Source of this article: Times Finance Author: Chen Zexuan
Two months after the mass production of annual reports, many real estate companies are still unable to cross this hurdle.
According to Times Finance and Economics statistics, as of June 6, there were at least 15 real estate companies that had failed to disclose their annual reports or unaudited annual results. Except for R&F, the remaining 14 had been suspended from trading, including Evergrande, Shimao, Aoyuan, and Fantasia. , Kaisa, Sunshine 100, Nanhai Holdings, and Contemporary Real Estate, etc. In late March, 12 real estate companies were suspended due to difficult annual reports.
Some housing companies have updated the outside world on the reasons for the continued delay in disclosing their performance. According to relevant announcements, they mainly focus on the replacement of auditors, the resignation of financial reporting units, the epidemic hindering audit work, and changes in the operating environment that require management to take more time to assess potential issues. Impairment provisions, etc., are basically the same as the reasons for the initial delay in the disclosure of performance by real estate companies in late March.
According to the listing rules, within 18 months from the date of the suspension, if a listed company fails to remedy the problem that caused the suspension and resume trading, the Hong Kong Stock Exchange can delist it.At present, the real estate companies that successfully "remediate" annual reports belong to the "minority", including only Powerlong, Ronshine, Agile, Jingye Mingbang, Mingfa and Shanghai Real Estate Group.
Suspended housing companies increased to 14
According to the listing rules of the Hong Kong Stock Exchange, these real estate companies should have disclosed the preliminary announcement of their results within 3 months after the end of the fiscal year, and the announcement must be based on the financial statements agreed by the auditors, and failed to disclose it on time Housing companies with financial information, including preliminary announcements, are generally required to be suspended from trading by the Hong Kong Stock Exchange.
Times Finance has learned that most housing companies end their fiscal year on the last day of each calendar year.In order to avoid a suspension, real estate companies whose fiscal year 2021 ends on December 31 must make a preliminary announcement by March 31, 2022.
Therefore, in late March, when the deadline for preliminary announcement disclosure was approaching, at least 21 real estate companies announced that they would delay the disclosure of performance, but not all real estate companies that delayed performance disclosure were suspended from April 1. R&F, Agile, Logan, Jingrui Holdings, Rongxin, Jingye Mingbang, Mingfa Group, Powerlong Real Estate and SRE Group.
In fact, on February 21, the SFC and the Hong Kong Stock Exchange reiterated that they will continue to follow a similar approach in the 2020 joint statement, allowing listed companies affected by the epidemic to issue results announcements or financial statements that have not been agreed with their auditors, in order to Meet the requirements to release results on March 31 and continue to trade.
In February 2020, the first joint statement issued by the SFC and the Stock Exchange indicated that under the circumstances affected by the epidemic, if the issuer is unable to obtain the consent of its auditors, but can fully comply with the "Listing" in all other aspects. other reporting requirements in the Rules, the Exchange will generally allow the issuer to continue trading in its securities if it publishes a preliminary results announcement that has not been agreed with its auditor within a time limit.
In the following March 2020, the SFC and HKEx issued a second joint statement, namely "Further Guidance on Joint Statements on Results Announcements Amid the COVID-19 Pandemic" (the "Guidelines"), Under the guidelines, issuers can publish only material financial information, including key financial data such as assets, liabilities, income and expenses, and changes in shareholders' equity, until the end of March.
As of June 6, only Powerlong, Ronshine, Agile, Jingye Mingbang, Mingfa and Shanghai Real Estate Group had completed the preliminary announcement and annual report approved by the auditors of the 21 real estate companies that had announced that they would delay their performance disclosure. , and these real estate companies basically disclosed preliminary announcements without auditors’ consent at the end of March.
At least 15 more companies continue to delay performance disclosure. Except for R&F, which is exempted from strictly abiding by the two annual report disclosure rules due to the epidemic and the change of auditors, and the stock can still be traded normally, the remaining 14 real estate companies have been suspended, of which 2 are 5. New additions were added after a month, and 12 companies, including Evergrande, Shimao, Aoyuan, Fantasia, Kaisa, Sunny 100. Nanhai Holdings and Contemporary Properties, etc.
According to the listing rules, if a listed company that has been suspended from trading fails to remedy the problem that caused the suspension and resume trading within 18 months from the date of the suspension, the Hong Kong Stock Exchange can delist it.
Change of auditor is still one of the main reasons
When the real estate company first delayed the disclosure of results in March, it also announced the reasons, mainly focusing on the replacement of auditors, the departure of financial reporting units, the epidemic hindering audit work, and the change in the operating environment, which caused management to take more time to assess potential impairments. Provisions, etc., which are basically the same reasons for the first delay in the disclosure of performance by real estate companies in late March.
As of June 6, some real estate companies, including Aoyuan, Shimao, Sansheng and Xinli, have continued to delay their performance disclosures to the outside world for the same reasons as above.
Taking Aoyuan as an example, it announced again on April 29 that it will continue to delay the release of its results for the same reason as the previous delayed announcement, that is, the preparation of preliminary results and the preparation of financial statements have been "severely delayed" due to the epidemic, and potential impairment provisions have been assessed. More time is required, and additional review procedures are required by the company's auditors based on the current status of liquidity.
The suspended real estate companies are basically those with liquidity risk pressure or thunderstorms. Although Jingrui Holdings and Logan disclosed preliminary announcements without auditors’ consent on March 31 and April 1, respectively, Jingrui Holdings and Logan disclosed preliminary announcements without auditors’ consent. However, the holding company issued a suspension announcement on the second day of the "flash crash" of the stock price on May 30, while Longguang has suspended trading since May 12.
Times Finance learned that the reasons for the suspension of the two real estate companies are "an announcement containing inside information" waiting to be published.Among them, Jingrui Holdings has not released inside information so far, nor has it explained the previous "stock price flash crash"; and Logan originally planned to delay the disclosure of the annual results to May 12, but it did not follow the schedule, and in the The news of the change of auditors was announced on the same day, and trading was suspended until the publication of annual results.
Only Powerlong, Ronshine, Agile, Jingye Mingbang, Mingfa and Shanghai Real Estate Group have completed the disclosure of the preliminary announcements and annual reports agreed by the auditors. The disclosure of all performance reports was completed on May 30.
It is worth mentioning that, according to the "Guidelines" mentioned above, issuers that have published unaudited preliminary results or management accounts, and important financial information, submit annual reports (including annual accounts and corresponding auditors' reports). The initial extension of time can be up to 60 days from the date of publication of the statement, which means that the deadline will be around the end of May.
The real estate companies that have successfully resolved the annual report problem have actually not experienced a formal default despite many signals such as tight liquidity in the past.
Take Agile as an example. Since the second half of last year, the real estate company has been deeply involved in rumors of layoffs and tight liquidity, but no default events have been exposed so far.According to Agile's annual report released on May 11, its turnover in 2021 is about 73.028 billion yuan, a year-on-year decrease of about 9%; its gross profit is about 19.021 billion yuan, a year-on-year decrease of about 21.1%; its net profit is about 9.098 billion yuan, a year-on-year decrease of about 9%. 25.7%; the profit attributable to shareholders of the company was about 6.712 billion yuan, a year-on-year decrease of about 29.2%.
