheng Development's additional issuance plan is still under internal evaluation. On the whole, most of the listed real estate companies in the domestic private placement is still relatively slow, such as Poly, Damingcheng, CCCC and other additional issuance plans that have been approved by the exchange to register have not been completed, and at the same time, a number of real estate companies have announced the termination of the private placement.
01Bond issuance
The monthly scale hit a new high since 2024
Vanke received a large number of bank loans
In May 2024, the total financing of 65 typical real estate enterprises was 50.97 billion yuan, an increase of 82% month-on-month and 48.1% year-on-year, and the scale of financing in a single month hit a new high since 2024, mainly because Vanke publicly obtained a large number of bank loans this month, with a total amount of 39.22 billion yuan. Judging from the cumulative data of the whole year, the cumulative total financing of 65 typical real estate enterprises was 183.549 billion yuan, a year-on-year decrease of 33.2%. In terms of financing structure, the domestic debt financing of real estate enterprises this month was 49.54 billion yuan, an increase of 79.1% month-on-month and 75.4% year-on-year; There are still no enterprises to raise funds abroad; Asset securitization financing was 1.43 billion yuan, an increase of 308.6% month-on-month and a year-on-year decrease of 70.1%.
In May, real estate enterprises issued bonds of 5.86 billion yuan, a decrease of 73.2% month-on-month and a year-on-year decrease of 70.1%. There were no overseas bond issuances by enterprises this month, and 5.86 billion yuan were all domestic bond issuances, a decrease of 73.2% month-on-month and 67.8% year-on-year. Among them, the issuance of medium-term notes was 5.16 billion yuan, a decrease of 39% month-on-month and a year-on-year decrease of 57.4%; The issuance of ultra-short-term financing was 700 million yuan, a decrease of 83.5% month-on-month and a year-on-year decrease of 73.1%, and the domestic bond-issuing enterprises are still high-quality real estate enterprises such as Poly Development.
From January to May 2024, the financing cost of 65 typical real estate enterprises added bonds by 3.15%, a decrease of 0.45 percentage points from the whole year of 2023, of which the financing cost of overseas bonds was 4.28%, a decrease of 3.76 percentage points from the whole year of 2023, and the financing cost of domestic bonds was 3.13%, a decrease of 0.35 percentage points from the whole year of 2023. In a single month, the financing cost of real estate enterprises in May was 3.25%, an increase of 0.19pct month-on-month and a year-on-year decrease of 0.09ct. No real estate companies carried out overseas financing this month, and the domestic financing cost of 3.25% remained at a low level as the domestic bond issuers were still mainly high-quality real estate companies.
In terms of specific corporate performance, the company with the largest bond issuance in May was Poly Development, which issued a medium-term note of 2 billion yuan. Only 5 companies issued bonds this month, a decrease of 8 from the previous month. In terms of bond maturity, Metro and New Hope each issued one medium-term note with a maturity of up to 5 years, which was the longest bond issued this month. From the perspective of the performance of bond issuance interest rates, the medium coupon rate issued by Poly is 2.52%, which is the lowest among all bonds issued by real estate companies this month.
02Maturity and default of bonds
29.9 billion yuan due this month
Dima and Agile defaulted on their debts for the first time
A total of 15 bonds matured in May, about 29.9 billion yuan after excluding the part that had been redeemed in advance, a decrease of 35% from the previous month. In advance, there will be 24 bonds due in June 2024, which will be about 45.8 billion yuan after excluding the part that has been redeemed in advance, an increase of 53% month-on-month.
In terms of debt default, on the 6th of this month, Dima shares issued an announcement that the bonds failed to repay the principal and interest on time, and on the 14th, Agile announced that the company had not paid the relevant interest on the 2020 notes within the grace period, and was expected to be unable to fulfill all payment obligations under its overseas debts, and both companies were exposed to debt default events for the first time. On the whole, the financing of real estate companies is still relatively sluggish in the near future, and real estate sales have not yet fully recovered, so there may still be more real estate companies exposed to debt defaults in the future, and liquidity problems still need the attention of the industry.
03IPO and additional issuance
Hongying City Services completed the listing
A number of real estate companies continue to promote the allotment plan
On the 17th of this month, Hongying City Services, a subsidiary of Changsha Urban Development Group, officially completed its listing on the Hong Kong Stock Exchange, becoming the first property stock to be listed in 2024. On the whole, Hong Kong's capital market has been more cautious about the listing and financing of domestic real estate-related enterprises recently, and the listing enthusiasm of domestic real estate enterprises and their subsidiaries is relatively low.
