The total liabilities were 1.65 trillion, and the rating was lowered to "garbage level". What are the "hidden dangers" of Country Garden?

The "Cosmic Real Estate Enterprise" Country Garden has been rated, which has increased a "chill" in the real estate industry.

According to media reports, on the night of June 22, Moody's company, one of the "three major rating agencies in the world", announced that it had granted the "BA1" corporate family rating (CFR) to Country Garden Holdings and revoked its "BAA3". At the same time, Moody's Corporation also reduced the high -level unsecured rating of Country Garden from BAA3 to BA1, and adjusted the viewing outlook of Country Garden from "review" to "negative".

It is understood that Moody's credit rating is divided into 21 levels, and BA1 is at the 11th level, saying that "a speculative factors, reflecting the failure of the future. "It will weaken", and industry insiders generally call the "BA level" as "garbage level". As the rating is lowered, Country Garden has also caused heated discussions.

As a leader in housing companies, Country Garden was suddenly rated by rating agencies, which will inevitably make investors tighter nervous. Although a few days ago, Country Garden issued an announcement that it would use its own funds to repurchase US $ 683 million in advance.

So what impact will the "cosmic real estate company" Country Garden suddenly be rated?

The difficulty of repurchase US dollar bonds is lowered

In fact, since this year, Country Garden has been rated by many rating agencies.

As early as April 8 this year, S & P, which is also one of the "three major rating agencies", adjusted Country Garden's rating from positive to stability, and confirmed that Country Garden's "BB+" long -term issuer credit rating is the major rating. The institution has lowered the beginning of the Country Garden rating.

On May 30, Moody's company included Country Garden's "BAA3" publisher rating and high -end unsecured rating on the rating of the rating of the rating, and the prospects were adjusted from negatively to the list of rating observation; In less than a month, Moody's Corporation has twice reduced the ratings of Country Garden twice.

On June 8th, Fitch also included Country Garden's "BBB-" long-term foreign currency and local currency issuer's breach of contract, senior unsecured rating and rating of uncomfortable bonds on a negative rating observation list. At this point, the three major rating institutions All of them reduced the rating of Country Garden.

Affected by the rating of rating agencies to reduce rating, recently, the stock price of Country Garden has also appeared sharply.

As of the closing of June 24, Country Garden's stock price closed at HK $ 4.61/share, and calculated the closing price of HK $ 6.511/share before the first time the rating was lowered on April 8. In just two months, Country Garden's stock price fell down At 29.2%, the market value shrinks 44 billion Hong Kong dollars. During this period, its total market value once fell below 100 billion.

In order to boost investors' confidence, Country Garden chose to redeem the US dollar bonds in advance to show its capital strength.

On June 15, Country Garden issued an announcement saying that the 4.75%notes expired in July 2022 will request a offer to repurchase, and the purchase price of $ 1,000 per US $ 1,000 is purchased by cash. bill.

According to statistics, the amount of repurchase bills was US $ 683 million, with a total of more than 4 billion yuan. Although the amount of the repurchase notes is not too large for Country Garden, it is enough to prove the strength of Country Garden in the context of the continuous background of major housing companies' debt thoroughs today.

However, the repurchase of US dollar bonds still failed to block the rating agencies' rating again.

On the night of June 22, Moody's announcement announced that it had granted the "BA1" corporate family rating (CFR) to Country Garden Holdings Company and revoked its "BAA3" publisher rating. The mortgage rating was reduced from BAA3 to BA1, and the Country Garden's rating outlook was adjusted from "review" to "negative".

History of "Cosmic Real Estate"

In fact, the main reasons why major rating agencies have lowered the Country Garden rating are not for the consideration of capital pressure.

In the report of Moody's May 30th, it made it clear that "Country Garden is expected to maintain a strong market position and good liquidity", and believes that Country Garden does not have much financial pressure at present; Considering that "Country Garden will be promoted by the decline in real estate sales and the continued weak market sentiment in the next 6-12 months, liquidity buffer and financial flexibility are decreasing."

