Vanke's market value returns to over one trillion yuan

Author | Cao Anxun

Editor | Zhou Zhiyu

The introduction of "epic-level" market rescue policies has triggered a surge in real estate stocks. Vanke A has also benefited from this, with its market value returning to over one trillion after more than a month.

On May 17th, Vanke A hit the daily limit up, with a stock price reaching 9 yuan/share and a market value of 107.376 billion yuan. Vanke Enterprises also rose by 19.37%, leading the Hong Kong property stocks.

A series of favorable policies have boosted investors' confidence in Vanke, with recent actions in financing and asset disposal. Its comprehensive "slimming and strengthening" plan has achieved some phased results.

On May 16th, Vanke successfully issued a CMBS on the Shenzhen Stock Exchange, with an issuance size of 1.435 billion yuan, a AAA rating for the senior tranche, a senior tranche coupon rate of 3.6%, and a term not exceeding 18 years.

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

At the same time, due to the high threshold for CMBS issuance, this move also indicates that Vanke still has good credit, targeted properties, and smooth financing channels in the market.

In the past two months, Vanke has obtained multiple financings totaling approximately 13 billion yuan. Just on May 13th, Vanke A announced that it had applied for a total of 7.339 billion yuan in loans from Bank of China, Agricultural Bank of China, and Bank of Beijing, with its holding subsidiaries providing mortgage guarantees.

Vanke stated that the holding subsidiaries providing guarantees for the above financing is an active exploration of Vanke in the new financing model, which helps support the company's business development.

Previously, Vanke President Zhu Jiusheng mentioned in a financial report meeting that in the past, financing with banks was a one-to-one model, but now it needs to shift to project mortgage financing. Fortunately, banks have given Vanke a 1-3 year conversion period, while the real estate financing coordination mechanism and operating property loans have expanded Vanke's sources of funds.

The landing of a hundred billion yuan financing indicates that Vanke's financing model is accelerating its transformation, showing the market Vanke's action and willingness to give "real money" recognition. Since the low point on April 25th, Vanke A has accumulated an increase of about 37% to date.

In terms of bonds, Vanke's domestic bonds have risen for several consecutive days, with the "22 Vanke 07" rising by over 20% on May 15th, triggering a temporary halt. By May 17th, most of Vanke's domestic bonds had risen; several US dollar bonds also surged, with the Vanke 2027 maturing dollar bond on May 16th achieving the largest increase since November last year.

As planned at the 2023 shareholders' meeting, in addition to advancing the transformation of the financing model, Vanke is also resolutely slimming down and accelerating bulk asset transactions.

On May 8th, the Shenzhen Public Resources Trading Center showed that Vanke had listed the land use rights of the T208-0053 plot of the Shenzhen Bay Super Headquarters Base acquired in 2017 for transfer, with a starting price of 2.235 billion Vanke explained that the listing and transfer this time is one of the concrete measures to vigorously promote the comprehensive plan of streamlining and strengthening, aiming to reduce the occupation of funds by non-core assets and focus on doing well and strengthening the three major core businesses.

Standard & Poor's credit rating also expressed confidence and expectations for Vanke at a recent seminar, stating that thanks to the potential financing space of a large number of operating properties and stable rental income, Vanke has sufficient financial capacity to deal with bonds due in 2024. It is predicted that when the industry fully adjusts and stabilizes again, Vanke and other fundamentally high-quality real estate companies will still be the most competitive and credit-resilient enterprises in the industry.

Now, with the policy spring breeze blowing, Vanke is expected to, under the assistance of policies and its own efforts, coordinate well the reduction of debt and high-quality development as expected by Chairman Yu Liang, allowing the company to return to a sustainable track and continue to lead in the new stage of real estate development