Positive Signal! LONGFOR GROUP Takes Action

On August 14th, there was news in the market that LONGFOR GROUP's expansion has allocated a total of 1.7 billion yuan to the 18 LONGFOR GROUP 04 bond repayment account. Currently, LONGFOR GROUP has repaid a total of 4.19 billion yuan in corporate bonds in July and 4.18 billion yuan in August. The remaining domestic corporate bonds due within the year are only 119 million yuan due in November.

In addition, LONGFOR GROUP recently obtained a 5-year, 3.1 billion Hong Kong dollar syndicated loan and plans to repay overseas debts in an orderly manner. It is reported that LONGFOR GROUP's 15.3 billion Hong Kong dollar syndicated loan due in January 2024 has already been repaid in advance by 7.2 billion Hong Kong dollars, and the plan is to repay the entire amount in advance within the year.

A source close to LONGFOR GROUP confirmed the above news to reporters.

Yan Yuejin, Research Director of E-House Research Institute, said that the early repayment of debt indicates that LONGFOR GROUP is proactive in debt repayment, which can bring at least three positive effects: it proves that the company's financial and cash situation is very good, such operations can reduce the scale of existing debt, and alleviate future debt pressure.

Some industry insiders also believe that the recent debt repayment issues of some real estate companies have increased investors' concerns about the situation of private real estate companies. At this time, LONGFOR GROUP's move to repay debt in advance is also to boost confidence in the entire industry to some extent.

This is not the first time LONGFOR GROUP has done this. On October 31, 2022, LONGFOR GROUP announced the early repayment of 5.1 billion Hong Kong dollars of syndicated loans due in 2023.

On November 1, 2022, LONGFOR GROUP announced on the Hong Kong Stock Exchange that the company had issued an irrevocable notice to the syndicated loan agent to repay 3.45 billion Hong Kong dollars of syndicated loans due in 2023 in advance. After most of the participating banks agree to the early repayment notice, the company will fulfill the repayment immediately.

On November 9, 2022, LONGFOR GROUP announced that it has chosen to redeem $300 million of 2023 maturing senior notes with a coupon rate of 3.9%.

The management of LONGFOR GROUP has revealed that the scale of debt due in 2023 is controllable, with abundant cash on hand, and the cash-to-short-term debt ratio is at a high level in the industry. There are no overseas debts due this year. Public information shows that LONGFOR GROUP has repaid 5 domestic bonds totaling 8.37 billion yuan from the end of July to mid-August. Previously, LONGFOR GROUP CEO Chen Xuping mentioned at the LONGFOR GROUP 2022 Annual Shareholders' Meeting: "Starting this year, we will focus on operating cash flow as the main goal for the entire group. In the future, we will no longer rely on increasing financing and debt scale to drive business growth, but rather rely on the normalization of cash flow in various channels to drive the company's growth."

In terms of sales, in the first 7 months of this year, LONGFOR GROUP and its subsidiaries achieved a cumulative total contract sales amount of 110.12 billion yuan, with a total contract sales area of 6.594 million square meters. As of the end of July 2023, LONGFOR GROUP has achieved cumulative operating income of approximately 14.3 billion yuan, of which operating income is approximately 7.24 billion yuan and service income is approximately 7.06 billion yuan.