Author | Anjou Cao

Editor | Zhou Zhiyu

The introduction of an “epic” bailout policy set off a wave of rising and falling real estate stocks. Vanke A also benefited from this. After a lapse of more than a month, the market value returned to 100 billion dollars.

On May 17, Vanke A rose and stopped at the end of the session. The stock price reached 9 yuan/share, and the market value reached 107.376 billion yuan. Vanke, on the other hand, rose 19.37%, leading the rise in Hong Kong domestic housing stocks.

A series of favorable policies have stimulated a recovery in investors' confidence in Vanke. Behind this, Vanke has recently made quite a few moves in terms of financing and asset disposal, and its “slimming and fitness” package has achieved some phased results.

On May 16, Vanke successfully issued a CMBS on the Shenzhen Stock Exchange, with a distribution scale of 1,435 billion yuan, priority AAA rating, priority coupon interest rate of 3.6%, and a period of no more than 18 years.

Industry insiders believe that the successful launch of CMBS will help Vanke broaden medium- to long-term financing channels and further reduce financing costs.

At the same time, due to the high issuance threshold of CMBS, this move also shows that Vanke still has good credit, target properties, and unobstructed financing channels in the market.

In the last two months, Vanke has received multiple loans totaling about 13 billion yuan. On May 13, Vanke A announced that it had applied for loans totaling 7.339 billion yuan from the Bank of China, Agricultural Bank, and Bank of Beijing to provide collateral guarantees to its holding subsidiaries.

Vanke said that the holding subsidiary providing guarantees for the above financing is Vanke's active exploration under the new financing model and helps support the company's business development.

Earlier, Vanke CEO Zhu Jiusheng explained in the earnings conference that in the past, the bank was always the overall financing model, but now it is necessary to switch to a project mortgage financing model, but the good news is that the bank has given Vanke a conversion period of 1-3 years. At the same time, the real estate financing coordination mechanism and operating property loans have broadened the funding sources for Vanke.

The implementation of 10 billion yuan financing shows the accelerated transformation of Vanke's financing model. It also allowed the capital market to see Vanke's ability to act and be willing to give “real money” recognition. Since the low on April 25, Vanke A has accumulated a cumulative increase of about 37%.

In terms of bonds, Vanke's domestic bonds have surged over the past few days. Among them, “220,000 Ke 07” rose more than 20% on May 15, triggering a standstill. By May 17, most of Vanke's domestic bonds had risen; many of Vanke's US dollar bonds also rose strongly. Among them, on May 16, Vanke's US dollar bonds maturing 2027 recorded the biggest increase since November last year.

As planned by Vanke at the 2023 Annual General Meeting of Shareholders, in addition to promoting the transformation of the financing model, Vanke is also firmly slimming down and speeding up bulk asset transactions.

On May 8, the Shenzhen Public Resources Exchange Center revealed that Vanke listed and transferred the right to use the T208-0053 parcel of the Shenzhen Bay Super Headquarters, which was filmed in 2017, with a starting price of 2,235 billion yuan.

Vanke explained that this listing transfer is one of Vanke's initiatives to resolutely promote a slimming and fitness package. The purpose is to reduce the use of capital by non-main business assets and focus on improving resources and strengthening the three main businesses.

S&P Credit Ratings also expressed its confidence and expectations for Vanke in a recent seminar, saying that thanks to the potential financing space and stable rental income of a large number of operating properties, Vanke has sufficient financial space to handle bonds due in 2024, and predicts that when the industry is fully adjusted and stabilized again, housing enterprises with high-quality fundamentals such as Vanke will still be some of the most competitive and creditworthy enterprises in the industry.

Now, the spring breeze of policy is here. In the future, with policy support and its own efforts, Vanke hopes to coordinate debt reduction and high-quality development, as expected by Chairman Yu Liang of the Board of Directors, so that the company can return to a sustainable path and continue to lead the way in the new stage of real estate development.