Sino-Singapore Jingwei Client, August 24 (Xue Yufei) Real estate financing tightened, and finally received official confirmation, but the details still need to be confirmed. On the morning of the 23rd, the Ministry of Housing and Urban-Rural Development and the official website of the central bank simultaneously released information that the two departments held a key real estate enterprise symposium on August 20, forming key real estate enterprise fund monitoring and financing management rules. This symposium is less than a month away from the high-level real estate work symposium held on July 24.
The epidemic has not allowed the policy to loosen the regulation of the real estate market, and "housing to live without speculation" is still repeatedly emphasized. The tightening of the fund monitoring and financing management rules for key real estate enterprises this time means obvious. Industry insiders believe that the financing environment of the real estate market will further tighten, and some real estate companies will face financing difficulties.
The details of the formation of financing management rules for key real estate companies are still to be determined
Before this meeting, the news that the Ministry of Housing and Urban-Rural Development, the Central Bank and other departments would strengthen the tightening of financing for some real estate companies had already spread.
According to the media, the regulatory authorities have introduced new regulations to control the growth of interest-bearing debt of real estate companies and set up "three red lines." Specifically, red line 1: the debt-to-asset ratio after excluding advance receipts is greater than 70%; red line 2: net debt ratio is greater than 100%; red line 3: cash short-term debt ratio is less than 1 time.
According to the situation of the "three red lines", the real estate companies are divided into four levels of "red, orange, yellow, and green". Taking the scale of interest-bearing liabilities as the objective of financing management operations, the tiers are set to the growth threshold of the scale of interest-bearing liabilities, which is reduced by one level and the upper limit is increased by 5%. That is, if the "three lines" exceed the threshold value as the "red level", interest-bearing liabilities The scale is capped at the end of June 2019 and cannot be increased; the “second-tier” threshold value is the “orange file”, and the annual growth rate of interest-bearing liabilities cannot exceed 5%; the “first-tier” threshold value is the “yellow file”, and the scale of interest-bearing liabilities The annual growth rate shall not exceed 10%; none of the “three lines” exceeds the threshold for the “green level”, and the annual growth rate of the scale of interest-bearing liabilities shall not exceed 15%.
Through the "three red lines" to control the scale of debt issuance and debt financing of real estate enterprises, it was reported by several media, and some unnamed real estate business persons and brokerage persons also confirmed it. However, there has been no clear conclusion on how to set the red line and which companies will be subject to key supervision. The relevant government departments have neither confirmed the relevant reports nor actively refuted rumors.
The Ministry of Housing and Urban-Rural Development and the People's Bank of China held a symposium on key real estate enterprises. Source: People's Bank of China website
By the morning of August 23, relevant reports were finally confirmed. On August 20, the Ministry of Housing and Urban-Rural Development and the People's Bank of China held a symposium on key real estate companies in Beijing to study the further implementation of a long-term real estate mechanism. Responsible comrades from relevant departments such as the China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, Foreign Exchange Bureau, Dealers Association, and some real estate companies attended the meeting.
The meeting pointed out that in order to further implement the real estate long-term mechanism, implement the real estate financial prudential management system, and enhance the marketization, regularization and transparency of real estate enterprise financing, the People's Bank of China, the Ministry of Housing and Urban-Rural Development, and relevant departments have conducted extensive consultations in the early stage , The formation of key real estate enterprise fund monitoring and financing management rules.
However, the central bank and the Ministry of Housing and Urban-Rural Development did not mention the implementation details such as the "three red lines" and did not specify which "key real estate companies" will implement this management rule.
One month back, that is, July 24, the "Real Estate Work Symposium" was held with high standards. In addition to reiterating "no real estate speculation", insisting on not using real estate as a short-term economic stimulus, and insisting on stabilizing land prices, housing prices, and expectations, the symposium also "implements a good real estate financial management system to stabilize the stock and strictly Control the increase and prevent the illegal flow of funds into the real estate market."
