Xiangsheng Holdings sells 50% equity of Huzhou Jiaotong Xiangsheng, optimizes debt structure, and reduces financing cost to 8.8%
Changjiang Commercial Daily News ●Jiang Chuya, reporter of Changjiang Commercial Daily
At a time when the real estate industry is in a downward cycle, selling assets has become an effective means for real estate companies to revitalize their assets.
On June 5, Xiangsheng Holdings (02599.HK) announced that Xiangsheng Real Estate Group Co., Ltd., a wholly-owned subsidiary of the company, entered into an equity transfer agreement with Zhejiang Jiaotong Investment Holding Group Co., Ltd. to sell Huzhou Jiaotou Xiangsheng Real Estate Development Co., Ltd. 50 % of the equity at a consideration of 92.5 million yuan.Xiangsheng Holdings said that the company is expected to record a profit of 127 million yuan, and the proceeds will be used as general working capital.
In 2021, the performance of Xiangsheng Holdings has achieved relatively stable development, with an annual operating income of 43.719 billion yuan and a net profit of 481 million yuan. In the same period, its net assets have achieved 16.952 billion yuan, which has grown steadily for two consecutive years, with total assets of 145.743 billion yuan. .
At the same time, Xiangsheng Holding Group continued to optimize its debt structure. As of the end of 2021, its interest-bearing liabilities were 34.386 billion yuan, a year-on-year decrease of 25.53%, and the scale was significantly reduced; the average financing cost was further reduced to 8.8%, realizing the gradual increase in financing costs since its listing. reduce.
Selling projects to revitalize assets
According to the announcement, on June 3, Xiangsheng Real Estate Group Co., Ltd., a wholly-owned subsidiary of the seller Xiangsheng Holding Group, entered into an equity transfer agreement with the buyer, Zhejiang Communications Investment Holding Group Co., Ltd.The sale target is a 50% stake in Huzhou Jiatou Xiangsheng Real Estate Development Co., Ltd. at a consideration of RMB 92.5 million in cash.
At the same time as entering into the Equity Transfer Agreement, the Seller, Huzhou Wuxing and the Target Company entered into a Debt Transfer Agreement, pursuant to which the Seller will transfer its debt of RMB 24.75 million owed to Huzhou Wuxing to the Target Company to offset the target company's debt of the same amount owed to the Seller .
Xiangsheng Holdings Group expects the transaction will record a gain of RMB 127 million, and the proceeds will be used as general working capital for the group.
It is understood that the buyer, Zhejiang Communications Investment Holding Group Co., Ltd., is mainly engaged in property development business, which is indirectly wholly-owned by the Zhejiang Provincial Government.
The industry believes that when the real estate industry is in a downward cycle, companies need to gradually take stock of corporate assets while promoting sales, stabilizing payment, and ensuring delivery, actively seek partners for high-quality asset projects, revitalize resources, and increase disposable hands. funds to address current liquidity risks.
Debt structure continued to be optimized
Although the real estate industry has suffered a strong impact in recent years, Xiangsheng Holdings has still achieved relatively stable performance development.
According to the announcement, in 2021, the contracted sales of Xiangsheng Holding Group attributable to the Group's equity will exceed 80.3 billion yuan, a slight increase of 2.8% compared with 2020, achieving three consecutive years of growth.
The total contracted GFA attributable to the Group's interests in 2021 increased by 4.8% over the same period to 5,946,700 square meters.During the period, the average selling price of contracts attributable to the Group's interests remained stable compared with the same period, at RMB 13,509 per square meter.
As of the end of April 2022, the contracted sales of Xiangsheng Holdings attributable to the group were about 11.125 billion yuan, the contracted construction area was about 817,160 square meters, and the average contract price was about 13,614 yuan per square meter.
In terms of land reserves, as of the end of 2021, Xiangsheng Holdings should occupy a total land reserve of 20.81 million square meters, of which 7.74 million square meters in the Pan-Yangtze River Delta region accounted for 37.2% of the total, and 10.46 million square meters in Zhejiang Province accounted for 50.3% of the total.Among them, in 2021, Xiangsheng Holdings will add 20 new land parcels in 15 cities, with a total attributable area of 1,294,900 square meters.
In terms of finance, as of the end of 2021, the net debt ratio of Xiangsheng Holding Group was 153.0%, and the asset-liability ratio excluding accounts received in advance was 77.5%.At present, the three red line indicators of the company all exceed the regulatory requirements and belong to the red-grade real estate enterprises.
However, the debt structure of Xiangsheng Holdings continues to be optimized.
As of the end of 2021, the total debt of Xiangsheng Holdings has decreased by 25.5% to 34.386 billion yuan compared with 46.177 billion yuan in 2020, and the scale has been significantly reduced.During the period, the company's net assets increased slightly to 16.952 billion yuan while maintaining stability.At the same time, the company's total assets also maintained a relatively stable trend of 145.743 billion yuan.
At the same time, the financing cost of the company has been gradually reduced since its listing. Its average financing cost has dropped by 0.2% at the end of 2020 compared with 2019. As of the end of 2021, the data has dropped by another 0.3% to 8.8%.
For the staged risks and pressures that the company will face, Xiangsheng Holding Group stated that it will make every effort to deal with it and actively raise funds to solve the debt problem.
