Thunderstorm! Another listed real estate company was forced to liquidate.

The first listed real estate company to be forced to liquidate is coming! Since

the current debt crisis of real estate enterprises, Hengda, Rongchuang, Jiashi International (Sunshine City), Fancy Year, Jiayuan International and other listed real estate enterprises have been petitioned for "liquidation". Unexpectedly,

however, it was the first listed real estate company to be formally liquidated.

Listed real estate companies were "liquidated"

on May 2, and bad news came from Jiayuan International, a listed real estate company. The Hong Kong court issued a "liquidation order" to liquidate the company in order to repay the overdue debt of US $14.5 million (equivalent to about HK $113 million).

According to Leju Finance and Economics, Jiayuan International was also "confused" about the sudden ruling. Because 80% of the creditors of Jiayuan International's previous restructuring plan had "agreed", but it was unexpected that the court would directly order "liquidation".

It is reported that after the debt expired last year, Jiayuan International has been negotiating with creditors in the hope of a proper solution. But creditors wanted to get the money as soon as possible, so they filed a liquidation petition with the court in September last year. After

entering the court proceedings, Jiayuan International applied for several postponements of the hearing of the liquidation petition. From March 1 this year, it was postponed to March 6, and finally to May 2.

Then, on May 2, the "liquidation" was decided directly. Because the judge thought that the company had not "made enough efforts to justify not winding up"; and that although 80% of creditors agreed to the reorganization, the reorganization plan was not specific and "only an idea".

At this point, Jiayuan International still has the opportunity to appeal or apply for a stay of execution.

However, once the "liquidation order" is issued, it is basically very difficult to reverse the pattern. Unless the enterprise pays back the money first. Otherwise, the liquidation will enter the actual implementation stage, and the provisional liquidator will take over the company and dispose of the assets to repay the debts. In 2023, the first listed real estate company to be forced to liquidate was born. Is Jiayuan International lying flat or even tanking when the dream of

"time for space" is broken

?

Jiayuan International first experienced liquidity difficulties in March last year. At that time, the fixed financing products issued by Jiayuan International had a substantial default, amounting to about 50 million yuan. In May 18th, Jiayuan International's share price "flash crash", a decline of more than 41%, forced an emergency suspension. After the resumption of trading on May 27, the stock price fell another 39%.

Since then, Jiayuan International has begun to actively save itself.

First, it planned to sell 4.5 billion shares of Jiayuan Service, and the buyer at that time was Jinke. Jinke lost himself, and soon the deal came to an end. Later, Jiayuan International sold the commercial and residential complex project under construction in Yancheng, with a withdrawal of about 879 million yuan. Then cooperate with China Xinda to help Jiayuan International revitalize its stock assets, optimize the allocation of resources and improve liquidity.

Since then, according to public information, Jiayuan International has not done much to "actively" sell assets. Because "active" selling means a substantial discount, which means cutting meat. On August 26

last year, the management of Jiayuan International held a symposium with investors. At the meeting, Shen Tianqing, the boss of Jiayuan International, said emotionally, "I feel sad in the face of everyone.". He also said, "I hope to work with investors to exchange time for space", "Jiayuan will insist on a responsible attitude towards everyone, so as not to lie flat", "I hope investors will give Jiayuan a chance".

However, this is just a good wish. The "time for space" that Jiayuan International is looking forward to has been delayed. Data show that in the first quarter of this year, Jiayuan International's contract sales amounted to about 1.289 billion yuan, compared with 4.52 billion yuan in the same period last year, down 71.48% from the same period last year.

Jiayuan International has postponed the hearing of liquidation petitions three times, possibly in the hope of achieving positive cash flow with the help of the recovery of the property market, thus resolving the debt crisis.

At present, Jiayuan International has not released the annual report data for 2022. The reason was "the recent resignation of a number of key employees of the company, particularly those in the financial reporting unit" and the change of auditors of the subsidiary.

Does Jiayuan International have the strength to repay?

In fact, at the mid-term performance meeting of Jiayuan International in 2020, Shen Tianqing personally disclosed that about 60% of the real estate business of the whole group was under his personal company's name. At that time, he also promised to "be willing to gradually inject these assets into listed companies in the future".

According to a previous data, Jiayuan Group's five real estate groups, Shencheng Group, Hangzhou Group, Anhui Group, Jingcheng Group and Wenlu Group, have not entered the listed company sector.

Therefore, if Shen Tianqing is willing to save "Jiayuan International", he should have the ability. After all, there are still many assets under his personal control. However, in the face of listed companies in deep trouble, is he willing to sacrifice his personal interests to rescue listed companies?

Some investors in the stock analysis pointed out that "Shen boss weighed the pros and cons, decided to break his wrist, throw away Jiayuan International, retain Jiayuan Domestic Group", "liquidation is the best choice for Shen", but the investors were miserable and could not get a penny.

According to the view of investment bankers quoted by Wind Financial News, "the court seldom orders liquidation without compulsion". Once promulgated, even if the bankrupt company may only be an overseas entity of the real estate enterprise or a creditor with limited scale, the negative impact of liquidation and dissolution on the company's brand, reputation and the healthy development of domestic projects can not be ignored. The

crisis has continued

to this year, and many "thunderstorm" housing enterprises hope that the dream of "time for space" may be shattered. Because this may be a "false proposition". According to the data of Zhongzhi Research Institute, from January to March, the total sales of TOP100 real estate enterprises were 17589 500 million yuan, an increase of 8.2% over the same period last year, which is the first growth since 2022. However, the differentiation between housing enterprises has intensified seriously, and the sales of private housing enterprises with debt crisis have almost all declined. For example:

Sunac China, down 59% year-on-year;

CIFI Group, down 26% year-on-year;

Agile, down 20% year-on-year;

Metro Holdings, down 30% year-on-year;

Shimao Group recorded a year-on-year decline of 33%;

Zhongnan Land recorded a year-on-year decline of 25%;

the sales of leading real estate enterprises such as Poly, China Shipping, China Resources, China Merchants, Greentown, Longhu, Huafa and C & D increased substantially, and the industry concentration was further strengthened.

But no one bought the houses of private housing enterprises that had or had a debt crisis. Then, the thunderstorm housing enterprises seem to have fallen into a "dead cycle": debt default → causing buyers to worry → leading to poor sales → further leading to repayment difficulties, and then continue to thunderstorm.

Below this kind of pattern, the creditor that cannot get money tardy, see sale pick up again again, collapse not to live above all. The capital market is also very difficult to calm down. For example, "Xinli Holdings" became the first listed real estate company to be delisted by the Hong Kong Stock Exchange this year. For example, A-share "Blue Light Development" may be the first listed real estate company to be delisted from the Shanghai Stock Exchange this year. Yan Yuejin, research director of Yiju Research Institute, pointed out that "we should prevent the debt crisis of housing enterprises from evolving into a stock market crisis".