UBS estimates that Shimao Group will have a total of US$4.4 billion in domestic and foreign bonds and loans due next year

Investment bank UBS issued a report estimated that the Chinese real estate company Shimao Group 0813.HK , which is of concern for liquidity, will have about 2.5 billion yuan in domestic bonds due in January next year, and there will be some in April. 700 million US dollars of offshore bonds matured. The bank estimates that the company will mature US$4.4 billion worth of domestic and overseas bonds and overseas syndicated loans in 2022.

UBS said that the total debt of US$4.4 billion does not include RMB 120 billion of off-balance sheet debt.

The report pointed out that the maturity of Shimao Group’s bonds in January next year will be a key event worthy of attention. If the group fails to repay the loan as scheduled, it is believed to have a negative impact on the mainland housing sector, because it was the top 10 mainland developers in terms of contract sales last year, and the group was only rated as an investment-grade developer a few months ago .

Shimao Group announced at the beginning of this month that it intends to raise nearly HK$1.2 billion by allotment to repay debts and other purposes. UBS believes that the group may sell its two development projects in Hong Kong in the next step, namely the Kowloon Tai Wo Ping project and its cooperation with local developers. It is estimated that if the two projects are sold, they can return about US$1.6 billion for the group. In addition, the group may also sell its property management branch Shimao Services 0873.HK equity.

UBS said it is reviewing the bank’s “sell” rating of Shimao Group and its target price of HK$8.7. Based on Tuesday’s closing price, the stock market’s book-to-book ratio was 0.21 times, while the average price-to-book ratio of the mainland housing sector was 0.8 times.

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