Joy City: A Hidden Fund Pool

Little-known Allianz Huijin has established several project companies in cooperation with Joy City. Some project companies are about to enter the initial stage of settlement or settlement, and Allianz Huijin chooses to quit early and leave the profits to Joy City.

Due to the epidemic situation, Joy City (00003 1. SZ), with multiple shopping centers, is more affected than ordinary real estate enterprises, which can be said to be worse for companies with poor chemical industry.

In 20 19, Joy City spared no expense to increase loans and land acquisition, with a view to striding towards the goal of 100 billion yuan. However, as of the first half of 2020, the company's contracted sales showed a significant negative growth, which was weaker than the average level of the top 100 industries.

However, with the substantial growth of minority shareholders' rights and interests, Joy City has achieved a rapid decline in its net debt ratio. By the end of 20 19, the minority shareholders' rights and interests of Joy City had exceeded 23 billion yuan, exceeding the rights and interests of returning to the mother. However, looking at the annual reports in recent years, compared with the net profit of returning to the mother, the investment of minority shareholders in Joy City is difficult to match most of the time.

Among the partners of Joy City, many financial institutions, such as trust companies and private equity funds, appeared one after another, and then withdrew early in the later stage of the project. So, where is the return of investing billions of partners?

Among many partners, a private equity fund company named Allianz Huijin Asset Management Co., Ltd. (hereinafter referred to as "Allianz Huijin") surfaced. This private equity firm and Joy City have established several project companies, and they keep withdrawing from the project companies, which seems to be a hidden fund platform of Joy City. As of press time, Joy City did not reply to the interview of Securities Market Weekly.

Ratio of minority shareholders to net liabilities

Joy City's recent performance forecast revealed that the company expects the net profit attributable to shareholders of the parent company to be about 450-650 million yuan in the first half of 2020, down 65%-76% year-on-year.

Even if the performance drops sharply, Joy City's net debt ratio has improved significantly. Wind statistics show that the company's net debt ratio was 97.65% at the end of 20 19, and slightly increased to 105.97% at the end of the first quarter of 2020, significantly lower than171.18 at the end of 20/kloc-0.

The successful restructuring and other reasons are the direct reasons for the sharp decline in the net debt ratio of Joy City. Joy City was formerly COFCO Real Estate. In 20 19, COFCO acquired Joy City Real Estate by issuing shares, and the company became a comprehensive residential and commercial real estate company under COFCO. In addition, the company also raised 2.426 billion yuan, which is the only case that A-share real estate equity financing has been successfully issued in full since 20 18.

After the completion of the restructuring of 20 19, Joy City achieved a significant decrease in its net debt ratio. The net debt ratio generally refers to "(interest-bearing liabilities-cash)/owner's equity". Therefore, if we want to maintain a steady decline in the net debt ratio, we must work hard on these main indicators. For example, while the interest-bearing liabilities increase, the company's cash will increase to a greater extent, and the owner's equity will also maintain a corresponding growth.

At the end of 20 19, the total owner's equity of Joy City was 425,465,438+0 million yuan, of which the minority shareholders' equity was 236,543.8+0.3 million yuan and the attributable equity was 654.38+0.94.1654.38+0 million yuan. In other words, the minority shareholders' equity of Joy City has exceeded the ownership equity of the company. Under the strong "support" of minority shareholders' rights and interests, the owners' rights and interests of the company are naturally enlarged, which ensures the growth of the denominator of the company's net debt ratio.

Before the reorganization, that is, COFCO real estate stage, the rights and interests of minority shareholders of listed companies were not low. The annual report shows that at the end of 20 15-20 18, the minority shareholders' rights and interests of COFCO Real Estate at that time were 5 107 million yuan, 5.395 billion yuan, 510.40 million yuan and 5.899 billion yuan respectively, and the rights and interests attributable to shareholders at the same time were respectively.

Although the rights and interests of minority shareholders are not small, the minority shareholders of Joy City did not share the matching net profit. During the period from 20 15 to 20 19, the gains and losses of minority shareholders of listed companies were 279 million yuan, 6130,000 yuan, 790 million yuan, 6160,000 yuan and132,700 yuan respectively. In the same period, the company's net profit returned to the mother was 722 million yuan and 720 million yuan respectively.

Therefore, the average return on equity of minority shareholders in Joy City is 5.46%, 65,438+06,438+0.36%, 65,438+05.45%, 65,438+00.46% and 5.74 respectively.

Except for 20 16 and 20 17, the return on equity of minority shareholders in listed companies is much lower than that of the company.

