Fri 05/06/2022 07:21 AM
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UPDATE 1: 7:21 a.m. ET 5/6/2022: Management of Jinke Property Group said during an investor call this afternoon, May 6, attended by Reorg, that it plans to issue RMB 2 billion ($299.7 million) corporate bonds and use the proceeds to repay its RMB 1.25 billion bond due May 28 “20 Jinke 03” and RMB 696 million bond “19 Jinke 03” due July 8. The company has an RMB 2.55 billion issuance quota on hand, management added.

Jinke is discussing the planned issuance with credit ratings firms, stock exchanges and potential investors, according to management.

Management guided that for repaying bonds maturing in the second half of this year, Jinke plans to issue new bonds and optimize its presale supervision escrow accounts.

Jinke has obtained a “no-objection letter” from the exchange for the potential issuance of RMB 690 million asset-backed securities. It is also in the registration process for the RMB 4 billion medium-term notes issuance quota.

The company completed issuing two RMB 1.8 billion super and short-term commercial paper during the fourth quarter of 2021 and issuing an RMB 1.5 billion corporate bond in the first quarter of 2022. It also has redeemed RMB 880 million asset-backed securities and two corporate bonds totalling RMB 2.4 billion.

Management said that they deemed recent policy directives positive, citing the Politburo meeting held on April 29 during which the central government stated that it will support local governments’ efforts to improve real estate policies and optimize the presale escrow account supervision, as reported.

To improve cash flow, Jinke plans to accelerate property sales, revitalize projects and assets and dispose of certain low-efficiency assets.

As of Dec. 31, 2021, Jinke was in breach of one of the “three red lines,” with a 69.5% net gearing ratio, 69.2% debt to asset ratio excluding contract liability and its cash-to-short-term-debt ratio decreased below 1x due to the decline in cash balance and the company’s decision to include certain putable bonds in short-term debt.

Management said during the call that the company aims to raise the cash against short term debt ratio to above 1x by lowering its outstanding debt and improving property sales.

Original Story 12:40 a.m. UTC on May 6, 2022

EARNINGS: Jinke Property Reports FY’21 Audited Operating Revenue of RMB 112.3B, Up 28.1% YoY; Operating Profit Down 28.6% YoY; Net Profit Down 31.1% YoY; Net Profit Attributable to Shareholders of Parent Co. Down 48.8% YoY

Relevant Document:
2021 Annual Report (Chinese)

Jinke Property Group announced last week its audited annual report for the financial year ended Dec. 31, 2021, reporting operating revenue of RMB 112.31 billion ($16.831 billion), up 28.1% from RMB 87.704 billion a year earlier.

Operating profit for the year was RMB 8.736 billion, representing a 28.6% year-over-year decrease from RMB 12.231 billion. Gross profit decreased by 29.6% to RMB 8.579 billion from RMB 12.179 billion in 2020.

The company reported net profit of RMB 6.688 billion, down 31.1% from RMB 9.704 billion a year earlier. Net profit attributable to shareholders of the parent company was RMB 3.601 billion, down 48.8% from RMB 7.03 billion a year earlier.

During the year, operating activities generated a net cash inflow of RMB 14.204 billion, down from RMB 14.508 billion in 2020. Investing activities led to a net cash outflow of RMB 1.794 billion, versus a net cash outflow of RMB 17.108 billion a year earlier. Financing activities cost the company RMB 27.299 billion, reversing a positive net cash inflow of RMB 10.462 billion a year earlier.

As of Dec. 31, 2021, Jinke’s current assets reached RMB 319.072 billion, down from RMB 332.114 billion in 2020. Current liabilities reached RMB 241.393 billion, up from RMB 239.952 billion a year earlier. Total liabilities down to RMB 293.63 billion as of the end of 2021.

As of Dec. 31, 2021, Jinke’s cash balance stood at RMB 28.908 billion, which included RMB 27.645 billion bank deposits and RMB 1.263 billion other cash. Of the total cash balance, RMB 1.057 billion was deposited offshore.

Jinke’s current maturities amounted to RMB 27.963 billion as of the end of 2021, including RMB 18.672 billion of long-term borrowings, RMB 8.249 billion of notes payable, RMB 963.4 million of interest payable and RMB 78.7 million lease liabilities.

Jinke Property’s capital structure is as follows:
 
 
Jinke Property - Pro Forma as of 08/31/2021
 
06/30/2021
 
EBITDA Multiple
(CNY in Millions)
Amount
US$ Amt.
Maturity
Rate
Book
 
Bank and Other Loans
77,686.6
11,951.8
 
 
 
Total Bank and Other Loans
77,686.6
11,951.8
 
5.1x
21 Jinke04
1,000.0
153.8
Jun-24-2025
6.300%
 
20 Jinke04
450.0
69.2
May-28-2025
5.600%
 
21 Jinke Property MTN001
500.0
76.9
Mar-31-2025
6.300%
 
21 Jinke03
2,200.0
338.5
Mar-04-2025
6.300%
 
20 Jinke02
400.0
61.5
Feb-20-2025
6.300%
 
21 Jinke01
750.0
115.4
Jan-28-2025
6.200%
 
20 Jinke Property MTN002
1,000.0
153.8
Aug-25-2024
5.480%
 
20 Jinke Property MTN001
1,000.0
153.8
Jul-30-2024
5.580%
 
20 Jinke03
1,250.0
192.3
May-28-2024
5.000%
 
20 Jinke01
1,900.0
292.3
Feb-20-2023
6.000%
 
19 Jinke03
696.2
107.1
Jul-08-2022
6.500%
 
18 Jinke01
349.7
53.8
Feb-09-2022
7.000%
 
21 Jinke Property SCP002
800.0
123.1
Dec-25-2021
5.900%
 
21 Jinke Property SCP001
1,000.0
153.8
Sep-25-2021
5.400%
 
Shenzhen Qianhai Wutong Convertible Bonds
319.0
49.1
 
 
 
Total Onshore Bonds
13,614.9
2,094.6
 
6.0x
$300 Million 8.375% Senior Notes Due 2021
2,112.5
325.0
Jun-20-2021
8.375%
 
Total Offshore Bonds
2,112.5
325.0
 
6.1x
Perpetuals
4,262.6
655.8
 
 
 
Total Perpetuals
4,262.6
655.8
 
6.4x
Total Debt
97,676.6
15,027.2
 
6.4x
Less: Cash and Equivalents
(37,030.1)
(5,696.9)
 
Plus: Restricted Cash
629.1
96.8
 
Net Debt
61,275.6
9,427.0
 
4.0x
Operating Metrics
US$ Amt.
LTM Reorg EBITDA
15,282.0
2,351.1
 
 
Liquidity
Plus: Cash and Equivalents
37,030.1
5,696.9
 
Less: Restricted Cash
(629.1)
(96.8)
 
Total Liquidity
36,401.0
5,600.2
 
Credit Metrics
Gross Leverage
6.4x
 
Net Leverage
4.0x
 

Notes:
Source: Company filings, Wind, Cbonds; 2021E EBITDA from WIND market consensus
Pro Forma: For Pro forma, the proceeds from the new bonds were added to cash as the exact use of proceeds for each of the bond raised remains unclear; The repayment for matured debts were subtracted from cash as the exact source of funding used to repay the debt remains unclear
US$ Translation: CNY/USD rate used for USD conversion is 6.5.
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