Was It "Real" By Real Estate? The Super 20 Billion Textile Giant Is In Debt Default.

A few days ago, the sanding Holdings Group Limited (hereinafter referred to as "sanding Holdings") was defaulted. It is worth noting that this is also the first time that the 20 billion assets of the textile giant default on bonds.

Notice

In September 7th, the sanding holding announcement said that due to the multiple factors such as macro leverage, bank credit contraction and financing difficulties of private enterprises, the company's liquidity problems and debt repayment pressure were relatively large, resulting in the company's failure to repay the "17 triple 01" return principal and interest on time.

Due to the fact that the "17 sanding 01" corporate bond funds and interest can not be paid on schedule, the company issued "17 triple points 01", "17 triple Ting 02", "17 triple Ting 03" and "17 triple top 04" suspension since September 6th.

Announcement screenshots

　　 Ratings have just been lowered.

According to public information, the "17 sanding 01" issue date is September 6, 2017, the issuing scale is 344 million yuan, the duration is 3 years. At the end of second, the issuer adjusts the coupon interest option and the investor's right to sell back, and in September 6th, it is the day of sale, the main underwriter is the state financial securities, and the rating agency is the joint credit rating company.

On Wednesday, the joint rating decided to reduce the long-term credit rating of the AA from "A" to "A". The credit rating of "17 sanding 01", "17 sanding 02", "17 sanding 03" and "17 sanding 04" debt was reduced from "AA" to "A". At the same time, the company's main body and four bonds were included in the rating list that might lower the credit rating.

　　 Rating history

In the past, the Rating firm downgraded the rating in a hurry, and the joint rating was foreseen ahead of schedule. At that time, investors told the media that they had repeatedly communicated with the issuers and underwriters, and all of them were unable to guarantee the normal payment of the bonds.

Liquidity problems

Sanding holdings was founded in October 2003 in "China Commodity City" in Yiwu. It is a large private enterprise with many fields, industries and internationalization. Ding Zhimin, Ding Ermin and Ding Jun min, the predecessor of the three brothers, was founded in 1994 by Yiwu global belt Co., Ltd.

From the perspective of ownership structure, Ding Zhimin, Ding Ermin and Ding Jun min have three brothers holding 34%, 33% and 33% respectively, and both legal persons and real controllers are Ding Zhimin.

　　 ownership structure

Sanding holdings owns 601113.SH and two subsidiary groups, as well as 14 wholly owned or holding subsidiaries.

By the end of 2018, the total assets of sanding holdings were 23 billion 334 million yuan, net assets of 12 billion 784 million yuan, and total liabilities of 10 billion 554 million yuan, including 7 billion 630 million yuan of interest bearing debts and 45.22% of assets and liabilities.

The monetary fund of sanding holdings is 1 billion 911 million yuan, but 385 million of them are restricted funds, and 1 billion 526 million yuan is available. In addition, at the end of 2018, the total credit of sanding holding bank was 5 billion 358 million yuan, and the unused balance was 1 billion 888 million yuan.

Arguably, from the point of view of monetary funds and bank credit, the liquidity of sanding holdings is relatively adequate. Why is there a problem of liquidity tension and thunder?

The pressure of short-term debt repayment faced by sanding is huge. Its short-term borrowing is 3 billion 582 million yuan, its current liabilities are 793 million yuan in one year, and the total amount of two yuan is 4 billion 375 million yuan, far exceeding the sum of monetary funds and bank credit. No wonder there will be liquidity problems.

In addition, there are the following problems:

First, the shares of sanding holdings were high, and inventories at the end of 2018 were 1 billion 403 million yuan, a direct doubling compared to 687 million yuan in 2017.

　　 Second, in the continuous acquisition of investment, sanding holdings formed a huge goodwill, goodwill in 2018 was 1 billion 618 million yuan, 2016 and 2017 were 0.51 and 53 million yuan respectively. On the cash flow statement, the cash flow generated by investment activities was significantly outflow, and 2017 and 2018 were -8.53 and -10.41 billion respectively.

　　 Third, in recent years, the investment volume of sanding Holdings has increased sharply. By the end of 2018, the investment real estate balance was 5 billion 31 million yuan, accounting for 21.56% of the total assets. At present, the domestic economy is slowing down and the price trend of commercial real estate is increasing. If there is a big price change in the real estate market in Yiwu, it may have an adverse effect on the financial situation.

　　 Liquidity tensions can also be seen from the lawsuit. Recently, sanding holdings were accused of not paying 1 million 165 thousand yuan. The plaintiff company asked the company to pay the interest and interest on the overdue payment.

About 20000000000, the Yiwu ribbon giant of assets unexpectedly went to court on account of about 1000000 defendants in arrears. Has the three Ting holding capital chain reached such a tight point?

