By ZHU Dan
Property developer China Aoyuan Group resumed trading in the HKEX on Monday after 17 months of suspension. Shares opened 70 percent down at HK$0.35 (US$0.06, 0.32 yuan). Aoyuan's market cap of HK$2.5 billion had evaporated, with only HK$1 billion remaining.
Tower of debt
In July, Aoyuan proposed restructuring of approximately 43 billion yuan of overseas debt, and in August obtained an agreement from creditors. Only then did Aoyuan issue financial reports for 2021 and 2022. The release of the mid-year report for 2023, completing the process for resumption.
According to the 2023 H1 report, revenue was 11 billion yuan, an increase of 25.1 percent year-on-year. Gross profit was 742 million yuan, almost five times more than a year ago, but a net loss of 2.9 billion yuan was recorded.
Assets were approximately 220 billion yuan, while total liabilities were around 240 billion yuan. Current liabilities exceed current assets, including bank deposits, by about 36 billion yuan.
Long way back
Bank and other loans, priority notes and bonds, amount to approximately 110 billion yuan, of which 103 billion yuan will mature within one year, a huge short-term debt pressure.
A bond interest extension plan has been approved, and all 12 of Aoyuan's domestic public debts of around 12 billion yuan have been extended for 3 years.