In terms of additional allotments, a number of real estate companies have made new progress in their allotment plans this month: Jinan High-tech, Xiamen International Trade and Zhonghua Enterprises have updated their fundraising materials according to their 2023 annual reports and replied to inquiries from the exchange; Due to the forced delisting of Zhongnan Construction, its additional issuance plan was also terminated; Rongsheng Development's additional issuance plan is still under internal evaluation.
On the whole, since the China Securities Regulatory Commission issued the "third arrow" of equity financing for real estate enterprises on November 28, 2022, many real estate companies have announced share allotment plans. However, the private placement of most listed real estate companies in China is still relatively slow, such as Poly, Damingcheng, CCCC and other additional issuance plans that have been approved and registered by the exchange have not been completed so far, and a number of real estate companies have announced the termination of private placement.
04 Stock price changes
Under the influence of policy dividends
Real estate stocks in the two cities performed relatively well throughout the month
The share price performance of real estate stocks in the two cities this month was relatively good, with 42% of A-shares rising throughout the month, and 59% of H-shares, mainly because the central bank and the State Administration of Financial Supervision launched a series of favorable policies for real estate on May 17, including reducing down payments, lowering the lower limit of interest rates, and reducing provident fund loan interest rates, which promoted the share prices of real estate-related stocks. In terms of H-shares, Peking University Resources is the real estate-related stock with the largest increase in H-shares this month, and the main reason for the sharp rise in the company's stock price is that it cut 7.762 billion shares due to the restructuring of its share capital on May 8, and finally rose by 279.52% for the whole month.
In terms of A-share real estate companies, ST Jinke rose significantly this month. The main reason for the rise in the company's stock price is that the company's bankruptcy reorganization has been supported by the court and allowed to manage its own property and business affairs under the supervision of the administrator, so the company's stock price finally rose by 27.43% for the whole month.
May 2024 Capital Monthly Report
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More monthly research reports
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Monthly
The supply and demand of new homes fell by more than 4% month-on-month in January, and it is expected to remain sluggish in February (January 2024)
In February, during the Spring Festival, the supply and demand of the property market fell to the lowest in 6 years, and the premium rate of the real estate market rebounded (February 2024)
In March, the property market transactions doubled month-on-month but remained low, and it is expected that the repair will continue in April (March 2024) Supply and demand will fall in April but be higher than the monthly average of 20% in the year, and it is expected that it will still fluctuate at a low level in May (April 2024)
Transactions increased slightly in May, and the policy window is expected to rebound in June (May 2024)
Monthly M&A report
Country Garden disposes of a number of assets in Guangzhou and overseas for 9 billion yuan, and Cinda takes over Sunac and Kaisa projects again (January 2024)
R&F sells HK$6.2 billion of London project-based bonds, Vanke disposes of assets to cope with debt repayment peak (Feb 2024)
Local state-owned assets take over Sunac and Shimao projects, and Yinyi Real Estate is planned to be sold at a 7% discount (March 2024)
Vanke in talks to sell its stake in GLP, Zhongnan may receive investment from PAG (Apr 2024)
Vanke Sells Land Parcel of Shenzhen Super General Commercial Office, Evergrande Plans to Sell 58.5% Stake in Evergrande Automobile (May 2024)
The transaction scale of the monthly land report is at a cyclical low, and the premium rate has stopped falling and increased slightly (January 2024), and the transaction scale has fallen to a historical low, and the premium rate has rebounded to 5.2% (February 2024)
The transaction scale continued to be at a historical low, and the popularity of each city was significantly differentiated (March 2024), the transaction floor area was flat at a low level, the premium rate declined, and the unsold auction continued to be high (April 2024)
The transaction area halved year-on-year, the premium rate declined, and the unsold rate reached a new high (May 2024)
The monthly performance of the top 100 enterprises in the monthly report hit a new low, and most real estate investment has not yet started (January 2024)
Affected by the Spring Festival holiday, real estate companies' monthly sales and financing hit a new low (February 2024)
The sales of the top 100 fell by more than 40% year-on-year, and the core cities of central state-owned enterprises grabbed land (March 2024)
Top 100 sales and financing both remained low, corporate investment rebounded slightly (April 2024) Sales of the top 100 increased slightly month-on-month, and the top state-owned enterprises saw significant price cuts (May 2024)
Monthly Capital Report: Monthly financing of real estate enterprises decreased by 29% year-on-year, and favorable financing policies were frequently issued (January 2024)
Monthly financing of real estate enterprises hit a new low since 2021, and the implementation of the financing coordination mechanism accelerates (February 2024)
State Council Meeting Releases Favorable Policies, Shum Yip Property and Prosperity Services Submit Listing Applications (March 2024)Financing of Whitelisted Projects Launches in Large Quantities, Xi'an Economic Development Property Submits Listing Applications (April 2024)
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