Theoretically, the return on equity of minority shareholders should be not far from that of the parent company. For example, the return on equity of minority shareholders such as Vanke and Gemdale is similar to that of the parent company. If the return on net assets of minority shareholders is much lower than that of the shareholders of the parent company, it means that minority shareholders have suffered losses, and vice versa.

Whether Joy City has profit manipulation through minority shareholders' rights and interests is only known by the company itself. Judging from the rate of return of the company's minority shareholders, is this another trick used by real estate enterprises?

Allianz Huijin surfaced.

Beijing Daoxiang Four Seasons Real Estate Development Co., Ltd. (hereinafter referred to as "Beijing Daoxiang Four Seasons") is a new subsidiary of Joy City in 20 19. In June this year, Joy City signed an agreement with Minmetals Trust, and the company acquired 49.9 1% equity of Beijing Daoxiang Siji for177 million yuan. After the acquisition is completed, Joy City will hold 99.82% equity of Daoxiang Siji, thus bringing the company into the scope of merger. Previously, Beijing Daoxiang Four Seasons was a joint venture of Joy City.

Beijing Daoxiang Season is mainly responsible for the development of COFCO Jingxi Xiangyun Project in Fangshan District, Beijing. According to the announcement, the project started in 20 16 and is expected to be completed in 20 19.

Construction started on 20 16 and started on 20 18. Because the project of COFCO Jingxi Xiangyun is in the pre-sale period, the project cannot contribute to the report. During this period, the income of Beijing Daoxiang Four Seasons was basically negligible, but the profit was completely lost. The loss in 20 16 was nearly 6 million yuan, and the losses in 20 17 and 20 18 were further enlarged to about 80 million yuan and 50 million yuan.

Minmetals Trust invested in Beijing Daoxiang Siji at the end of 20 16. The announcement at that time showed that Minmetals Trust increased its capital by 8130,000 yuan to Beijing Daoxiang Siji and acquired 4995438+0% equity of the project company.

By 2065438+June 2009, Joy City acquired the shares held by Minmetals Trust. In about two and a half years, Minmetals Trust received a premium of 264 million yuan when it withdrew its equity, with a return rate of 32.47%. Even after the annualized income, it has achieved a good input-output ratio.

However, compared with the return of Joy City, Minmetals Trust is obviously backward. After the withdrawal of Minmetals Trust, COFCO Jingxi Xiangyun Project immediately became one of the main income sources of Joy City. According to the 20 19 annual report, Jingxi Xiangyun became the second revenue project of Joy City with 42.4 1 100 million yuan.

In the previous three years, there was basically no income in the four seasons of Beijing Daoxiang. After COFCO Jingxi Xiangyun began to contribute revenue, Beijing Daoxiang Four Seasons quickly became one of the profit sources of Joy City. Joy City bought the shares held by Minmetals Trust in June 20 19, thus holding 99.82% of the shares of Beijing Daoxiang Siji. In the second half of the acquisition, Beijing Daoxiang achieved a revenue of 424,543.8+billion yuan in the four seasons.

In 20 19, Joy City's net profit was 3.705 billion yuan, and Beijing Daoxiang contributed more than 15% of the company's profits in four and a half years.

20 19 annual report shows that the total investment of Beijing Jingxi Xiangyun is close to 7.3 billion yuan, which means that the income of 4.2 billion yuan is not all the income of Jingxi Xiangyun. The completed project is expected to continue to contribute a lot of profits to Joy City in 2020.

Minmetals Trust has held shares for more than two and a half years. Beijing Daoxiang's income in the four seasons is basically zero, and its profits are huge. The trust has just withdrawn from holding shares, and the income and profits of the project company have flooded into Joy City.

Minmetals Trust, which withdrew early, seems to have gained a premium return of more than 30%, but this may not be all. Official website of Minmetals Trust shows that when the company invested in Beijing Daoxiang Four Seasons, it initiated the establishment of "Minmetals Trust COFCO Beijing 1 Equity Investment Collective Fund Trust Plan", which raised 855 million yuan to invest in Beijing Daoxiang Four Seasons with no more than 50% equity.

20 17 In the first half of the year, Minmetals Trust successively issued the second, third and fourth phases of COFCO Beijing 1 equity investment collective fund trust plan, raising 500 million yuan,1400,000 yuan and1200,000 yuan respectively. How to reflect the total amount of funds raised?

