The hidden risk of non-main business guarantee for Wantong Real Estate Fund

The real estate enterprise often "harvest year", the result is high suddenly low. The reason is that the company's performance will be released in a certain year, the second is to encounter macro-control, corporate performance landslide.　　Therefore, how to "hot" profitability, to circumvent the industry cycle, or even to maintain the stability of stock prices, has become a lot of housing enterprises have to face the problem. To solve this problem, many enterprises have increased the investment of commercial real estate, but commercial real estate investment cycle is long and slow, so many housing enterprises to do the investment, in the current capital market financing is hopeless, through the affiliated companies to obtain a large number of "guarantee" bank loans, the funds raised by investment or occupation of the way flow.　　Fine Chavanton Real Estate (600246.SH, hereinafter referred to as "Wantong") three years of financial statements, and its action in this area is quite a lot.　　It is worth worrying that wantong investment activities in the capital flow is quite abnormal, the funds raised to a large number of non main business, once the main line of hematopoietic capacity weakened, profitability decline, the huge financial risk will be brewing. To raise funds to abnormal cash inflow and outflow of enterprises reflected in accounting statements, there are three main channels: "Business activities", "investment activities" and "fund-raising activities." In table 1, we can see that Wantong's net cash inflow is dependent on "fund-raising activities" in addition to "business activities". In other words, the money comes from the normal business activities, the important channel is investors and creditors.　　And Wantong's "investment activities" only provide a weak net cash inflow. In turn, the net cash inflow is at risk when the cash received by Wantong through "fund-raising activities" is reduced. 2010-Year report, Wantong real Estate "fund-raising activities" net cash inflow is 60% lower than the previous year (2009 is 2.5 billion, 2010 year is 1 billion), "net increase in cash and cash equivalents" is also reduced by 72% (2009 is 1.15 billion, 2010 year is 320 million)　　, in 2008, the total net cash inflow of fund-raising activities dropped to $557 million, while the net increase in cash and cash equivalents in the same period was a net outflow of 1.197 billion per cent, compared with an inflow of 1.523 billion in the previous year. So, through the above "fund-raising activities" to obtain funds is really used to support the main real estate business? Then why Wantong's main business scale for three years and has been wandering not before?　　Where does the cash from its fund-raising activities flow? On the surface, to raise funds for "investment activities" very little, basically into production and business activities, but the cash outflow of investment activities is very unusual, for example, in 2007, investment activities Cash inflow of 30 million, outflow is 1.118 billion yuan. 2009 inflow of 78 million, outflow of 497 million yuan. In the 2010-year report, there was an anomaly showing an inflow of 17 million and an outflow of 8.5 million. According to conventional considerations, the return of investment activities have a certain period of time, but through the three-year earnings analysis can be found that wantong investment activities outflow anomalies, the fund-raising may be to a very important place to invest liveMove, become a reservoir of profit. We have obtained initial verification from the "net operating income/profit Total", which was 8.88% in 2008, 2009 per 20.21%, and up to 61.44% in the 2010-year period, which rose by nearly 8 times times from 2008.　　Correspondingly, the proportion of net income from operating activities to total profits fell from 92.54% in 2008 to 63.94% in 2009 to 45.57% in the middle of 2010 (see table 2). The hidden risk of non-main business guarantee and active "financing activity" correspond to, the Wantong guarantee amount is rapid growth in nearly three years, its guarantee value increases 3 times times, to 1.2 billion yuan.　　Among them, in 2010, the amount of the guarantee amounted to 1.2 billion, the amount of the guarantee for the holding subsidiaries was only 300 million, and the amount of the guarantee amounted to 46% of the net assets from 2007 to 15% in 2010 (see table 3). The increase of the associated guarantee amount brings a rich cash inflow to Wantong and its affiliated parties.　　But for a listed company, a loan will boost the company's performance only if the company's return exceeds the interest it pays for the loan. Unfortunately, the Wantong net asset yield and total assets net profit margin both from 2008 to 2010 Annual report showed both downward trend. The return on capital also fell, only the main business sales net interest rate, sales gross profit margin and sales cost rate showed a stable state, which will benefit from the real estate industry for many years bull market (see table 2).　　If the real estate industry is deeply adjusted, the main business is bound to deteriorate, the guarantee will have a ripple effect.　　For many loan banks, there is also a bad news: the beginning of the new round of macro-control in April this year to change the previous mild way, and continue to deepen, the industry analysis of the real estate regulation will not be loose, which led to the real estate listed company's net assets total began to shrink. In fact, Wantong real estate owner's rights and interests have been lingering, and do not say and Vanke a group of tens of billions of clubs than, Wantong itself has been around more than 3 billion. Wantong Total security Amount relative to net assets (adjusted) the proportion of a sharp increase, and net assets are not up.　　Therefore, for the loan banks, the security of recovery loans reduced, as a loan guarantee assets also face risks. The situation is getting worse as the regulations go deeper.　　If the "business activities" and "investment activities" are not enough to pay off the loan, it is necessary to rely on "fund-raising activities" repayment, means either to the public shareholders to circle money, or borrow new old, but the premise is to continue to expand financial risk, but the current stock market financing channels are close to closed There are insiders believe that wantong real estate amplification financial leverage at the same time, suspected large shareholders accounted for.　　In order to make it clear that the problem of capital occupancy, we have to introduce again a dull financial concept, that is "to pay other business activities related to cash," because this project in addition to reflect the costs of listed companies in cash expenditure, by major shareholders or other people occupy the funds are in it. Wantong This indicator has remained at a very high level, three years andA cumulative total of 2 billion yuan, but did not exceed the concurrent financing activities brought about by the total net cash inflow of 6.3 billion yuan (see table 4).　　It is clear from this indicator that the net cash inflows from fund-raising activities neither show any contribution to the main business nor be digested by "paying other cash related to operating activities".　　Further, if the difference between "payment of other cash related to operating activities" and "receipt of other cash related to operating activities" is mostly a cost, then the cost of cash expenditure will reach $1.98 billion, which is 1.34 times times the net profit (1.474 billion) of the period, and is clearly unlikely. It is impossible to tell how many of them are occupied by large shareholders, though only by immediate data. But from "investment losses" to see Anomaly, 2008 loss of 17 million, 2009, but 84 million, and the loss of 5 million this year, there may be many reasons to explain, but the real estate industry for three years sales prices have not actually come down, and "pay other business activities related to cash"　　It has been around 300 million, making it hard to convince investors. Security outside the main business has undoubtedly increased the number of risk-related parties, and the risk has multiplied.　　But Wantong money reserves relatively conservative, the current real estate market downward, the year once a large area price, the system risk is highlighted.　　The increase in the amount of guarantee, and the limited profitability growth, the main business scale growth is limited, surrounded by so many unlisted companies, and behind them is a large number of banks.　　There is no doubt that the risks mapped by this contrast will not be overlooked. Wantong Real Estate Guarantee continues to grow, and profitability growth is limited, the main business scale growth is limited, surrounded by a number of unlisted companies, and behind them is a large number of banks, hidden risks can not be overlooked.