Author|Cai Zhen
Source | Mustang Finance
Is pledge a prelude to selling?
In the battle of Suning’s self-help, Suning Real Estate became the vanguard.
Suning Real Estate pledged its equity multiple times
According to industry and commerce information, on April 12, Suning Real Estate Group Co., Ltd. pledged all the shares of Chuzhou Suning Real Estate Co., Ltd., amounting to 10 million yuan, and the pledgee was Xinyu Hanyu Bijiang Asset Management Co., Ltd.
After the penetration of Yema Finance, it was discovered that Xinyu Hanyu Bijiang Asset Management Co., Ltd. and Country Garden Group have an associated relationship , The former legal representative Zhou Jinxin also serves as the legal representative of Foshan Nanhai Bijia Culture Communication Co., Ltd., which is controlled by the Guoqiang Charity Foundation under Country Garden.
This is not the first time Suning Real Estate has asked Country Garden for help.
On March 23 this year, Suning Real Estate pledged shares of its subsidiary Jiangsu Yinhe Property Management Co., Ltd. (hereinafter referred to as Yinhe Property) to Country Garden Life Service Group Co., Ltd. (hereinafter referred to as Country Garden Service). The pledged equity amount was RMB 30.01 million. Equivalent in capital.
According to market news recently, Country Garden will acquire Yinhe Property at a transaction price of 3 billion yuan, and the pledge of equity is actually a guarantee for the transaction. As of press time, Suning and Country Garden have not commented.
In addition to Country Garden, Industrial Bank, Evergrande and Ali are also pledgers of Suning Real Estate.
In January this year, Suning Real Estate’s shareholder Suning Appliance pledged part of its equity to the Nanjing Branch of Industrial Bank; in January-March, Suning Real Estate also pledged equity to Evergrande Life Insurance several times.
In December last year, the entire equity of Suning Holding Group was pledged to Taobao. At the same time, Zhang Jindong pledged 65,000 shares of Suning Real Estate to Taobao.
Regarding this equity pledge, Suning Tesco told Yema Finance at that time: “ Equity pledge is a normal commercial cooperation and has no material impact on Suning.com’s strategic development and normal operations . In the past 30 years, Suning’s innovation and development cannot be separated from the long-term strong support of strategic partners and relevant departments. Since the beginning of this year, in the face of the epidemic challenge, Suning has fully mobilized the advantages of the forward-looking layout of smart retail and realized the steady development of the enterprise. Suning and Ali have maintained good cooperation for a long time, and the two parties will further deepen cooperation and expand offline business scenarios. ”
Senior industry professionals said to Yema Finance that equity pledge financing generally requires a 50% discount. Equity pledge financing has low loan cost and fast time for enterprises, and has relatively little impact on the stock price of listed companies.
Focusing on the main business, where does Suning Real Estate go?
At the end of last year, Zhang Jindong announced that Suning would focus on its main business in the next ten years, “slashing that should be cut, and that should be transferred.”
Jiangsu Football Club was the first cut taken by Suning. On February 28th, Jiangsu Football Club (formerly known as Jiangsu Suning Football Club) issued an announcement stating that due to the superposition of various uncontrollable elements, the club could not guarantee the continued battle on the field. Operations. Set the embarrassing record of “the Chinese Super League team disbands when they win the championship”.
Jiangsu Football Club is 100% holding of Suning Real Estate.
Suning Real Estate Group Co., Ltd. was established in 2005. As of June 2020, Suning Real Estate has total assets of 88.527 billion yuan, net assets of 14.594 billion yuan, operating income of 1.247 billion yuan, and net profit of 102 million yuan. According to data released by Crane, Suning Real Estate’s full-caliber sales in 2019 and 2020 were 8.93 billion yuan and 17.91 billion yuan, ranking 169th and 134th among real estate companies. ,
Galaxy Property is a wholly-owned subsidiary of Suning Real Estate. It was established in 2000. Zhang Jindong holds 65% of the shares, Suning Appliance holds 25%, and his son Zhang Kangyang holds 10%. Zhang Jindong actually controls 77.5% of Yinhe Property.
As of 2020, Yinhe Property has an area of 59.79 million square meters under management and a contract area of 79.98 million square meters. Projects under management include commercial properties, technology office properties, high-end residential properties, industrial park properties, public service properties, etc.