Compared with Minmetals Trust, the cooperation between Allianz Huijin and Joy City is by no means accidental. This little-known private equity fund established several project companies with Joy City, holding shares for a long time, and then gradually withdrew from the project. During the development period, the project company is jointly held by Joy City, trust, private equity and other partners. At the end of the construction, Joy City bought shares from its partners and kept the profits it was about to get in its own hands.

20 19 Suzhou Industrial Park Yuejin Real Estate Co., Ltd. (hereinafter referred to as "Suzhou Yuejin") was included in the subsidiary system of Joy City just like Beijing Daoxiang Four Seasons. 20 19 In May, Joy City acquired 50% shares of Shenzhen Wenying Yuanxin Investment Partnership (Limited Partnership) for1590,000 yuan, and Suzhou Yuejin became a subsidiary of the company 100%.

Although the total amount is not large, Suzhou Yuejin contributed 61170,000 yuan in net profit to Joy City in 20 19. In 20 17 and 20 18, the investment income contributed by Suzhou Yuejin under long-term equity investment was a loss.

According to the survey, from 20 17 to 12, Shenzhen Wenying Yuanxin acquired 50% equity of Suzhou Yuejin with a capital contribution of1500,000 yuan. That is to say, after holding shares for about a year and a half, this private equity company got back the income of 8.75 million yuan, with a yield of only 5.83% and an annualized rate of return of less than 4%, even worse than a one-year wealth management product with excellent income.

99% of the investors of Shenwen Yingyuanxin are Allianz Huijin, and the shareholders of this private equity fund are two natural persons, Gao Ying and Gu, holding 50% of the shares and each contributing 25 million yuan.

Back in March of 20 17, COFCO Real Estate announced that it had established Suzhou Yuejin and Hangzhou Liang Yue Real Estate Co., Ltd. with Shenzhen Wenying Yuanxin and Shenzhen Chuangfu Huiheng Investment Partnership (Limited Partnership), and 99% of the investors behind the two partners were Allianz Huijin.

COFCO Xiangyun Real Estate (Suzhou) Co., Ltd. is now renamed Joy City Holding Group Sunan Co., Ltd., originally holding 565,438+0% equity of Joy City, and the remaining 49% equity is in Shenzhen Huijin No.2 Investment Partnership (Limited Partnership) (hereinafter referred to as "Huijin No.2").

At the end of 2065438+2005, two shareholders established this project company, which is mainly responsible for developing Suzhou Xiangyun International Project. According to the semi-annual report of Joy City 20 19, Joy City signed an equity transfer agreement with Huijin No.2 on June 20 19, and the company acquired 49% equity held by Huijin No.2 for 576 million yuan, thus holding 0/00% equity of the project company.

Joy City Annual Report shows that in 20 18, Suzhou COFCO Xiangyun International just confirmed its income of13.88 million yuan, and its partner Huijin No.2 withdrew at the beginning of 20 19. This year, the project continues to contribute15.96 million yuan to Joy City, but all this has nothing to do with Huijin 2. ..

Allianz Huijin still appears in the No.2 shareholder list of Huijin, similar to Chongqing Kazuki Watanabe musician Jinhe Industrial Co., Ltd. In 20 19, Joy City acquired the remaining 50% of the company's equity, and the equity changed from 50% to 100%. The purchase cost announced in the annual report is 1.49 billion yuan, and the withdrawing shareholder is Shenzhen Hui Yuan Investment Partnership (Limited Partnership). Chongqing Kazuki Watanabe musician Jinhe Industrial Co., Ltd. This project company was jointly established by the above two shareholders on August 20 17, and is mainly responsible for Chongqing Hongyun Project. After more than two years, the private equity fund withdrew at the end of June 20 1 19, and the project income had nothing to do with it.

The above four project companies are jointly funded by Joy City and Allianz Huijin. In addition to these old acquaintances, Allianz Huijin also has project companies that have cooperated with Joy City, such as Chengdu Ding Peng Real Estate Co., Ltd., Chengdu Yuanjin Yuerong Real Estate Co., Ltd., Chengdu Dayue Xichuan Real Estate Co., Ltd., Chengdu COFCO Yue Mei Real Estate Co., Ltd., Shenzhen Cheng Jinfeng Real Estate Development Co., Ltd. and Shenzhen Zhong Yi Changchang Investment Co., Ltd. ..

Allianz Huijin official website introduced that the company was established on 20 13, mainly engaged in comprehensive real estate financial services, asset management services for specific customers, private equity investment (PE) and other financial services. Among the company's real estate projects, Hangzhou Liangzhu Project, COFCO (Suzhou) Xiangyun Project and Chongqing Panlong New City Project all cooperate with COFCO.

