In the first half of 2020, Blu-ray Development (600466.SH) has sold 100% of its shares in Dikang Pharmaceutical, and now it has transferred its property management business again. Yihan think tank believes that in the special period of tight corporate cash flow, the practice of selling part of the truly valuable business is not indispensable. After all, this move can seize the opportunity to “self-help” and avoid repeating the mistakes of Tahoe and Huaxia Happiness.
Sell assets again
On February 23, 2021, Blu-ray Development was temporarily suspended for one day due to no announcement due to important issues. Blu-ray Development said that, given that the company is planning a major event, the matter involves the change of control of its subsidiary Sichuan Blu-ray Jiabao Service Group Co., Ltd. Due to the significant uncertainty in this matter, in order to ensure fair information disclosure, protect the interests of investors, and avoid abnormal fluctuations in the company’s stock price, upon the company’s application, the company’s stock will be temporarily suspended for one day on February 23, 2021.
On the same day, as Country Garden’s services were suspended at the same time, the market reported that the two parties were about to cooperate in depth. In the afternoon of the same day, it was reported that Country Garden Services would acquire 75% of the shares of Blu-ray Garbo.
Two days later, Blu-ray Development issued another announcement stating that the company and its wholly-owned subsidiary Blu-ray Hejun and Country Garden Service’s wholly-owned subsidiary Country Garden Property had signed an equity cooperation agreement framework agreement. Country Garden Property intends to acquire 64.6203% of the shares of Blu-ray Jiabao held by Blu-ray and Jun in cash. The total transaction price is temporarily valued at 4.847 billion yuan.
Although the final result is different from the industry speculation that “Country Garden Services acquired 75% of Blu-ray Garbo”, Blu-ray Development also sold an important asset in its hands as rumors outside. Of course, through this acquisition, Country Garden Services has become the largest shareholder of Blu-ray Garbo.
Public information shows that Blu-ray Garbo Service was established in 2000 and listed on the Hong Kong Stock Exchange in October 2019. It is a holding company of Blu-ray Development. As of December 2020, the Blu-ray Garbo service has been stationed in more than 130 cities across the country, with more than 1,400 contracted service projects, and the contracted service area is about 210 million square meters. According to data published on the official website of Blu-ray Jiabao, revenue in 2020 will be 1.17 billion yuan and net profit will be 244 million yuan.
In fact, this is not the first time Blu-ray Development has sold assets. In the first half of 2020, Blu-ray has sold 100% of its shares in Dikang Pharmaceutical.
On July 28, 2020, Blu-ray issued an announcement stating that the company and Landi Sharing intend to transfer 100% of the total shares of Dikang Pharmaceutical to Hanshang Group and Hanshang Da Health, and the latter two are to be acquired separately in cash. Dikang Pharmaceutical’s 109,689,214 shares and 10,310,786 shares, the transaction consideration is only 900 million.
Why sell Dikang Pharmaceutical, the reason given by Blu-ray Development is to focus on residential real estate development and modern service industry.
However, the sale of Dikang Pharmaceutical was regarded by the industry as “crossing the river and breaking the bridge.” As early as 2015, Blu-ray Development Backdoor Dikang Pharmaceuticals achieved A-share listing. In the following five years, with the help of the capital market, Blu-ray development successfully broke through the regional market and spread across the country, and then entered the camp of 100 billion real estate companies.
Although the development of Blu-ray has entered the ranks of hundreds of billions of real estate companies, it still has the common problem of lack of money that is common in real estate companies. Therefore, the sale of assets this time means a lot of “self-help”.
On the evening of January 25, Blu-ray Development released a briefing on its operations from January to December 2020. The data shows that from January to December 2020, the company’s real estate business achieved sales of about 103.5 billion yuan, an increase of about 2% year-on-year, and the sales amount reached 100 billion for two consecutive years, basically gaining a foothold in the “100 billion club”.
In order to continue to maintain its reputation as a 100 billion real estate company, Blu-ray Development has also made great efforts in land expansion. In the whole year of 2020, Blu-ray Development will have a total of 60 new real estate projects, with a total construction area of approximately 9.62 million square meters and a total construction area of approximately 7.16 million square meters.
Blu-ray Development confessed that the transfer of Blu-ray Garbo can get more cash. It stated in the announcement that this transaction is conducive to increasing the company’s cash flow and promoting the operation and expansion of the company’s core business.
Third-party organizations also believe that Blu-ray Development once again transferred the property management business, more out of “self-help” considerations. Yihan Think Tank believes that in the special period of tight corporate cash flow, the transfer of some of the truly valuable businesses can be considered. After all, if you are not afraid of not having firewood, you will easily miss the opportunity to save yourself if you hesitate.
In order to obtain more cash, before the sale of Blu-ray Garbo, Blu-ray Development has pledged equity for four consecutive times in 2021 for financing. According to statistics from the announcement, a total of 244.93 million shares were pledged four times, of which 90 million shares were pledged on January 26; 90 million shares were pledged on January 30; 39.93 million shares were pledged on February 4; An announcement on February 9 stated that 25 million shares were pledged.
It is understood that Blu-ray Development’s controlling shareholder, Blu-ray Investment Holding Group Co., Ltd. and his concerted person, Yang Keng, hold a total of 1,769,642,241 shares of Blu-ray Development, accounting for 58.31% of its total share capital. On February 9, after completing the latest pledge, the total pledged shares of Blu-ray Group and Yang Keng totaled 878,370,000 shares, accounting for 61.76% of the total number of shares held by Blu-ray Development and 28.94% of the total share capital of Blu-ray Development.
Unabated debt pressure
Although the performance is not too bad, but the increase in debt scale has no choice but to put pressure on the development of Blu-ray.
Blu-ray Development released the 2020 annual results bulletin on the evening of February 8. The company achieved operating income of 45.591 billion yuan in 2020, a year-on-year increase of 16.32%; net profit attributable to shareholders of listed companies was 3.509 billion yuan, a year-on-year increase of 1.46%; deductions Net profit was 3.136 billion yuan, a year-on-year decrease of 6.56%. Although the overall performance is not outstanding, it can be regarded as “reasonable.”
Blu-ray Development stated that in 2020, facing the impact of the epidemic, the company adjusted its business strategy in a timely manner, adjusted its investment structure and adjusted it, and comprehensively improved its operation and profitability at the project operation level, and maintained the company’s operating performance.
However, third-party research institutions said that the 2020 epidemic and financing tightening policies have dealt a major blow to most real estate companies, including Blu-ray development. Yihan think tank said that on the one hand, the real estate business developed by Blu-ray achieved sales of about 103.5 billion yuan, but it increased by only 2% year-on-year; on the other hand, the total debt increased from 56.94 billion yuan by 26.9% to 72.24 billion yuan, and it was difficult to collect sales. Maintain the company’s cash flow.
The increase in the scale of debt has caused the debt-to-asset ratio to exceed the 80% mark, which is a relatively high level in the industry. Blu-ray Development announced on February 8 that as of the end of 2020, its asset-liability ratio was 82.23%, and its net debt ratio was 92.93%. After excluding advance receipts, its asset-liability ratio was 73.65%.