Guizhou High Speed Sustained Blood Loss Maotai Group Issued Cross Border "Rescue" For The First Time

Even maoshang group, which has never raised more than 15 billion yuan of bonds, has issued bonds since the outbreak.

On September 16, the information platform of corporate bond project of Shanghai Stock Exchange released the announcement of Maotai Group's public issuance of corporate bonds (for professional investors) in 2020. According to the prospectus (application draft) of Maotai Group's public issuance of bonds, 15 billion yuan is planned to be used for equity acquisition of Guizhou expressway, repayment of interest bearing debt, supplement of liquidity demand, etc. With the approval of Guizhou Provincial People's government, it is agreed to transfer part of Guizhou Expressway's equity held by Guizhou SASAC (the final proportion is determined by the audit report in 2019) to Maotai Group, with the transfer price of 15 billion yuan.

After the bank, Maotai Group has become another financing channel for Guizhou Expressway Group Co., Ltd. (hereinafter referred to as Guizhou Expressway) to reduce high debt.

What does 15 billion yuan mean? As of the end of August, the total direct debt financing balance of parent subsidiary company of Guizhou Expressway added up to 22.5 billion yuan. Maotai Group issued a debt, accounting for about 70% of all debt financing of Guizhou expressway.

Guizhou Expressway's bond issuance prospectus disclosed that this year, the company's debt principal to be repaid within one year is expected to be 26.8 billion yuan. In the future, Guizhou expressway is still in the peak period of investment and development, and the total planned investment of expressways under construction and to be built from 2020 to 2022 is about 100 billion yuan.

Guizhou Expressway's own predicament is in sharp contrast to Maotai Group, which has low asset liability ratio and strong profitability. For the latter, it is not only the first time to issue bonds, but also very rare to invest in loss making enterprises.

"The traffic problems in Western China include new infrastructure construction. We can't just look at the input-output ratio of road construction. From the perspective of national strategic significance, it is far greater than economic significance. Therefore, the investment and financing of transportation in Western China needs the efforts of national and local governments. However, in the case of large capital expenditure on infrastructure, how to balance the profits and losses and reduce the asset liability ratio of enterprises greatly tests the operation ability of the government, so it is not allowed to act in a hurry. " On September 17, Ren Zhihong, director of the Institute of Finance and finance, Guangdong Academy of Social Sciences, said in an interview with a reporter from the 21st century economic report.

Epidemic situation leads to "obvious loss"

With the arrival of new crown pneumonia, Guizhou expressway, which relies heavily on tolls and has a net interest rate of only 1% last year, has fallen into a loss.

According to the public information disclosed by Guizhou expressway, the traffic flow of Guizhou expressway is about 1 / 7 of the same period in previous years from late January to mid February this year. With the approval of the State Council, from 0:00 on February 17 to 0:00 on May 6, all vehicles passing through toll roads according to law shall be exempted from tolls on national toll roads.

In the first quarter, a serious loss occurred, with a net profit of - 888 million yuan. At that time, the enterprise estimated that if the follow-up resumption of work and production was not as expected, and there were still fewer vehicles on the highway, which would have a greater impact on profits. As expected, after half a year's report, Guizhou Expressway suffered even worse losses in the second quarter, with another loss of 1.1 billion yuan.

As a matter of fact, the epidemic has only put the loss of Guizhou Expressway on the surface. Leaving aside the non recurring profit and loss, Guizhou expressway has already suffered serious losses under the appearance of profitability in the national highway industry in the past three years.

Let's first look at the two income statements that differ greatly.

According to the prospectus of Guizhou Expressway's public issuance of bonds in July this year, the net profits of the company in 2017, 2018 and 2019 were 356 million yuan, 352 million yuan and 220 million yuan respectively. However, in the prospectus (declaration draft) of Maotai Group's public issuance of bonds on September 16, the financial statements of the past three years were audited by Zhonghuan Certified Public Accountants (special general partnership). The results show that in 2017, 2018 and 2019, the net profits of Guizhou expressway were as high as 420 million yuan, 460 million yuan and 220 million yuan respectively.

Take another look at Guizhou Expressway's prospectus, which reveals the truth of Guizhou Expressway's profit after deducting non profit and loss: for three consecutive years, the company has been losing money, and since last year, it has suffered a huge loss. In 2017 and 2018, the loss of Guizhou high-speed railway was no more than 100 million yuan, but it was 1.46 billion yuan last year. In the first quarter of this year, the profit of Guizhou expressway after deducting non profit and loss was - 2 billion yuan.

Obviously, the net profit on the statement comes from Guizhou Expressway's dependence on government subsidy income. According to public information disclosure, from 2017 to 2019, the company received 412 million yuan, 479 million yuan and 1.664 billion yuan from Guizhou government subsidies respectively.

Why does Guizhou Expressway lose money year after year?

In an interview with the media, the responsible person of Guizhou Provincial Transportation Department said that due to the geographical and geomorphic reasons, the construction cost of Expressway in Guizhou Province is relatively high. The average construction fund per kilometer in plain areas is about 50 million yuan - 70 million yuan, while the construction cost of Guizhou highway needs 120 million yuan on average. Experts familiar with Guizhou's transportation industry told the 21st century economic report that Guizhou is mountainous, and the bridge tunnel ratio (bridge mileage + tunnel mileage) / (total mileage = bridge tunnel ratio) of Guizhou section from Guiyang to Guangzhou is as high as 75%. On the one hand, the highway construction cost is high; on the other hand, due to the low level of economic development, the unit vehicle flow and toll standard of Guizhou expressway are small and low compared with the eastern and central provinces.