For developers, land acquisition is as important as financing. Through the cooperation with real estate funds, real estate enterprises can increase the flexibility of the company's capital sources and social funds. The form of cooperation is mainly equity, which can reduce the leverage ratio of enterprises while increasing financing and maximize the company's interests.

However, these partners did not stick to the end. In the late stage of project construction or the middle stage of project completion, partners such as trust and private placement withdraw in advance, leaving all or part of the net profit of project settlement to listed companies, and partners make profits through equity premium and dividends.

This seems to be equity, but in fact, the cooperation that listed companies undertake repurchase or other means to make partners withdraw early is more like a creditor's right.

Essence Securities pointed out that the essence of cooperative development is to transform debt financing at the project level into equity financing, which is often accompanied by the emergence of clear shares and real debts. This kind of financing usually operates in the form of establishing subsidiaries or joint ventures between real estate enterprises and investors. Financing exists in the form of equity, which reduces financial leverage by hiding liabilities and increasing equity. Partners get fixed income in the form of repurchase, third-party acquisition and regular dividends.

In order to maintain equity cooperation with partners, Joy City sometimes even needs to provide financial support for the other party, so that the other party can realize the same proportion of capital increase. In fact, the ultimate investor is Joy City. So, is this kind of equity cooperation still a real equity cooperation?

Financial assistance is not a weakness.

Allianz Huijin can cooperate with many project companies established in Joy City, relying on several private equity products that the company can issue. Even so, Allianz Huijin still can't meet all the capital needs. Under such circumstances, Joy City began to "subsidize" each other to stabilize the cooperative relationship.

At the end of April 2020, Joy City announced the proposal of 20 19 shareholders' meeting. In addition to the annual report, dividends and other conventional proposals, the proposal to provide financial assistance to the outside world occupies the most space. Joy City and its holding subsidiaries plan to provide 32 financial assistance to the outside world, with a total amount of 29.8438 billion yuan.

Joy City's financial support targets are all joint ventures or joint ventures between the Company and other minority shareholders of its holding subsidiaries. Among them, there are 65,438+05 other minority shareholders of holding subsidiaries, and it is estimated that these 65,438+05 other minority shareholders of holding subsidiaries will receive 5.26 billion yuan in financial assistance.

As a joint venture or joint venture, Joy City is understandable to provide financial support according to the proportion of capital contribution due to business needs, but the reason for further expanding the funding target to at least a few shareholders is somewhat far-fetched. Some minority shareholders introduced by Joy City not only provided funds to the project company, but also received reverse financial support from listed companies, so the low-cost funds of central enterprises flowed out of the body.

Among the minority shareholders who are expected to receive financial assistance, Shenzhen Huijin 1 Investment Partnership (Limited Partnership) (hereinafter referred to as "Huijin 1") received financial assistance of 800 million yuan, which is a relatively large sum. Huijin No.1 holds 49% equity of Shenzhen Cheng Jinfeng Real Estate Development Co., Ltd. (hereinafter referred to as "Cheng Jinfeng").

After the former major investor Huitianfu Capital Management Co., Ltd. withdrew, Allianz Huijin was 95.24% shareholder of Huijin 1.

According to the fund-raising announcement, the general partner (GP) of Huijin 1 is Allianz Huijin, and the limited partner (LP) is to raise funds from specific targets. Not surprisingly, the same is true of the project companies that Allianz Huijin cooperates with Joy City through various private equity funds. As a general partner, Allianz Huijin raised funds from limited partners to participate in the development of Joy City real estate projects.

Prior to this, in 20 18, in addition to the financial support of 800 million yuan from Allianz Huijin, another private equity fund established by Allianz Huijin-Shenzhen Hui Yuan Investment Partnership (Limited Partnership) also received financial support of 200 million yuan.

Allianz Huijin has set up several private equity funds and cooperated with Joy City to develop its projects. At the same time, Joy City or its holding company will return some low-cost funds to the other party through financial assistance, so Allianz Huijin has more sufficient funds to further expand its business.

Providing financial assistance to the outside world has become a tradition of Joy City. According to the proposal of the shareholders' meeting in 20 18, Joy City and its holding subsidiaries plan to provide 36 financial assistance to the shareholding companies and minority shareholders of the holding subsidiaries, with a total amount of 34.695 billion yuan, compared with 34.32 billion yuan in 20 17.

Joy City's 20 19 annual report shows that the total interest expense accrued by the company and its subsidiaries due to related party borrowing is 482 million yuan, while the total interest income accrued by the company and its subsidiaries due to related party borrowing is1365 million yuan.

