Vanke's Market Value Reclaims $100 Billion
"Epic" bailout policies have been introduced, sparking a surge in real estate stocks. Vanke A has also benefited from this, and after more than a month, its market value has returned to over 100 billion yuan.
On May 17th, Vanke A's stock price reached 9 yuan per share at the end of the trading day, with a market value of 107.376 billion yuan. Vanke Enterprises rose by 19.37%, leading the rise in Hong Kong-listed domestic real estate stocks.
A series of policy benefits have stimulated investors' confidence in Vanke, and behind this, Vanke has recently made many moves in financing and asset disposal, and its "slimming and fitness" package of plans has achieved some phased results.
On May 16th, Vanke successfully issued a CMBS on the Shenzhen Stock Exchange with an issuance scale of 1.435 billion yuan, a priority AAA rating, a priority coupon rate of 3.6%, and a term not exceeding 18 years.
Industry insiders believe that the successful issuance of CMBS will help Vanke expand its medium and long-term financing channels and further reduce financing costs.
At the same time, due to the high threshold for CMBS issuance, this move also indicates that Vanke still has good credit, target properties, and smooth financing channels in the market.
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In the past two months, Vanke has obtained several financings, totaling about 13 billion yuan. On May 13th, Vanke A announced that it applied for a total of 7.339 billion yuan in loans from the Bank of China, the Agricultural Bank of China, and the Bank of Beijing, with its holding subsidiaries providing mortgage guarantees.
Vanke stated that its holding subsidiaries provide guarantees for the above financing, which is Vanke's active exploration under the new financing model, and is conducive to supporting the company's business development.
Previously, Vanke President Zhu Jiusheng introduced at the financial report meeting that the past financing model with banks was a total-to-total model, and now it needs to shift to a project mortgage financing model. Fortunately, banks have given Vanke a 1-3 year transition period, and the real estate financing coordination mechanism and operational property loans have expanded the sources of funds for Vanke.
The landing of billions of yuan in financing indicates that Vanke's financing model is accelerating its transformation, and the capital market has seen Vanke's action and is willing to give "real money" recognition. Since the low point on April 25th, Vanke A has accumulated an increase of about 37%.In the bond market, Vanke's domestic bonds have seen a continuous surge, with "22 Vanke 07" increasing by over 20% on May 15th, triggering a temporary halt. By May 17th, most of Vanke's domestic bonds had risen; several of its US dollar-denominated bonds also showed strong gains, with Vanke's US dollar bonds maturing in 2027 recording the largest increase since November last year on May 16th.
As planned at Vanke's 2023 Annual Shareholders' Meeting, in addition to promoting the transformation of its financing model, Vanke is also firmly slimming down and accelerating the transaction of large assets.
On May 8th, the Shenzhen Public Resources Trading Center indicated that Vanke was transferring the land use rights of the T208-0053 plot in the Shenzhen Bay Super Headquarters Base, which it had won in 2017, with a starting price of 2.235 billion yuan.
Vanke explained that this transfer is one of the measures to firmly advance the implementation of a comprehensive plan for slimming down and strengthening the body, aiming to reduce the occupation of funds by non-core business assets and focus resources on doing well and strengthening the three main businesses.
S&P's credit rating also expressed confidence and expectations for Vanke in a recent seminar, stating that thanks to the potential financing space of a large amount of operational properties and stable rental income, Vanke has sufficient financial space to cope with the bonds maturing in 2024. It is predicted that when the industry fully adjusts and stabilizes again, Vanke and other real estate companies with good fundamentals will still be among the most competitive and credit-resilient companies in the industry.
Now, with the policy spring breeze coming, Vanke is expected to coordinate debt reduction and high-quality development as anticipated by the board chairman Yu Liang, bringing the company back onto a sustainable track and continuing to lead in the new stage of real estate development.