In fact, the concerns of rating agencies are not unreasonable. After all, there is also a label behind Country Garden of "Universe Stores", which is "high turnover".

About Country Garden's family history can be traced back to 1992 30 years ago. At that time, Yang Guoqiang, who was a contractor, took over 4,000 universal villas. Eventually, with the introduction of a well -known elementary school, no one asked the real estate to become a "school district house". The real estate industry disclosed that in just a few years, Country Garden's sales exceeded 2 billion.

In 2007, when housing companies such as Vanke, Wanda, and other housing companies chased me in order to compete for "one brother of real estate companies", this real estate company that started from Shunde, Guangdong has successfully listed from the Hong Kong Stock Exchange as the first Hong Kong listing in Mainland China Enterprise, Country Garden closed at HK $ 7.27 on the same day, and the market value broke 100 billion instantly. It was because of the successful landing on the Hong Kong Stock Exchange that the outside world slowly noticed that this real estate company that was not very eye -catching. After successfully landing on the Hong Kong Stock Exchange, with the help of the capital market, Country Garden "crazy land" has even caused the unusually crazy "land movement" of the entire real estate industry. Expansion ability.

Of course, in addition to the help of the capital market, Country Garden's success is inseparable from a large "magic weapon" -the high turnover. What is high turnover? Simply put, it is "456" -the on the day of delisting, four months after getting the land, five months of funds returned, six months of funds returned, and as the originator of the "high turnover", many of them later succeeded with high turnover to success. The housing companies, without exception, imitate Country Garden.

With the high turnover mode, Country Garden has opened a "cross -jump mode". According to media reports, in 2012, Country Garden's sales were only 47.6 billion, but in a year later, its sales exceeded the 100 billion mark; in 2016, Country Garden achieved a result of 30.884 billion. The second to Evergrande and Vanke, one year later, Country Garden's sales came to the amazing 500 billion yuan, which directly became the industry's first, and the name of Country Garden's "cosmic real estate enterprise" was also obtained.

However, everything has two sides. The core of the high turnover is that the environment is good and can be sold, but with the arrival of the cold winter of the real estate industry, selling houses is no longer easy. The rating agency has lowered the funeral of rating.

Sales decline, Country Garden hidden hidden dangers?

For Country Garden, sales is undoubtedly the most important indicator.

In the high turnover mode, as long as the house can be sold, you can still afford liabilities, and all problems can be solved.

However, with the turning of the real estate industry in the past two years, Country Garden Country Garden has also begun to face a decline in sales. According to statistics, from January to April this year, although Country Garden still ranks first in the real estate industry with sales of 2011.9 billion yuan, it has greatly reduced 152.91 billion yuan compared with the same period last year. The faucet is also difficult to be spared.

With the decline in sales, the problem that was once covered up by the high turnover is now possible. According to the financial report data, as of the end of last year, Country Garden's liabilities were as high as 1.65 trillion, the asset -liability ratio was 84.57%, and the liquidity liabilities were 1.38 trillion, of which the short -term loan was 64.382 billion. The total has exceeded 600 billion.

As of the end of last year, Country Garden's cash and cash equivalents were 146.954 billion, and the restricted deposits and cash were 34.36 billion yuan. Compared with 600 billion, there was a huge capital gap, and Country Garden's debt pressure was huge.

In addition, from the perspective of the "three red lines", Country Garden did not look as powerful as it appeared. According to the financial report data, the net debt ratio of Country Garden at the moment is 45.4%, and the liability ratio after the pre -collection is excluded is 74%, and the cash short debt ratio is 2.3. Because the debt rate after the pre -collection payment is removed is higher than the regulatory standard, because Country Garden belongs to the yellow file of the yellow file Real Estate companies are not green stall companies.

When the real estate industry is good as a whole, Country Garden can cover its huge liabilities by virtue of high weekly transfer; but as the real estate industry turn cold, when the high turnover model cannot run, Country Garden's hidden dangers slowly appear. From this point of view, for Country Garden, the rating agency has lowered rating.

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