In August,It is exposed that the company is caught in liquidity difficulties and enters a state of "quasi-default";
In September,During the grace period of one month, Country Garden stepped on the line to pay the overdue US dollar debt coupon, temporarily avoiding default;
In October,That is, yesterday, Country Garden announced that the cash situation is still under pressure and will start overseas debt restructuring.
Reorganize,That is, housing enterprises cannot pay their debts on time.You need to roll over the debt to get some breathing space.
According to the existing statistics, Country Garden currently has 15 US dollar bonds in existence, involving a principal of about 9.3 billion US dollars. There is no principal due in 23 years, and there are 2 in 24 years.
The interest due this year is mainly the dollar debt bill, which means that Country Garden can’t afford the debt interest now.
To make an announcement is to tell everyone that they are going to lie flat.
Or Country Garden already knows that there is no chance to turn over. Instead of struggling, it is better to lie flat.
After all, people’s memories are still there.
For example, Lao Yang passed the position to Xiao Yang in order to get away with it.
For another example, Xiao Yang donated 20% of the shares of Country Garden Service in his hand, totaling 6.4 billion to Guoqiang Public Welfare Foundation for the development of charity, which is a typical transfer of high-quality assets.
Just like Evergrande, there is nothing to analyze.
Next, Country Garden can strive for a long debt restructuring cycle as long as it guarantees the delivery of the building according to the wishes of the top management.
During this period, Country Garden can make many adjustments to save itself. Just like Evergrande, it can still be delayed for two or three years after the thunderstorm.
However, if Country Garden keeps stepping on the red line like Evergrande, it will be hard to say.
According to the news reported by the media today, at the recent monthly meeting of Country Garden, Mo Bin, the president with an annual income of over 100 million yuan last year, explained the donation of shares in Yang Huiyan, revealed that the boss had sold his private jet, and excused himself by the way.
Share donation has already started, with the purpose of public welfare, but the timing is not good.Executives did earn some money a few years ago, but now their annual salary has been reduced to a minimum. The annual salary of themselves and Dr. Cheng has been reduced to 3 million and 1 million.
Let’s not say whether this explanation is useful or not, but we can see that the Evergrande incident did shock some people, but the degree of shock is hard to say.
But it doesn’t matter what Country Garden said. It’s only a matter of time before it falls.
In the first nine months of this year, Country Garden realized equity sales of 154.98 billion yuan, down 43.9% year-on-year, and down 65.4% compared with 2021.
Looking at it every month,In January, the sales of Country Garden was still 22 billion yuan, which fell to 12 billion yuan in July and 6.17 billion yuan in September.Compared with the average monthly sales of more than 40 billion in the peak period, it is just two words, which is sluggish.
So, why are Yang and Yang preparing for the thunderstorm? Because of the real sales situation of Country Garden, they know it too well.
And it’s really hard to turn things around.
More than 60% of the properties for sale in Country Garden are in third-and fourth-tier cities. It is a foregone conclusion that house prices in third-and fourth-tier cities will fall. What is waiting for Country Garden in the future isIf we get rid of difficulties and continue to lose money, asset valuation will continue to shrink.
In addition, in the case of public default and undiminished debts, whether it is first-and second-tier real estate or third-and fourth-tier real estate, the sales end will face a devastating plunge.
This is the vicious circle of public debt default thunder.
In other words, the real challenges and pressures of Country Garden are still behind.
This is obvious and invisible on the surface, as well as the tremendous pressure brought by foreign exchange fluctuations, and the "borrowing the new and returning the old" can’t go on.
In August, Country Garden issued an announcement summarizing that one of the reasons for the loss was the expected net exchange loss caused by foreign exchange fluctuations.
To put it simply, the domestic sales rebate is RMB, and the overseas repayment is US dollars. There is an exchange rate problem.
In the past, the interest rate of the US dollar was low. In the past two years, the Federal Reserve continued to raise interest rates, and the interest rate of the US debt was close to 6%. At the same time, the RMB was also in a weak state, and the floating profit had long since become a floating loss.
It means that it may be six dollars when you borrow it, but you have to pay seven dollars when you return it. Not only did you not pay less, but you also had to pay more.
According to the published data, in 2022, Country Garden lost 8.4 billion yuan and Evergrande lost 9.6 billion yuan because of the exchange rate.
In addition, the interest rate of American debt continues to rise, and "borrowing the new and returning the old" can no longer be played.
After the deleveraging of domestic real estate, many real estate enterprises ran abroad to borrow US dollar debt because they could not get money from banks. Originally, it was quite good and smooth, but after the interest rate of American debt continued to rise, the financing cost became higher and higher, and the road of borrowing new and returning old was blocked.
Country Garden is notoriously afraid to borrow money. Before that, the former chief financial officer of Country Garden wrote a book, which told me to spend 1000 days in Country Garden, revealing many details of Country Garden’s borrowing money. Because the content was too true, it was blocked by President Yang.
It mentioned that President Yang borrowed GLD, and also mentioned that President Yang gambled with international capital. In short, the interest rolled up to several hundred million, but the money it actually earned was not enough.
With more debts, I thought about desperately taking land and developing quickly, but with a large scale, the operation will no longer be fine. In the current market, there is no suspense in the outcome. Country Garden in the first half of this yearThe assets are 1.62 trillion, and the liabilities are 1.36 trillion.More than half of the assets are projects under construction and properties for sale.
Country Garden has made the same mistake as Evergrande today.
What is the ending of Country Garden? Is it the next Evergrande? Or the next Sunac?
This is not difficult to answer. Like Evergrande, it is impossible to rescue directly with invisible hands, because the financial burden cannot be borne, and we can only look at the market.
The market of the third and fourth lines is already established. What are we looking at?
To sum up, there are two points:
1. Can the price be greatly reduced, and the price will be exchanged for the amount, which will pull back the blood;
2. Whether it is possible to realize the massive blood transfusion of financial institutions.
At present, these two points are unrealistic.
1、Recently, Huizhou’s 50% discount on selling houses has been stopped. This is not the first time that a place has stopped selling houses at a discount.
2、Financial institutions should be responsible for their own profits and losses, at their own risk, and giving blood transfusion to housing enterprises like Country Garden is tantamount to beating dogs with meat buns.
Therefore, the end of the next Country Garden, including many private housing enterprises that have already gone out of danger, has been decided. Now I hope that the Baojiao Building that everyone has vowed to shout out can really fall.
Current statistics on Country Garden:
The house that hasn’t been handed in yet,There are about 600 billion, which is more than 600 thousand families according to 1 million suites, but the reality is definitely more than that;
Money owed to suppliers,There are about 300-400 billion;
Money owed to financial institutions,There are about 260 billion.
For the ending of Country Garden, you can also express your views in the comment area ~
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