Suning Real Estate is the most important asset of Suning Appliance besides Suning Tesco. Under the parent company’s grand strategy of focusing on the main business, Suning Real Estate is regarded as the largest traffic portal for Suning’s smart retail line.
Real estate analyst Yan Yuejin pointed out that with the current acquisition of real estate and retail equity, the scale of commercial real estate development is relatively large. If Suning itself participates in the cooperation, it does not rule out that subsequent real estate business expansion will also be adjusted. In addition, in the current special period, the transfer of equity can enhance cash flow, which is first a positive effect for the company, but in the future, we must also pay attention to whether similar cooperation will affect the business including retail, real estate and other related sectors.
How much more will Suning Real Estate suffer? How will it be positioned within the Suning system in the future? It remains to be seen.
How much is the Galaxy property worth?
The spin-off of property companies to raise funds for listing is a fairly common move by real estate developers in recent years.
As of the end of last year, more than 40 property companies have landed on the capital market, of which about 38 property companies have landed on the Hong Kong stock market, and about 3 have landed on the A-share market.
It should be noted that compared with 2019, investors have become calmer on property stocks, and the market is lowering their valuations. Previously, the first service, Shimao service, KJ Youhuo, etc. broke out at the opening of the market is a wake-up call. But in any case, if the property platform is listed, it will at least be good for the parent company to expand new financing channels.
Suning Appliance chose to pledge or sell the shares of the property management company, rather than seeking to split the IPO, or because of the debt pressure, it needs blood transfusion in the short term.
According to the data from the Enterprise Warning Communication, as of the end of the third quarter of 2020, Suning Appliance’s total liabilities were as high as 299.549 billion yuan, non-current liabilities due within one year were 53.99 billion yuan, short-term borrowings were 49.734 billion yuan, and the ending cash and cash equivalents were only 230.03. 100 million yuan.
In the first half of 2020, Suning Appliance’s revenue was 123.243 billion yuan, down 11% year-on-year; net profit was 784 million yuan, down 69.6% year-on-year, and operating cash outflow was 612 million yuan.
Country Garden Services is a leader in the property management industry. In June 2018, it was spun off from Country Garden Group and successfully listed on the Hong Kong Stock Exchange. As of the end of 2020, it has managed 3277 projects and served 4.24 million owners, with an area under management of 380 million square meters and a contract area of 820 million. Square meters, in a leading position in the industry. The annual revenue was 15.7 billion yuan, which is currently the largest revenue in the property sector in the secondary market. In addition, the company also holds tens of billions of cash and equivalents.
Li Changjiang, Executive Director and President of Country Garden Services, once publicly stated that the company may have more than 4,000 projects under management this year, and proposed to achieve a revenue goal of 100 billion in five years.
Country Garden Services, which has a lofty goal and not bad money, started a “buy, buy, buy” model. Last year, it acquired Manguo Kangjie Sanitation Company for 2.45 billion yuan, and Urban Zongheng (elevator advertiser) for 1.52 billion yuan, as well as the smaller Hong Kong Real Estate Industry and Jiakai. Regional property companies in cities and regions.
At the same time that it was reported that the acquisition of Yinhe Property for 3 billion yuan, Country Garden Services also had nearly 4.9 billion yuan to acquire Blu-ray Garbo’s “largest property acquisition case” that has not yet fallen.
If the consideration of 3 billion yuan is true, Country Garden’s offer to Suning has a relatively high premium rate. In contrast, at the beginning of this year Evergrande Property acquired Zhejiang Yatai for 1.5 billion yuan, the latter’s area under management exceeded 80 million square meters; Blu-ray Jiabao, which has an area under management twice that of Yinhe Property, offered only 5 billion yuan—— In the Galaxy property, which covers an area of only 60 million square meters, even if the added value brought by the Suning commercial complex is included, it is worth 3 billion yuan to raise a question mark.
Yinhe Property currently covers more than 200 cities across the country. The projects include commercial complexes (local Suning Plaza), residential and sales offices, industrial parks (towns and logistics centers), office buildings, and public services. There are a large number of projects in Jiangsu Province In other provinces.
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