The industry believes that the key real estate enterprise symposium can be regarded as a concrete manifestation of the implementation of the real estate work symposium on July 24. Ding Zuyu, CEO of E-House Enterprise Group, analyzed that this means that the real estate financial prudential management system is an important part of the real estate long-term mechanism. Combined with the description of the financial policy in the real estate work forum on July 24, that is, to prevent the illegal flow of funds into the real estate market, this year's relatively loose funds will not be directly released to the real estate, and the financial policy remains the same as before.
Financing tightening becomes inevitable, the net debt ratio of 16 real estate companies exceeds 100%
Although the details of the fund monitoring and financing management rules formed by key real estate companies have yet to be determined, the tightening of financing is the general trend, and the financing and issuance of bonds by enterprises in the second half of the year may be affected.
Everbright Securities stated in a research report that the policy may be aimed at promoting the rational allocation of financial resources, guiding expectations to return to stability, and preventing and dissolving real estate financial risks. From the considerations behind the policy, it may include many factors: the current industry capital is relatively good, and the monetary policy returns to normalization in the second half of the year, manage the capital flow in advance to prevent the real estate sector from squeezing financial resources; alleviate the impact of land price increases on housing prices Conduct pressure and guide market expectations to return to stability; the industry has ushered in a peak in debt maturity, especially domestic debt maturity increased significantly in the short term, leading real estate companies from top to bottom to adjust their asset-liability structure to prevent and resolve real estate financial risks.
Ding Zuyu said that the financing environment of the real estate market will be further tightened, and some real estate companies will face financing difficulties. Once the new financing regulations are implemented, they will have a greater impact on the industry: the land market cools down and the sales of new homes accelerate, which is good for leading real estate companies, and has a greater impact on high-debt real estate companies, which will definitely accelerate the industry reshuffle.
In fact, with the gradual tightening of the relatively loose financial environment in China, the scale of domestic financing of real estate enterprises has shown negative growth. According to statistics compiled by the Shell Research Institute, from January to July 2020, domestic and foreign bond financing of real estate enterprises totaled about 737.9 billion yuan, and the financing scale decreased by 7% from the same period of the previous year. The financing scale in the first 7 months accounted for 62.5% of the whole year of 2019. .
Shell Research Institute believes that with increasing financial supervision in the real estate industry, real estate companies have also entered the peak period of debt repayment. Under the attack of "large demand and strict supervision", corporate financing is facing a more severe test.
From the corporate perspective, some real estate companies with high debt and high short-term debt pressure will be under greater pressure. Zhou Yue, the chief analyst of China Securities, pointed out in a recent research report that the overall debt-to-asset ratio of real estate companies excluding advance receipts is relatively high. The ratio of 38 real estate companies exceeds 70%. CCRE Real Estate, Sunac China, The debt-to-asset ratio of 10 real estate companies including Zhongnan Land and Greenland Holdings, excluding advance accounts, exceeded 80%. In terms of net debt ratio indicators, more than half of real estate companies have a ratio of less than 100%. Tahoe Group, R&F Group, China Fortune Land Development, Sunac China, China Capital, Huafa, China Railway Construction, Zhongnan Land, Aoyuan Group, Beijing Capital The net debt ratio of 16 real estate companies including home ownership is greater than 100%.
According to Zhou Yue, there are 4 short-term debts accounted for more than 45%, namely Tahoe Group (57%), Rongsheng Development (52%), Greentown China (48%) and China Evergrande (47%). ), and both have increased compared to 2018. There are 8 real estate companies with more than 30% bond financing, namely Logan Real Estate, Gemdale Group, New Town Holdings, Binjiang Group, Shoukai, Sino-Ocean Group, Beijing Capital Land and Huayu Group. Logan Real Estate has the highest proportion of bond financing. 48.16%. (Zhongxin Jingwei APP)
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