20210324-招银国际-Languang__Near-term_liquidity_pressure_eases_5页_482kb
报告摘要
CMBI Credit Commentary Summary
Core Content
This document provides a credit commentary on Languang Development (LGUANG), focusing on its liquidity position, refinancing needs, and debt management strategies as of early 2021. The analysis highlights the company's efforts to improve its financial standing and manage its debt obligations.
Main Points
1. Liquidity Improvement
- Cash Position: By the end of 2020, Languang's cash balance was RMB29.7bn, and its cash/short-term debt ratio improved to 1.3x from 1.1x.
- Subsidiary Disposal: The company is expected to receive approximately RMB4.9bn by April 2021 from the sale of Languang Justbon (2606.HK) and RMB500mm by May 2021 from the sale of Dikang Pharmaceutical.
- Offshore Cash Deposits: RMB1.99bn received from Country Garden Services (6098.HK) is kept offshore.
- Bond Buyback Consideration: The company is considering offshore bonds buyback to manage its debt structure.
2. Refinancing Pressure
- Lumpy Maturity in 3Q2021: Languang faces a significant RMB9bn maturity in the third quarter of 2021.
- Expected Cash Inflows: The RMB5bn from subsidiary disposals by May 2021 is expected to alleviate refinancing pressure.
- Onshore Maturities in 2021: In 3Q2021, Languang has RMB3bn onshore bonds, RMB1.3bn offshore bonds, and RMB4bn other financings due.
- Recent Onshore Issuance: The company issued an RMB1bn MTN onshore despite tight funding conditions, indicating some confidence in its liquidity.
3. Land Investment and Debt Reduction
- Land Investment Cap: Management guides that land acquisition will be capped at 30% of cash collection (RMB70bn), down from RMB31bn in 2020.
- Net Gearing: This strategy is expected to bring net gearing down to 85-90% by end-2021, from 100% in 2020.
- Landbank Lifespan: The company's current landbank can support 2.5x to 3x of contracted sales, indicating a strong buffer for future development.
4. Contracted Sales Performance
- Strong Performance in 2M2021: Languang reported RMB16bn gross sales (+105% yoy) and RMB10bn cash collection in the first two months of 2021.
- Guided Saleable Resources: The company guides total saleable resources at ~RMB180bn, with a sell-through ratio of 65% and cash collection ratio of 85%.
- Credit Driver: Maintaining good contracted sales traction is seen as the most important credit driver for the company.
Key Information
Maturity Schedule (Onshore Corporate Bonds)
| Bond Name | Amount (RMB million) | Rate | Maturity Date | Notes |
|---|---|---|---|---|
| 16LanguangMTN001 | 700.0 | 5.90% | 2021/1/28 | Repaid |
| 18LanguangMTN001 | 1,000.0 | 7.80% | 2021/3/15 | Repaid |
| 19Languang01 | 1,100.0 | 7.50% | 2022/3/19 | Repaid |
| 18Languang06 | 30.0 | 7.50% | 2021/4/27 | - |
| 18Languang07 | 600.0 | 7.90% | 2021/5/29 | - |
| 19LanguangMTN001 | 900.0 | 7.50% | 2021/7/11 | - |
| 19Languang02 | 1,100.0 | 7.50% | 2021/7/23 | - |
| 20LanguangCP001 | 700.0 | 6.50% | 2021/7/29 | - |
| 16LanguangMTN003 | 280.0 | 7.50% | 2021/8/12 | - |
| 16Languang01 | 1,181.2 | 7.40% | 2021/9/14 | - |
| 19Languang08 | 300.0 | 7.50% | 2022/12/13 | - |
| 20Languang02 | 750.0 | 7.15% | 2023/3/16 | - |
| 19Languang04 | 300.0 | 7.00% | 2022/8/6 | - |
| 20LanguangMTN002 | 1,000.0 | 7.00% | 2022/8/29 | - |
| 20LanguangMTN003 | 1,500.0 | 7.00% | 2022/10/26 | - |
| 19Languang07 | 400.0 | 7.50% | 2022/11/22 | - |
| 21LanguangMTN001 | 1,000.0 | 7.20% | 2023/3/11 | Issued in 2021 |
| 20LanguangMTN001 | 500.0 | 7.20% | 2023/5/11 | - |
| 20Languang04 | 800.0 | 7.00% | 2023/7/31 | - |
| Total Onshore Corporate Bonds | 13,141.2 | - | - | - |
Maturity Schedule (Offshore Corporate Bonds)
| Bond Name | Amount (RMB million) | Rate | Maturity Date | Notes |
|---|---|---|---|---|
| LGUANG 9 03/04/2021 | 469.8 | 9.00% | 03/04/2021 | Repaid |
| LGUANG 12 04/25/2021 | 2,706.5 | 12.00% | 04/25/2021 | - |
| LGUANG 8.85 01/10/2022 | 1,934.7 | 8.85% | 01/10/2022 | - |
| LGUANG 11 06/04/2022 | 2,902.1 | 11.00% | 06/04/2022 | - |
| LGUANG 10.4 03/09/2023 | 1,934.7 | 10.40% | 03/09/2023 | - |
| Total Offshore Corporate Bonds | 9,947.9 | - | - | - |
Conclusion
Languang is taking proactive steps to improve its liquidity and reduce refinancing pressure by selling subsidiaries and managing its land investment. The company's strong contracted sales performance in early 2021 and the expected cash inflows from asset disposals are seen as positive developments. The disciplined approach to land investment and the reduction in net gearing are also viewed as beneficial for its credit profile. Overall, the company is expected to maintain a stable liquidity position through 2021, supported by its asset disposal plans and improved cash generation.
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