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Interface News reporter | Wang Tingting

Longfor has paid off its debts again.

On July 17, Jiemian News learned from Longfor Group that Longfor (0960.HK) completed the repurchase of "19 Longfor 04" bonds on schedule, with the repurchase amount being 1.493 billion yuan.

The issuance scale of the bond "19 Longfor 04" is 1.5 billion yuan. It is a special corporate bond for housing rental. The funds raised will mainly be used for the company's housing rental project construction, renovation and rental expenses, repayment of housing rental project loans and replenishment of the company's operating funds.

According to the Announcement of Chongqing Longfor Enterprise Development Co., Ltd. on the Implementation Measures for the Investor Repurchase of "19 Longfor 04", the issuer may resell the repurchased bonds. However, Longfor Group decided not to resell the repurchased bonds this time, and the bonds were cancelled after the repurchase was completed.

As one of the few private real estate developers in the industry that has not encountered any risks, Longfor Group has continuously repaid bonds on schedule or ahead of schedule this year. This not only helps the company to continuously optimize its debt structure, but also injects a series of positive signals into the industry.

Not long ago, on June 28, Longfor Group repurchased two US dollar bonds from the open market, with a total principal amount of approximately US$623 million. The maturity dates of the two US dollar bonds are September 2029 and January 2032, respectively.

On the same day, Longfor Group also redeemed a CMBS worth RMB 2.65 billion ahead of schedule, and the related bonds were delisted. It is understood that the exercise date for investors of this CMBS is June 2025.

After the completion of the resale of "19 Longfor 04", Longfor Group has paid a total of 8.7 billion yuan in domestic public bonds this year. This is consistent with the previous public response of Longfor Group's management, "Longfor will continue to attach importance to its business and financial foundations to achieve the company's sustainable and orderly development."

Obviously, Longfor Group is also taking actions to continue to repay the remaining debts in advance and return them in an orderly manner, further optimizing its debt structure and improving its financial security. According to Jiemian News, Longfor Group has 3 billion yuan of public bonds due in 2024, including 2 billion yuan due in August and 1 billion yuan due in December.

According to Longfor's current pace of debt handling, the remaining two loans will most likely be repaid ahead of schedule or on schedule. Its confidence comes from sufficient cash flow.

Recently, according to Wind data statistics, Jiemian News found that up to now, 73 real estate companies (reference standard is CSRC real estate industry) have released mid-term performance forecasts or performance flash reports for 2024. Among them, 46 real estate companies are expected to suffer losses in the first half of the year, accounting for about 63%.

Amid industry adjustments, Longfor Group has shown a certain degree of resilience. According to the performance announcement released by Longfor Group on July 12, from January to June this year, the company achieved sales of 51.12 billion yuan and a contracted sales area of ​​3.655 million square meters, ranking firmly among the top 10 in the industry.

Operating income performed well. In the first half of the year, Longfor Group achieved operating income of approximately RMB 13.94 billion (including tax), a year-on-year increase of 7.6%, setting a record high. Among them, operating business revenue reached RMB 7.07 billion (including tax), and service business revenue was RMB 6.87 billion (including tax), both of which achieved growth.

Previously, at the 2023 performance meeting, the management of Longfor Group also made it clear that in 2023, the group's operating cash flow will be positive for the first time in history, reaching 3.5 billion yuan, and that it will adhere to an endogenous development model with positive operating cash flow in the future.

Today, Longfor Group has broken away from its reliance on growth in traditional development business and has officially completed its strategic transformation. The revenue proportion of its two major business segments, operations and services, will continue to increase.

In addition, as the management of Longfor Group told Interface News at the beginning of the year, this year it will focus on acquiring land in some high-energy cities such as first- and second-tier cities, strictly adhere to investment scales, and select the best from the best.

According to CRIC data, real estate developers such as Longfor and Binjiang have been relatively active in land acquisition this year, and their land acquisition-to-sales ratio has remained above the industry average.

Take Longfor as an example. From January to June this year, Longfor acquired 7 plots of land in 7 cities including Beijing, Shanghai, Hangzhou, Chengdu and Foshan, with a total new value of 17.3 billion yuan. Among them, the Shanghai plot is located in Fengxian New Town, the Chengdu plot is located within the first ring of Jinniu District, and the Foshan plot is located in the Zumiao section.

Recently, under various favorable policies, the real estate industry has gradually seen hope.

On July 17, the real estate sector rose against the trend, with Binjiang Group (002244.SZ), Sunac China Holdings (601155.SH), Vanke A (000002.SZ), Poly Developments (600048.SH) all rising by more than 3%, and Longfor (0960.HK) rising by 2.7%. The real estate ETF (159768) market performance was very active, with real-time trading volume exceeding 15.89 million yuan.