7/29/2021 Financial News: Fitch Downgrades Evergrande Group To “CCC+”;Floods In Henan Caused More Than 1.6 Million Acres Of Crop Failure

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1.Fitch Downgrades Evergrande Group and Subsidiaries Evergrande Real Estate and Tianji Holdings to “CCC+”

Fitch Ratings has downgraded the long-term foreign-currency issuer default ratings of Chinese real estate company China Evergrande Group and its subsidiaries Evergrande Real Estate Group Limited (Evergrande Real Estate) and Tianji Holdings Limited (Tianji Holdings) to “CCC+” from “B..” “Fitch also downgraded the senior unsecured ratings of Evergrande and GAHL, and the senior unsecured notes guaranteed by GAHL and issued by Scenery Journey Limited from “B-” to “CCC.” The recovery rate rating is “RR5”.The downgrade reflects Evergrande’s shrinking margin of safety in maintaining liquidity. Evergrande has fragile liquidity, relying heavily on short-term bank loans and trust loan renewals, continued use of accounts payable, and large contract sales to generate cash flow.

2.In Henan, the Affected Area of More than 14 Million Mu, More than 1.6 Million Mu of Crop Failure

According to preliminary statistics, since July 16, as of 12:00 on the 26th, 972.1 thousand hectares (14,581,500 mu) of crops were affected, 419.9 thousand hectares (6,298,500 mu) of the disaster area, 108.9 thousand hectares (1,633,500 mu) of crop failure. The disaster is currently under further verification and assessment statistics. The short-lived field water on the crop growth and development of little impact, waterlogged for a long time in low-lying areas and flooding areas of crop growth will be seriously affected or even crop failure. Guangshan County Shuquan agricultural wholesale department Cheng Shuquan said that the recent heavy rainfall weather led to the warehouse more than 30 tons of fertilizer flooded. Taikang County, Qingji Supply and Marketing Society, the seventeenth comprehensive store Zhang Weidong said that the store agricultural part of the fertilizer was flooded. In addition to the local farmers of corn, watermelon also suffered. In addition, it is understood that Henan Gongyi, Xinxiang Weihui, Anyang Neihuang, Hebi Jun County, and other places were seriously affected; the village farmland was flooded more.

3.Corn Prices May Skyrocket

In Shandong, corn prices rebounded at an accelerated rate. Most enterprises returned to 2700 yuan, and Hebei Shandong and many other places traders reflect that the current food to more, the price of a day up three or four points are very normal! And a few days ago has been singing short corn to continue to fall analysts, the wind vane shifted and began to bullish corn prices, 3000 yuan/ton may be the bottom of the new North China, especially with the northeast region “self-help” action to open, traders offer a higher than one. In the new grain before the market, the corn market surplus is not enough. However, the downstream starch sales are not good, from the double holiday is left about a month, enterprises quickly raise prices is also to stimulate the rise in starch prices, yesterday there are gossip claims, starting next Monday, enterprises to join forces to promote the rise in starch prices.

4.Hua’ao Trust Was Fined ¥5.66 Million

Ltd. was fined 5.66 million yuan for nine violations of the law, according to the administrative penalty information disclosed on the website of the CBIRC on 28th. Specifically, in July 2017, the company illegally promised trust principal and income; from March 2017 to December 2018, the company carried out some connected transactions without reporting them to the regulator in advance; in 2018 and 2019, the company did not fully provide for impairment; from January to June 2020, the company seriously violated prudent operation rules in risk control and follow-up management of some trust plans; and in March 2020, the company seriously violated prudent operation rules in a real estate trust business. In addition, in March 2020, a REIT business of the company seriously violated prudent operating rules. In July 2018, the company issued a tiered trust plan and provided illegal capital guarantees and income protection arrangements to subscribers of the preferred share. In July 2019, the company had fees for loans. In August 2019, the company illegally introduced non-financial institutions to promote a trust plan. In March 2015 Since March 2015, the company failed to maintain the management of a trust plan file properly.

