Jinke shares, rebirth delayed
Zebra Consumer Yang Zhe
Recently, *ST Jinke disclosed that it has extended the deadline for submitting the restructuring investment plan by three months through judicial procedures to complete the massive workload. At the same time, the administrator agreed to extend the deadline for submitting the restructuring investment plan by potential investors to November 8.
As the first domestic real estate company with a market value of over 100 billion yuan to voluntarily initiate restructuring, the progress has been relatively fast since the court accepted the application in April this year, and it has reached a critical stage. However, whether the draft restructuring plan can be voted on by creditors and approved by the court in the fourth quarter of this year as scheduled remains uncertain.
Judging from the company's public statements, it has high hopes for this restructuring. It is expected that once the restructuring is finalized and with the active empowerment of restructuring investors, the company's financial pressure and credit will be significantly alleviated.
But for now, all we can do is wait quietly.
Extension of the Restructuring Plan
On the evening of October 16, *ST Jinke (000656.SZ) disclosed information showing its caution and emphasis on the implementation of the restructuring plan.
In the announcement, the company disclosed that, through the civil ruling procedure of the Fifth Intermediate People's Court of Chongqing, the deadline for submitting the draft restructuring plan for the company and its wholly-owned subsidiary Chongqing Jinke has been extended by three months, to January 22 next year.
In fact, extending the deadline for submitting the draft restructuring plan is not necessarily a bad thing.
According to the announcement, most potential investors have stated that the company has numerous project entities and a large debt scale, resulting in a massive workload for due diligence, internal communication, and decision-making. The relevant work has not yet been completed, so they have applied for an appropriate extension of the deadline for submitting the restructuring investment plan.
The company believes that to obtain more and better investment plans, ensure the success of the restructuring, and protect the interests of small and medium shareholders and creditors, it applied to the court for an extension of the draft restructuring plan.
In addition, after research by the administrator, the deadline for potential investors to submit restructuring investment plans has been extended to November 8 this year.
As the first real estate company in the country to voluntarily initiate restructuring with a market value of over 100 billion yuan, the company's restructuring progress has been relatively fast. On April 22 this year, the restructuring application was accepted by the Fifth Intermediate People's Court of Chongqing. On July 25, the first creditors' meeting was held, and all proposals were approved.
As of August 16, the administrator has received formal registration materials from 12 potential restructuring investors, of which nine have successfully registered by paying deposits.
On the Shenzhen Stock Exchange's interactive platform in early July, the company responded to investors that it is cooperating with the administrator to carry out various restructuring and investment attraction tasks, with plans to complete them in the fourth quarter of 2024.
Debt Pressure
While fully committed to restructuring, *ST Jinke also faces lawsuits and arbitrations, with enormous debt pressure.
On October 14, the company announced that, in addition to previously disclosed litigation and arbitration cases, the company and its subsidiaries have received new litigation and arbitration cases totaling 800 million yuan, accounting for 22.81% of the net assets in the latest audited report. Among them, cases where the company and its subsidiaries are defendants or third parties involve 717 million yuan, mainly arising from financial loan contract disputes, construction project contract disputes, and commercial housing sales contract disputes.
This is just the tip of the iceberg. The 2024 interim report disclosed that as of the end of August, excluding separately disclosed major litigation and arbitration cases, the company and its subsidiaries have received litigation and arbitration cases totaling 18.104 billion yuan over the past 12 months, accounting for 516.09% of the company's net assets in the latest audited report. Among them, cases where the company and its subsidiaries are defendants or third parties involve 17.802 billion yuan.
As of the date of the interim report, the company and its subsidiaries have entered the execution stage for as many as 104 other major cases.
Resolving these disputes will depend on improvements in the company's cash flow situation.
In the first half of this year, the company achieved operating income of 16.048 billion yuan and a net profit attributable to shareholders of -3.801 billion yuan, representing year-on-year declines of 38.45% and 95.96%, respectively. In the first half of the year, market sentiment in the real estate sector was cautious, with sales at a bottoming stage. The company's core real estate sales and operations business revenue was 15.765 billion yuan, a year-on-year decrease of 38.24%.
As of June 30, the company's monetary funds amounted to 4.596 billion yuan (including restricted funds of 2.519 billion yuan and presale supervision funds of 548 million yuan), while the total principal of interest-bearing debt was 71.402 billion yuan. The principal of overdue interest-bearing debt totaled 31.798 billion yuan (including short-term loans overdue of 5.038 billion yuan, current portion of non-current liabilities overdue of 21.210 billion yuan, and other payables overdue of 5.550 billion yuan). In addition, there are also overdue commercial bills and some operating payables.
The Fading "Golden Flower"
In the late 1990s, Huang Hongyun, a former construction contractor, moved from Fuling to Chongqing to establish Jinke, benefiting from the establishment of the municipality and industry development, and quickly grew. It was once known as one of the "Six Golden Flowers" of Chongqing's real estate companies, alongside Dongyuan, Xiexin, Huayu, Longfor, and Caixin Development.
During the industry's upward phase, this batch of Chongqing-based real estate companies expanded nationwide. Under Huang Hongyun's leadership, Jinke made significant strides in the national market, rapidly growing in scale.
In 2011, its sales scale exceeded 10 billion yuan, reaching 13.448 billion yuan. Seven years later, it surpassed 100 billion yuan, entering the ranks of real estate companies with a market value of over 100 billion yuan. Its operating income increased from 9.866 billion yuan in 2011 to 112.3 billion yuan in 2021.
Ranking among the top 20 in the industry and becoming a real estate company with a market value of over 100 billion yuan, the company was once at its peak. In the year its revenue first exceeded 100 billion yuan, Huang Hongyun and his family ranked 2141st on the Forbes Global Rich List with a fortune of $1.4 billion.
This also became a watershed moment for Huang Hongyun and Jinke. In 2022, the company's net profit attributable to shareholders was a loss of 21.39 billion yuan, a year-on-year plunge of 694.13%. In 2023, the net profit attributable to shareholders was a loss of 8.732 billion yuan, and it has not recovered yet.
Like Xiexin and Dima, Jinke did not escape the liquidity crisis amid sudden changes in the market environment. Despite selling assets one after another, it still could not escape its fate.
In the first half of 2024, the company tightened its belt to overcome difficulties. The pre-tax remuneration of the core management team decreased by 47%, administrative expenses decreased by 6.13% year-on-year, and marketing expenses decreased by 37.83% year-on-year.
With the continuous optimization and implementation of domestic real estate policies this year and the acceleration of the company's restructuring, Jinke still has a chance to get back on track.
As of June this year, the company and its invested enterprises have a total salable resource area of approximately 48.53 million square meters, which is the company's biggest trump card for a turnaround.
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