Viewpoint Network Almost at the same time as Zhenro, Ronshine released its 2022 annual performance report in the middle of the night on March 31. At the end of the leverage, Cyclonus stalled.
During the reporting period, Ronshine China’s revenue was 30.059 billion yuan, a decrease of about 9.69% compared with last year, with a gross loss of 6.12 billion yuan.
Among them, the revenue of the property sales segment was 28.64 billion yuan, a year-on-year decrease of 9.66%. The confirmed construction area of the delivered properties was 1.3122 million square meters, a year-on-year decrease of approximately 42.56%; the revenue of the construction service segment was 646 million yuan, a year-on-year decrease of 30.83%; rental income , hotel operations and other sectors earned 773 million yuan, a year-on-year increase of 19.63%.
At the same time, the profit for the year turned into a loss from last year’s 1.727 billion yuan, with a loss of about 12.44 billion yuan. The loss attributable to the company’s owners was about 11.235 billion yuan, compared with 1.295 billion yuan last year; the debt ratio increased from 66% to 107%.
The financial report explained that the profit loss was mainly due to the fact that compared with 2021, the group will deliver different property portfolios in 2022, and the provision for inventory depreciation has increased significantly.
In 2022, Ronshine China’s financial assets will be impaired by 788 million yuan, the fair value loss of investment properties will be 739 million yuan, and other net losses recorded in the year will be about 1.151 billion yuan, mainly due to disposal losses caused by the disposal of certain projects.
It should also be noted that during the reporting period, non-controlling shareholders of Ronshine China accounted for 1.205 billion yuan of comprehensive losses for the year, accounting for 9.7% of the company’s total losses for the year, and non-controlling shareholders’ equity was 24.448 billion yuan, accounting for 79.8% of total equity. Minority interests are not equivalent to attributable profit or loss.
The second half of the debt bureau
In the first half of 2022, Ronshine is still frequently repaying debts to save itself.
For example, on February 24, 2022, the cancellation of 194 million US dollars of notes was completed, and the next day it was announced that funds had been arranged to be transferred to overseas accounts to repay the outstanding principal amount of 263 million US dollars of notes and the accumulated unpaid interest of 23.9657 million US dollars.
On April 27, 2022, Ronshine announced that it had arranged for RMB 727 million to be remitted to the special plan custody account to repay the Zhongshan Securities-Ronshine Group Phase 3 asset-backed special plan due in two days.
However, this decency failed to continue in the second half of the year.
Ronshine China’s 8.1% senior notes due in June 2023 in an amount of US$12.798 million, and the 7.35% senior notes due in December 2023 in an amount of US$15.0675 million The interest is due on June 9, 2022 and June 15, 2022 respectively, and has not yet been repaid.
In addition, the 8.75% senior notes due in 2022 and the 8.95% senior notes due in 2023 with a total principal amount of US$688 million and US$413 million were issued on October 25, 2022 and January 22, 2023, respectively. Due, including accrued and unpaid interest, a total of US$718 million and US$431 million were due and payable, but also outstanding.
As of December 31, 2022, Ronshine China’s total borrowings were approximately 42.404 billion yuan, a decrease of 23.98% from the 55.778 billion yuan at the end of 2021. The weighted average effective interest rate of outstanding loans (including bank loans, trust and other loans, domestic corporate bonds, senior notes and asset-backed securities) is approximately 6.86%, an increase of 0.5 percentage points from 2021.
Debt has been reduced, but cash flow has been narrowed even more. At the end of the period, Ronshine China had cash and bank balances of approximately 9.544 billion yuan, a decrease of 56.73% from 22.055 billion yuan at the end of 2021.
Among them, available cash and equivalents in hand were 4.788 billion yuan, a decrease of 59.15% from 11.72 billion yuan in the previous year; restricted cash was 3.975 billion yuan, a decrease of 38.69% from 6.483 billion yuan in the previous year; 3.853 billion yuan per year, a decrease of 79.73%.
As of the end of 2022, Ronshine China has 1,215 employees, which is more than half of the 2,449 employees at the end of 2021. The corresponding employee expenses are 293 million yuan, a decrease of 66.82% from 2021. With debts under pressure, Ronshine had to cut down on food and clothing.
“Land King” sequelae
Reflected in investment and expansion, the number of land acquisitions by Rongxin will be zero in 2022.
Looking back at 2021, Ronshine China has expanded its reserves against the market, adding 42 new land projects with a total construction area of 6.476 million square meters. The average cost of land acquisition is about RMB 11,259 per square meter (according to Calculated by volume area), the equity amount is about 19.5 billion yuan.
Although compared with the land acquisition amount of 27.7 billion yuan in 2020, the unit cost continues to increase. The average cost of land acquisition from 2019 to 2021 is 6,648 yuan/square meter, 9,596 yuan/square meter and 11,259 yuan/square meter m (calculated by volumetric area).
The roar of the motor of the “Earth King Harvester” will come to an abrupt end in 2022.
Ronshine China’s financial report stated that it will continue to focus on the current property development business and the acquisition of high-quality land in China’s first-tier and second-tier cities. As of the date of the announcement, the group has no specific plans for future investment.
On December 31, 2022, Ronshine China’s total construction area was approximately 24.9 million square meters, a year-on-year decrease of 3.8 million square meters, and the average cost of land storage per square meter was 8,022 yuan, a slight decrease from 2021’s 8,202 yuan.
Among them, 65 projects have been completed, with a total construction area of 7.9571 million square meters and an equity construction area of 4.1336 million square meters. 74 projects are under construction with a planned total construction area of 17.031 million square meters and an equity construction area of 9.5907 million square meters.
In 2022, there were rumors of suspension of work on several projects in Shanghai, Hangzhou, Zhengzhou and other places. Among them, Rongxin Haina Impression, a new project in Jiading, announced the resumption of work at the end of June 2022, and the house is expected to be handed over on August 30, 2023. Some owners revealed that the developer has made it clear that if the delivery cannot be made on time, compensation will be made according to the contract.
In addition to debt pressure, Ronshine China will also have to deal with delivery problems.