5.Four Insurance Companies’ Main Ratings Downgraded

United Credit Rating recently issued a report, determining to downgrade the long-term credit rating of Zhujiang Life to AA-, and to downgrade the credit ratings of “19 Zhujiang Life 01”, “19 Zhujiang Life 02”, “19 Zhujiang Life 03” and “20 Zhujiang Life 01” to A+. The credit rating of “19 Pearl River Life 01”, “19 Pearl River Life 02”, “19 Pearl River Life 03”, and “20 Pearl River Life 01” was downgraded to A+ with a stable outlook. UniCredit also downgraded the main long-term credit rating of Happiness Life to AA and downgraded the bond credit rating of “18 Happiness Life” to AA-. CDFH downgraded the main credit rating of Centennial Life to A. CDFH downgraded the main credit rating of Centennial Life to A. CDFH rated the main credit rating of Changan Liability Insurance as BBB+ and placed it on the credit watch list. The reasons are mainly the following: weakening policy quality; declining investment asset scale, fair investment yield, but the overall loss level has increased compared to 2019, and the overall resource allocation ability is general; poor financial flexibility and general performance of the overall debt policy; no obvious credit enhancement effect of external support.

6.Communist China Launches Special Rectification of Paid Tuition in Primary and Secondary Schools

Communist China is cracking down on the out-of-school training industry while launching special rectification for paid tuition in primary and secondary schools. The Ministry of Education recently decided to launch a nine-month special rectification campaign for primary and secondary schools and teachers nationwide from July this year to March next year, targeting the issue of paid tuition and illegal acceptance of gifts and money. This is a further extension of the previous crackdown on the out-of-school training industry and aims to reduce the increasingly heavy educational burden the general public faces in the face of severe “in-rolling” difficulties. The press release from the Ministry of Education states that teachers “do not speak in class,” “organize and run off-campus training courses,” and “engage in benefit exchange with parents” and other behaviors to take a “zero tolerance” attitude. In addition, the Ministry of Education’s press release states that it will adopt a “zero tolerance” attitude towards teachers’ “failure to teach in class,” “organizing off-campus training courses,” and “exchanging benefits with parents,” and will further increase enforcement and punishment for related violations during the special rectification period.

Comment: Without increasing the number of quality universities and the opportunities for students to attend them, such problems cannot be solved at the root.

7.Zhuhai China Resources Bank Shenzhen Branch Fined 1.2 Million Yuan Due to Misappropriation of Credit Funds

The administrative penalty decision issued by Shenzhen Banking and Insurance Regulatory Bureau shows that the main illegal facts of Zhuhai China Resources Bank Shenzhen Branch’s deposit and loan triple check was not strict and credit funds were misappropriated, and according to Article 46 of the Banking Supervision and Administration Law of the People’s Republic of China, Shenzhen Banking and Insurance Regulatory Bureau fined the bank 1.2 million yuan. The official website shows that Zhuhai China Resources Bank, established in December 1996, is a first-class legal person qualification of the city commercial bank. January 2010, China Resources Co., Ltd. and the Zhuhai Municipal Government successfully implemented Zhuhai Commercial Bank’s strategic restructuring, now the registered capital of 6.043 billion yuan.

8.Henan Banking and Insurance Regulatory Bureau: The Province’s Banking Industry Has Prepared 118.58 Billion Yuan of Special Funds for Flood Relief Has Been Issued 26.505 Billion Yuan

The Henan Bureau of Banking and Insurance Supervision resolutely implemented the deployment requirements of the CBIRC and the provincial government to guide banking institutions to give full play to their resource advantages and accurately dispatch funds to ensure the financing needs of post-disaster agricultural production such as farmland dredging, facility repair, replanting, and replanting, to ensure that the affected enterprises, tiny and micro-enterprises, individual entrepreneurs and farmers to resume production funds, to ensure that housing repair, grain and vegetables, animal husbandry, meat and eggs, and other related enterprises in the field of people’s livelihood. The financing needs of enterprises in the field of people’s livelihood such as milk and poultry. As of 16:00 on July 27, the province’s banking industry has prepared 118.58 billion yuan of special funds for flood control and disaster relief and has issued 26.505 billion yuan.

Comments: On average, each person gets about 40 USD to cope with the financing needs of agricultural products such as dredging of farmland, repair of facilities, replanting and replanting after the disaster, to ensure that the affected enterprises, tiny and micro-enterprises, individual entrepreneurs and farmers, resume their production capital needs, and to ensure the financing needs of enterprises related to livelihood areas such as housing repair, food, and vegetables, animal husbandry, meat, eggs, milk, and poultry.

By【G Translators- Financial Team】
Author: Totoro

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