11/13/2021 Financial News In China: CCP Suppresses Coal Prices To Fall; Tencent Responds To Open Discussions With Douyin

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1.CCP Suppresses Coal Prices To Fall

According to several market participants, Chinese coal traders are selling at a loss or trying to delay imports after the Chinese government’s intervention in the market caused coal prices to plummet by 50%.  After the government ordered Big Mine to lower its prices to a set target and immediately increase production to curb the surge in coal prices, domestic thermal coal futures prices have been cut in the past three weeks.  The consequence of the Chinese government’s intervention is that the pace of imports in November and December may slow down after the slowdown in October.  Three Chinese coal traders said that with the price falling freely, importers tried to quickly sell the coal cargo they booked when the price was at a record high in October, with a loss of between 40 and 100 US dollars per ton. A trader of a Chinese company based in Singapore said that some buyers abandoned their contracts and lost deposits that accounted for about 10% of the value of the goods. This prompted some traders to raise the deposit requirements to half of the value of the goods this week.

2.Tencent Responds To Open Discussions With Douyin

ByteDance’s short video platform, Douyin, said on Friday that it had received an application from Tencent’s creation service platform and hoped to access the Douyin open platform.  Tencent later responded that the company is issuing test invitations to third-party platforms across the network to help creators promote good content in a convenient and compliant manner.  Tencent said that Tencent’s creation service platform (test operation) is planning to gradually open authorized and compliant copyrighted content and creation tools to creators, and creators can conduct secondary creations on the basis of legal compliance.  Earlier on Friday, Douyin stated in a press release on the official WeChat account that it had received an application from Tencent’s creation service platform.  According to Tencent, there are a large number of second-creation short videos with exclusive copyright works of popular film and television all over the network that can be sent to Douyin, supplementing the content ecology of Douyin.

3.Chinese Real Estate Developers’ Borrowing Costs Rise To A 10-year High

At a time when Chinese real estate companies urgently need cash to avoid debt defaults, the entire industry is facing the problem of excessive borrowing costs.  Chinese real estate developers’ borrowing costs rise to a 10-year high. The industry is struggling to cope with the slowdown in China’s real estate market.  This week, the junk bonds issued by riskier Chinese real estate developers suffered a round of selling, causing their borrowing costs to soar to their highest level in a decade and jeopardizing the company’s ability to obtain important sources of funding.  The volatility in the US dollar bond market issued by Chinese companies with speculative credit ratings coincided with the overdue payment of a series of bonds by large real estate developers such as Evergrande, Sinic, and Fantasia, triggering a continual increase in worries.

4.Yaxing Bus Sales Decline And Raise Nearly 340 Million

With continued sluggish sales, Yaxing Bus may enter the delisting list if it “is not paying attention”.  On the evening of November 10th, Yaxing Bus (600213.SH) released the production and sales data bulletin, showing that the company’s cumulative production in the first 10 months reached 1,396 units, a year-on-year decrease of 34.92%; cumulative sales reached 1,440 units, a year-on-year decrease of 32.24%.  Moreover, in 2020 and the first three quarters of 2021, Yaxing Bus’s net profit will be 158 million yuan and -97.8978 million yuan, respectively.  What needs attention is that the third quarterly report shows that Yaxing Bus’s total assets reached 3.055 billion yuan, and the total liabilities were 3.054 billion yuan. The difference between the two is only 1.46 million yuan, and the debt-to-asset ratio is as high as 99.95%, which is close to the point of insolvency.  According to the Shanghai Stock Exchange’s stock listing rules, Yaxing Bus is subject to delisting risk warnings and risks of delisting.

5.China Sunshine City Reached A Rollover Plan For Two US Dollar Bonds

After the approval of the domestic bond renewal plan last Wednesday, the USD debt restructuring of the Chinese real estate company Sunshine City Group made further progress.  According to a source familiar with the situation, Sunshine City’s previous USD bond exchange offer was supported by a majority of holders, and the two USD bond extension proposals were also approved, and the creditors agreed to extend it for one year.  The person also revealed that Sunshine City’s request for a cross-default exemption for US dollar bonds has also been approved. The other US dollar bond in the previous exchange offer that should be sold back in November is still being offered due to technical reasons. According to the trading rules, nor does it constitute a breach of contract. The two U.S. dollar debts approved for extension are: due on January 11, 2022, with an outstanding balance of 200 million U.S. dollars and a coupon rate of 5.3%; and due on March 18, 2022, with an outstanding balance of 300 million U.S. dollars and a coupon rate of 10.25 %.  

6.Beijing Consumer Loans Tightened

The tightening of consumer loan review in Beijing has become the norm.  Recently, a reporter from the Beijing Commercial Daily learned from a number of personal loan managers and bankers in the Beijing area that some banks in the Beijing area have temporarily suspended their consumer loan business. The tightening of consumer loan reviews in Beijing has become the norm.  Recently, a reporter from the Beijing Commercial Daily learned from a number of personal loan managers and bankers in the Beijing area that some banks in the Beijing area have temporarily suspended their consumer loan business. According to a relevant person in charge of a joint-stock bank in Beijing, “Our bank’s current personal consumption loan loan threshold has not changed, but starting from the third quarter of this year, the personal consumption loan line applied by our branch has been reduced from 300,000 yuan to 200,000 yuan”.

7.Beijing Stock Exchange Will Open On November 15

On November 12, 2021, the Beijing Stock Exchange issued 6 business rules including the “Detailed Rules for the Implementation of Securities Transactions for Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional Investors of the Beijing Stock Exchange”, which will come into effect on November 15, 2021.  The above rules, together with the 45 business rules issued in the previous period, cover issuance and listing, financing mergers and acquisitions, company supervision, securities trading, membership management, and investor suitability. As of November 12, a total of more than 2.1 million investors have made appointments to open CBEX qualified investor rights. After the market opens, the total number of investors who can participate in CBEX transactions exceeds 4 million.  A total of 112 securities companies obtained membership qualifications and became full members of the Beijing Stock Exchange. 10 companies that have completed public offerings and other procedures will be listed directly on the Beijing Stock Exchange, and the relevant procedures for 71 stock selection companies to be listed on the Beijing Stock Exchange have been completed. By then, 81 companies will become the first batch of listings on the Beijing Stock Exchange company.

8.Ningbo’s Second Round Of Centralized Land Supply Announced The End

A few days ago, Ningbo’s second round of centralized land supply announced the end.  The scale of the land supply this time has been significantly increased compared to the first round, but surprisingly, in the overall cooling environment of the market, among the 46 land parcels for sale, in addition to 25 land parcels, 18 were sold at the reserve price.  In the land auction, the average floor price fell 43% compared with the first round of land supply, only 6715 yuan/square meter.  Shows a trend of “both volume and price falling”.  The Crane Real Estate Research Center believes that in addition to the continued pressure on the capital flow of real estate companies to cause investment tightening, the sales price limit is also an important reason for the weak investment willingness of companies. In the second round of centralized land supply, 46 homes were launched, and only 28 were sold, one less than the first round; the total transaction area was 2.609 million square meters, down 14% from the first round; the total transaction amount was 17.52 billion yuan, and  Compared with the first round, it shrank significantly by 51%; the average floor price dropped by 43% to only 6715 yuan/square meter.

By【G-translators Financial Team】
Author: 雪梨

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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