12/02/2021 Financial News in China: Developer Kaisa’s Risk of Default Is Imminent, China Evergrande’s Shareholding in Evergrande Motor Drops to 63.84%

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1.China Index Academy:In November, The Price Of New Houses In 100 Cities Fell For The First Time In 21 Months, And The Short-Term Reversal Is Unlikely

China Index Academy released the price index of 100 cities on Wednesday, stating that the average price of newly-built residential buildings in 100 cities in November was 16,183 yuan/square meter, up 2.72% year-on-year, and the rate of increase narrowed; the month-on-month decrease was 0.04%, which was the highest since the outbreak in February last year. The first decline; 53 cities experienced a month-on-month decline, which was the first time it exceeded 50 since the most severe period of the epidemic. In terms of second-hand housing, the average price of second-hand housing in November was 16,013 yuan/sqm, up 3.66% year-on-year, and the increase rate narrowed by 0.38 percentage points from the previous month; The highest since the data was released in June 2020.

2.Bytedance Real Estate Business Changes, Its Xingfu Li Layoffs Employees of New House Sales

On the evening of November 30, Xingfu Li, a real estate trading platform owned by ByteDance, suddenly notified some Beijing new house sales employees of the layoffs and asked them to come to the company to negotiate compensation the next morning. Xingfu Li provides the laid-off employees with the opportunity to transfer jobs, and some employees are considering whether to stay. In the morning of the same day, Xingfu Li officially announced that it had invested in the well-known real estate brokerage company Ryetian Real Estate, holding 20% of its shares.

3.End Of 7 Consecutive Declines, Shenzhen’s Second-Hand Housing Transaction Volume Broke The Freezing Point Of 2,000 Sets

According to data from the Shenzhen Municipal Bureau of Housing and Urban-rural Development on December 2, Shenzhen’s second-hand housing transaction volume in November was 2,211 sets, an increase of 38% from the previous month. After breaking through the 2000 set threshold, Shenzhen’s second-hand housing transaction volume also ended its seven-month decline. Prior to this in October, Shenzhen’s second-hand housing transaction volume hit a record low in the same period in the past decade, only 1605. Since April this year, Shenzhen’s second-hand housing transaction volume has shown a continuous decline. The transaction volume in April was 4,877, the transaction volume in May was 3027, the transaction volume in June was 2,575, and it fell below the 2000 threshold in September. The monthly data dropped to the freezing point of 1605 sets.

Referring to the monthly data of second-hand residential transactions in Shenzhen, the transfer volume of 5,000 units is generally regarded as the line of prosperity and decline in the industry, and 2,000 units mean that the market has reached a freezing point.

4.Iqiyi Has Been Exposed To Large-Scale Layoffs, The Layoff Ratio Is Between 20%-40%

On the first day of December, news came out from multiple online communities and media from noon that iQiyi began a round of large-scale layoffs today, with a layoff ratio of 20%-40%, and some people say that if it is more than 50%, compensation for layoffs will be temporarily Press N+1 to issue. More news is that this is not the end of this round of layoffs, and many people will be laid off and left around the Spring Festival. As of press time, iQiyi has not received any response. The third quarter 2021 financial report released by iQiyi recently showed that the total revenue of iQiyi in the quarter reached 7.6 billion yuan, a year-on-year increase of 6%, and the net profit attributable to the parent was a loss of 1.7 billion yuan. An increase of 41.6% year-on-year, Iqiyi lost 6 billion yuan in 2020.

5.Real Estate Company Kaisa’s Bond Extension Proposal May Be Rejected, The Risk Of Default Is Imminent

According to analysts, the Chinese developer Kaisa Group is unlikely to obtain bondholders’ approval to extend the maturity of the $400 million bonds due next week, which has put more pressure on other debt counterparts. Kaisa proposed to postpone the maturity of bonds by 18 months, at a time when creditors are increasingly worried about the ability of Chinese real estate developers to meet their recent overseas repayment obligations. In recent days, there have been signs that Kaisa’s bond conversion proposal has been rejected.

6.Chinese Importers Take Advantage Of Falling Prices To Buy U.S. And Brazilian Soybeans

Analysts and an export trader said that Chinese importers bought a small amount of bulk soybean cargo on Wednesday, which will be shipped in December and January at the U.S. Gulf Coast and Brazilian ports, respectively. The quantity of soybeans purchased this time is about three to four shipments, with a maximum of about 240,000 tons. Prior to the sharp drop in soybean prices on Tuesday, the Chicago Board of Trade (CBOT) index soybean futures fell by about 2%.In the traditional U.S. soybean export season this fall, the quantity of Brazilian soybeans ordered by Chinese importers was higher than normal due to the high price of U.S. soybeans and the strong trend of the U.S. dollar.

7. The Central Parity Of RMB Against US Dollar Was Reported At 6.3719, Down by 26BP

On December 2, the central parity of RMB was reported at 6.3719, down by 26 points. The central parity of the previous trading day was reported at 6.3693, and onshore RMB closed at 6.3705 on the previous trading day. Approaching the high point of the year, the strong RMB exchange rate continues to be staged. Factors such as strong exports, strong demand for foreign exchange settlement, and strong attractiveness of RMB assets have resonated, pushing up the RMB and showing “exceeding expectations” resilience. With the gradual cooling of the activity of the exchange settlement, and the strengthening of the expected management by the central bank, the RMB exchange rate may see a valuation correction in the future.

Comment: As we all know there is a difference between Onshore and offshore RMB which shows us how the CCP government manipulates the exchange rate. So, the exchange doesn’t prove anything. It is an indisputable fact that the CCP has been over-issuing its currency.

8. China Evergrande’s Shareholding In Evergrande Motor Drops To 63.84%

On December 1, according to the Hong Kong Stock Exchange’s equity disclosure, Evergrande received a reduction of 900 million shares held by China Evergrande, with an over-the-counter average price of HK$3 per share. A total of 2.7 billion Hong Kong dollars is involved. It is reported that after this reduction, the proportion of China Evergrande fell from 72.89% to 63.84%, and the number of shares held was reduced from 7.248 billion shares to 6.348 billion shares. So far, Evergrande has fallen 4.08% to HK$3.53, with a total market value of HK$35.1 billion.

【G Translators- Financial Team】
Author: Andrew

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

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