Joy City can certainly get interest returns by providing funds to related parties, but the company's main income still depends on the sales of real estate development projects.

In order to achieve the contracted sales target of 1000 billion yuan, Joy City increased its land acquisition, but under the influence of the epidemic, the company's sales fell sharply. Moreover, the inventory of Joy City is not ideal. By the end of 20 19, the backlog of developed products exceeded1400 million yuan.

overstocked products

Due to the sudden epidemic, the sales of real estate enterprises have been affected. According to the data released by the National Bureau of Statistics, in the first half of 2020, the national commercial housing sales area was 694.04 million square meters, down 8.4% year-on-year; The sales of commercial housing reached 6,689.5 billion yuan, down 5.4%.

Among them, residential sales decreased by 2.8%, office sales decreased by 28%, and commercial sales decreased by 25.5%. Joy City, which insists on "commercial and residential development", is more affected.

In the first half of 2020, the performance fell sharply. The reason given by Joy City is that the revenue of shopping centers and hotels decreased year-on-year, while the settlement income of development business decreased in the first half of the year, and the company's performance fell sharply.

In this regard, CITIC Securities pointed out that the main source of Joy City's performance in the whole year is the settlement of development projects, and the profit contributed by shopping centers is less than 25%; In addition, due to the impact of non-recurring gains and losses and the pace of settlement, the company's performance base in the first half of 20 19 was relatively high, resulting in a sharp decline in the current period.

In addition to the sharp decline in the profit of the report, the contracted sales of Joy City also fell sharply.

According to Kerui data, in the first half of 2020, Joy City achieved contract revenue of 3165438+300 million yuan, and the company's sales in the same period last year was 36.03 billion yuan, that is, the company's contract sales in the first half of the year decreased by15.74%. In the first half of the year, the sales performance of the top 100 real estate enterprises decreased by 2.7% year-on-year, and Joy City lagged far behind the average level of the top 100 real estate enterprises.

If it is further extended to the company's equity sale, the decline of Joy City will further increase. Ke Rui shows that in the first half of 20 19, Joy City's equity sales amounted to 23.48 billion yuan, and in the first half of 2020, it dropped to161900,000 yuan, with a sharp drop of 3 1.05% compared with the same period of last year, with a drop of more than 30%.

In 20 19, after the reorganization of Joy City was completed, the management of the company shouted the sales target of three years 1000 billion, that is, 20.21year, and the company's goal was to sign up for sales exceeding 1000 billion.

In 20 19, Joy City achieved contract sales of 7108.2 billion yuan. Without the impact of the epidemic, it seems not difficult for the company to achieve this goal. However, after the impact of the epidemic, whether the company can achieve positive growth in 2020 has to be questioned, which means that the tasks left for the last year suddenly increased.

In order to achieve a breakthrough in scale, the reorganized Joy City has increased its land acquisition. In 20 19, the company added a total construction area of about 5 million square meters, the total land price was 27.622 billion yuan, and the equity price of Joy City was1481200 million yuan, accounting for just over half of the company's equity.

In the first half of 2020, Joy City not only did not slow down, but continued to exert its strength. According to the company's announcement, the total construction area of new projects in Joy City in the first half of the year totaled 2,734,800 square meters, a substantial increase of 165% compared with the same period of last year.

Accelerating land acquisition is accompanied by a slowdown in sales, which means that the company's deposited funds are gradually increasing. Not only that, in the inventory, the products developed by Joy City are very prominent.

At the end of 20 19, the developed products in Joy City's inventory were1401900 million yuan, almost the same as 14438+06 billion yuan at the beginning of the year. Products developed by real estate enterprises generally refer to completed real estate projects. Although the amount of products developed by Vanke reached 66.034 billion yuan, the company sold 630.84 billion yuan in the same period, accounting for only about 10% of the developed products.

Joy City's contracted sales in 20 19 just exceeded 70 billion, which means that the proportion of developed products is close to 20%. When sales are cold, land acquisition will continue to be accelerated, and the backlog of finished products will be cleared, which means that the capital operation efficiency of Joy City will be negatively affected.

Joy City bond rating agencies pointed out that at the end of 20 19, the company's interest-bearing debt increased to 69 1.4 1 billion yuan, and at the end of March 2020, the interest-bearing debt further increased to 79 1.37 billion yuan, and the net debt ratio rose to1.05. The overall debt management level of the company is still high, and it will face certain debt repayment pressure in the future.