The capital chain's tight tripod holding company must be looking for money everywhere. 601113.SH announced in August 30th that the controlling shareholder of the tripod holding company held a total of 597 million yuan through its suppliers and in construction projects, accounting for 10.27% of the company's latest audited net assets.

　　 Huting shares announcement screenshot

Sanding holding has taken the property rights of two five star hotels in the Kaiyuan famous hotel and the Marriott Hotel in Yiwu financial business district as the collateral to occupy the capital, raising funds to return the occupying funds and settling the capital problem of the listed companies within one month.

If the controlling shareholder fails to settle in the coming month, it will constitute a relevant violation of the listing rules. The company may be warned by the Shanghai Stock Exchange about other risks, and the controlling shareholders also have the risk of being investigated by the SFC.

In addition, the pledge rate of stock holding stocks is also approaching the limit, with a total holding of 27.53% of huanding shares, of which the share of pledge shares has reached 97.24%.

　　 Stock pledge situation

On the whole, sanding holdings really have problems in liquidity, debt repayment pressure is large, asset limitation is large, and short-term debt repayment pressure is great. Those seemingly big but unable to fall giant enterprises, whose internal capital chain has been very tense, has also used almost the same way to borrow funds, so there is no way to expose the risk of bond default.

Starting a business from scratch

Sanding holdings is one of the top companies in Yiwu. According to official website, sanding Holdings has ranked the top 50 of Yiwu industrial enterprises for 12 consecutive years. It has been selected as the top 500 Chinese private enterprises for 5 consecutive years, and has been elected 100 strong in Zhejiang private enterprises for 2 consecutive years.

Ding Zhimin, Ding Ermin and Ding Jun min three brothers are also prominent figures in Yiwu. In 2006, the three brothers of Ding entered the public view for the first time. Ding Zhimin became the second richest man in Yiwu then. It was second only to the richest man in Yiwu, Weng Rongjin, chairman of the "Sha Sha textile".

　　 Ding Zhi min

Ding's three brothers started their business in 1985, when Ding Zhimin started to set up an umbrella factory, but failed to grasp the market situation and was forced to stop production because of information failure. Ding Ermin and Ding Jun min started a silk factory together with his father.

The turning point of Ding Zhimin in 1993 came when Ding Zhimin saw the great demand for making head ornaments. In Yiwu, he set up the first processing trade company specializing in selling ribbons.

In 1994, the three brothers took 5.8 mu of land and invested 3 million yuan in the industrial area of 23 Li. They founded the Yiwu Delta Global belt Co., Ltd., the predecessor of the sanding holding group and the sanding Ribbon Group.

Since then in 1996, Yiwu global belt Co., Ltd. was famous for its "three top" brand ribbon, and seized the opportunity of other belt enterprises to retreat in the Asian financial crisis in 1997, and set up sanding Textile Co., Ltd.

Subsequently, the three brothers in 2002 founded the real estate development Co., Ltd., and entered the real estate industry.

In September 2002, the three brothers invested 7 million yuan in the production and operation of ribbon production and jointly set up Yiwu Huating nylon Co., Ltd. In the same year, it was regarded as the most important leap in the history of the three brothers.

Hua Ding shares landed on the main board of Shanghai stock exchange in 2011 and became the first IPO private enterprise in Yiwu, Zhejiang.

The three brothers want to extend their integration through the "weaving ribbon benzene" industrial chain, and carry out diversified expansion in the horizontal direction, eventually forming a multi industry supplemented by industry, tourism industry, financial industry and big health industry.

In September 2010, the sanding Plaza project, located in the CBD center of Yiwu and with two five star hotels, was officially launched. Sanding holdings began to expand from manufacturing to service industries. The small business of San Ding, which was officially operated by the end of 2011, began experimenting with innovations in financial services, providing fast, simple, efficient, convenient and reasonably priced microfinance services for "three rural", small and micro enterprises and individuals.

In 2018, sanding holdings invested 2 billion 600 million yuan to start the largest industrial project in Yiwu, Zhejiang. In the same year, it also purchased cross-border electricity business extension technology in the form of fixed increase, which cost 2 billion 900 million yuan, of which the share price was 2 billion 625 million yuan and 275 million yuan in cash.

In recent years, sanding holdings have extended the industrial chain for the risks brought by the traditional main industries such as dispersed ribbons, that is, cross-border acquisitions and investment. This is like two sides of a coin. On the one hand, it makes the enterprise stride forward towards diversified development and dilute single business risk. On the other hand, it is a great test to the enterprise capital chain. If it is careless, it will be plunged into a liquidity crisis.

The pace of foreign investment by San Ding Holdings has not stopped. In August this year, Ningxia Ningdong energy and chemical base management committee and sanding holding company promoted the cooperation of caprolactam polymerization nylon industry integration project. The project will open up the integrated development path of coal chemical industry and petrochemical industry, and realize the extension and integration of industrial chain, with a total investment of 20 billion yuan.