"To be rich first, to build roads." Guizhou's economy is still mainly driven by investment. In 2015, after three years of General Assembly war, Guizhou became the first county to county Expressway Province in Western China. Last year, the mileage of expressways in Guizhou Province exceeded 7000 km, and the comprehensive density of expressways ranked first in China.

Among them, Guizhou expressway is the leading enterprise in the highway industry of Guizhou Province, with four major channels from East, West, North and south. By the end of last year, the mileage of expressways contracted by Guizhou Expressway reached 3848.61 km, accounting for about 55% of the total mileage of expressways in Guizhou Province in the same period.

In the rapid development of highway construction, the revenue scale of Guizhou expressway has exceeded 20 billion yuan for the first time from 14.5 billion yuan in 2017 to 20 billion yuan last year for the first time. However, industry insiders told 21st century economic report that although the toll standard of Guizhou highway is not high, the maintenance cost is high. At the same time, there is a large demand for funds for new projects. At present, the two expressways have entered the peak period of construction. After the completion of some highways, tolls are not included in the revenue, but offset the construction costs. The financial costs brought by loans have risen and meager profits have been eroded.

The funds for road construction are mainly from bank loans, which leads to the high debt ratio of Guizhou. The 21st century economic report reporter learned from the bond issuance prospectus that since 2017, the asset liability ratio of Guizhou expressway has been maintained at about 70%. In the first half of this year, the company's debt reached 289.4 billion yuan. Long investment return period and heavy bank debt burden have always been the great pressure faced by Guizhou expressway.

The government has been helping Guizhou expressway for a long time. In 2016, Guizhou Provincial People's government "on the study of enhancing the financing capacity of Guizhou Expressway Group Co., Ltd." and "guiding opinions of Guizhou Provincial People's Government on deepening the reform of investment and financing system of transportation infrastructure", Guizhou Provincial People's government stipulated that no depreciation should be made for the toll collection and loan repayment expressway.

In March this year, under the superimposed factors of the new crown pneumonia epidemic situation, Guizhou Provincial Development and Reform Commission included Guizhou Expressway into the list of key enterprises for epidemic prevention and control in Guizhou Province (the fifth batch), and arranged syndicated loan business.

In the first quarter of this year, Guizhou high-speed withdraw the preferential interest rate supporting loan provided by China Construction Bank.

Since 2012, Guizhou expressway has raised bonds every year and publicly issued short-term financing bonds, private corporate bonds, medium-term notes and corporate bonds. In August this year, Guizhou Expressway plans to issue no more than 8 billion yuan of corporate bonds. The total amount raised in the first phase shall not exceed 2 billion yuan.

From local products with goods to shares in Guizhou Expressway

Guizhou Expressway and Maotai Group are both provincial state-owned enterprises which are 100% owned and managed by Guizhou SASAC. Before Maotai Group plans to take a stake in Guizhou expressway, Guizhou most beautiful high speed Trade Co., Ltd. under Guizhou expressway is the distributor of Maotai Group.

In the most beautiful high-speed commercial official Weigui express shopping mall, you can get 500 points by purchasing local products, and buy a bottle of Feitian Maotai liquor with 53 degrees and 500 ml.

On September 17, the 21st century economic reporter called the customer service hotline of the mall and learned that the mall was upgrading its small program. After returning to normal, consumers can place an order for Feitian Maotai in the mall with points, with no more than 4 bottles per month.

The mall is divided into alcohol products and agricultural products department, but the two are related sales. It can be said that through the tangible hand of the government, Guizhou's Guizhou products have successfully come out of the mountain by borrowing a bottle of Feitian Maotai, which is hard to find.

Today, Maotai Group from local products "with goods" to issuing bonds to invest in Guizhou expressway, and its low asset liability ratio is optimistic about.

According to the financial statements of Maotai Group, as of the end of June, the net assets at the end of the latest period were 194.2 billion yuan, and the asset liability ratio was 14.21%. It is estimated that 15 billion yuan of bonds will be issued and all the bonds will be used for equity acquisition of Guizhou expressway. Based on the consolidated statements on June 30, the asset liability ratio of Maotai in Guizhou will rise to 19.54%, which is still at a low level.

Due to too much financing, most of the assets of Guizhou expressway have been limited, and its asset mortgage is close to the ceiling. Guizhou Expressway's bond issuance prospectus said that the company's corresponding road toll right has provided pledge guarantee to the loan bank. By the end of March, its restricted assets totaled 281.8 billion yuan, accounting for 71% of the total assets. It is more difficult for Guizhou Expressway to use assets to refinance, but the highway has to be built.

However, it is rare for Maotai Group to invest in loss making enterprises.

One is the enterprise with the best benefit in Guizhou, and the other is the road that Guizhou needs to supplement most. According to Ren Zhihong, director of the Institute of Finance and finance, Guangdong Academy of Social Sciences, how to use the power of the government's visible hand to alleviate the high debt of Guizhou's high-speed railway will test the operational ability of the authorities.

He believes that the western region is vast and sparsely populated. According to the conventional economic calculation, the expressways are in deficit, but we should not treat it with general commercial loans because of the short-term economic benefits. The state and local governments should make efforts in investment and financing channels to attract a large number of private investment. In terms of long-term development mechanism, premium compensation, tax reduction and exemption, transfer payment, structural tilt of central finance and a large number of financial means can be flexibly used, such as asset securitization, loan maturity relatively extended, non-performing assets disposal, etc.

"After all, the factor cost in the western region is relatively low. As long as the interest relationship is sorted out well, the highway still has investment value." He said.

Ren Zhihong said that in the case of prominent capital expenditure in the highway industry, the government should not act in a hurry, and enterprises should make more efforts to coordinate the secondary and tertiary distribution. After the enterprise profits are turned in, they should be adjusted in the tax revenue to make up for the poor and cut the peak and level the valley.