Fri 03/26/2021 02:42 AM
Share this article:
Management of Chinese property developer Yuzhou Group assured investors on a conference call held this afternoon, March 26, which Reorg attended, that the company maintains a strong cash flow and balance sheet despite forecasting a 94% year-over-year decline in net profit for 2020. The company will consider buying back its offshore notes to help stabilise bond prices once it publishes 2020 annual results next week, management said during the call.

For more coverage on Yuzhou Group and other performing and distressed credits in Asia please request a trial at www.reorg.com/trial

The call was hosted by chairman Lam Lung On and chief financial officer Chiu Yu Kang and arranged by JP Morgan Securities after prices of its offshore notes collapsed across the curve this morning, as reported.

Management said on the call that short sellers had spread false information about the company but the company is unable to comment due to compliance reasons until the annual results are officially released on March 30.

Management reiterated during the call that the expected decline in profit was due to delay in the development and delivery of property projects, as well as low selling prices last year amid the Covid-19 pandemic.

The company had a total cash of over RMB 34 billion ($5.2 billion) as of Dec. 31, 2020 while net gearing ratio is still in line with the government’s three red lines requirement. Dividend payout is expected to be no less than the level for 2019, the chairman said, adding that he, as largest shareholder, will continue to receive dividend payments in the form of new shares.

Yuzhou management did not take any questions from investors during the call.

Yuzhou disclosed in an announcement last night that, based on unaudited accounts, bank and other borrowings, corporate bonds and senior notes totalled RMB 63.9 billion as of Dec. 31, 2020, up from RMB 55.669 billion a year earlier.

Cash and cash equivalents, restricted cash and non-pledged time deposits with original maturity of over three months totalled RMB 34.469 billion, down from RMB 35.5 billion 12 months ago, while total equity increased from RMB 28.728 billion as of Dec. 31, 2019 to RMB 34.303 billion.

Net gearing ratio increased to 85.8% as of end-2020 from 70.17% a year earlier, the company said.

Below is Yuzhou’s capital structure:

























































































































































































































































































































Yuzhou Group Holdings


06/30/2020

EBITDA Multiple

(CNY in Millions)

Amount

US$ Amt.

Maturity

Rate

Book


Bank Loans

13,123.9

1,874.8



Other Loans

6,023.5

860.5



Total Bank Loans & Other Borrowings

19,147.4

2,735.3

2.1x

15 Yuzhou 01

3,000.0

428.6

Dec-2020

7.500%

18 Yuzhou 04

800.0

114.3

Sep-2021

7.850%

18 Yuzhou 03

1,200.0

171.4

Sep-2021

6.980%

18 Yuzhou 01

1,000.0

142.9

Aug-2020

6.980%

19 Yuzhou 02

1,500.0

214.3

Apr-2024

7.500%

19 Yuzhou 01

2,000.0

285.7

Apr-2024

6.500%

Total Onshore Unsecured Debt

9,500.0

1,357.1

3.1x

$375M 6.375% USD Senior Bonds Due 2021

2,625.0

375.0

May-2021

6.375%

$352M 7.900% USD Senior Bonds Due 2021

2,464.0

352.0

May-2021

7.900%

$242M 8.625% USD Senior Bonds Due 2022

1,694.0

242.0

Jan-2022

8.625%

$350M 6.000% USD Senior Bonds Due 2022

2,450.0

350.0

Jan-2022

6.000%

$500M 8.500% USD Senior Bonds Due 2023

3,500.0

500.0

Feb-2023

8.500%

$400M 6.000% USD Senior Bonds Due 2023

2,800.0

400.0

Oct-2023

6.000%

$250M 6.000% USD Senior Bonds Due 2023

1,750.0

250.0

Oct-2023

6.000%

$500M 8.500% USD Senior Bonds Due 2024

3,500.0

500.0

Feb-2024

8.500%

$500M 8.375% USD Senior Bonds Due 2025

3,500.0

500.0

Oct-2024

8.375%

$400M 7.7% USD Senior Bonds Due 2025

2,800.0

400.0

Feb-2025

7.700%

$500M 8.300% USD Senior Bonds Due 2025

3,500.0

500.0

May-2025

8.300%

$400M 7.700% USD Senior Bonds Due 2025

2,800.0

400.0

Feb-2025

7.700%

$40M 7.500% USD Senior Bonds Due 2021

280.0

40.0

Jan-2021

7.500%

$645M 7.375% USD Senior Bonds Due 2026

4,515.0

645.0

Jan-2026

7.375%

Total Offshore Senior Bonds

38,178.0

5,454.0

7.2x

Total Debt

66,825.4

9,546.5

7.2x

Less: Cash and Equivalents

(37,254.5)

(5,322.1)

Plus: Restricted Cash

2,307.1

329.6

Net Debt

31,878.0

4,554.0

3.4x

Plus: Market Capitalization

13,049.6

1,864.2

Enterprise Value

44,927.6

6,418.2

4.8x

Operating Metrics

US$ Amt.

LTM Reorg EBITDA

9,287.5

1,326.8


Liquidity

Plus: Cash and Equivalents

37,254.5

5,322.1

Less: Restricted Cash

(2,307.1)

(329.6)

Total Liquidity

34,947.4

4,992.5

Credit Metrics

Gross Leverage

7.2x

Net Leverage

3.4x

Notes:
Sources: Company filings, Wind, Reorg; market capitalization as of 6 Jan 2021; 2020E EBITDA is used.
US$ Translation: CNY/USD rate used for USD conversion is 7.



 
Share this article:
This article is an example of the content you may receive if you subscribe to a product of Reorg Research, Inc. or one of its affiliates (collectively, “Reorg”). The information contained herein should not be construed as legal, investment, accounting or other professional services advice on any subject. Reorg, its affiliates, officers, directors, partners and employees expressly disclaim all liability in respect to actions taken or not taken based on any or all the contents of this publication. Copyright © 2021 Reorg Research, Inc. All rights reserved.
Thank you for signing up
for Reorg on the Record!