YOUNGOR: Investment Real Estate Failure Plan To Reduce Haitong

Real estate and investment have always been the two main income of YOUNGOR, but with the adjustment of capital market and the downturn of the real estate industry, YOUNGOR is continuing to reduce CITIC Securities.

Yesterday, YOUNGOR confirmed to reporters that 1/10 investment in real estate failed, and said it would reduce Haitong Securities.

Continue to reduce the total holdings of 6 billion yuan in February 6th. CITIC Securities has announced that as of February 4, 2009, YOUNGOR has sold 174 million 894 thousand and 583 shares of the company's shares, of which 45 million 65 thousand and 627 shares are reduced before the company's capital increase, and 129 million 828 thousand and 956 shares have been reduced after the company has increased its capital stock. The reduction has exceeded 3% of the total share capital of the company. At present, YOUNGOR still holds 147 million 371 thousand and 44 shares of the tradable shares with unlimited selling conditions.

In 1999, YOUNGOR invested in CITIC Securities at a cost of 320 million yuan, holding 200 million shares of CITIC Securities before share reform, and holding 184 million shares after the share reform, while citic securities later increased the share capital and increased the shareholding of YOUNGOR.

However, during the period from December 31, 2007 to April 25, 2008, YOUNGOR sold CITIC Securities for 2 billion 997 million yuan, 1 billion 458 million yuan from April 25, 2008 to November 11, 2008, and 1 billion 418 million yuan in February 4 in November 2008 11~2009.

The total is nearly 6 billion yuan.

"Enterprises continue to sell in a short period of time, indicating that companies eager to cash in."

An analyst at United Securities said.

Together with the 2 billion yuan company debt to be issued in the near future, YOUNGOR's liquidity will reach about 8 billion yuan.

Reporter Liu Xinyu, as an investor, telephoned YOUNGOR and said: "there is no cash flow pressure at present. There is plenty of liquidity. The issue of 2 billion yuan corporate debt is just to adjust the debt structure."

Subsequently, the reporter called the company's securities department, a staff member said that the issuance of 2 billion corporate bonds is mainly supplementary liquidity, mainly for clothing production and real estate development projects, "money is better than no money."

The investment failure of real estate 1/10 shows that YOUNGOR's liabilities in 2008 are much higher than those in the same period in 2007.

CICC researchers believe that YOUNGOR's short-term liabilities are high because of the wrong reasons for getting involved in real estate.

YOUNGOR's real estate development funds amounted to nearly 1 billion 500 million yuan. At the same time, YOUNGOR's current liabilities amounted to nearly 1 billion 200 million yuan.

There has long been a rumor about the failure of real estate investment.

Reporters also confirmed from YOUNGOR, "there are several places in the real estate investment that are expensive."

A securities representative told reporters, "the specific location is Hangzhou Institute of Commerce block and Ningbo Beijiao road block.

But only 1/10 of the total land reserve is not big. "

The person added.

In February 2008, YOUNGOR group sold the land west of Beijiao road in Ningbo at a price of 979 million 722 thousand and 800 yuan, with a floor price of 13102 yuan / square meter.

A researcher gave an account to reporters: the land cost of Ningbo Beijiao Road land and Jian an cost is about 16500 yuan / square meter, the selling price is 15000 yuan / square meter, gross profit margin is negative.

Moreover, the average price of New Star City, which is only 2 km away from Huachen north 9, is only 7000 yuan / square meter in March 2008.

The sluggish property market makes the development prospect of Huachen north 9 worrying.

The YOUNGOR plot was purchased by YOUNGOR in July 2007 and has not yet been started.

The land price is 800 million yuan higher than the starting price, and the floor price is 15719 yuan / square meter. The price of land auction in Hangzhou has reached the highest price, and the land pfer fee is as high as 1 billion 476 million yuan.

It is estimated that the land cost and Jian an cost of this plot will be around 21822 yuan per square meter.

The investment of Haitong has lost nearly 750 million yuan. From 2006 to 2008, the proportion of YOUNGOR's real estate income in total income has been rising, the highest has accounted for 30%, and equity investment income has once covered the main industry's shine.

According to YOUNGOR's interim financial statements in 2008, investment income accounted for 54% of its total profits, down from 70% in 2007, 19% in textile and clothing and 27% in real estate.

Roughly estimated, YOUNGOR's stock market value of Listed Companies in 2007 was as high as 24 billion yuan.

Due to the stock market crash, part of the equity investment has shrunk.

Liu Xinyu said: "in fact, equity investment is less than 5 billion yuan, excluding citic securities sold, equity investment has a market value of about 9 billion yuan, to say that the loss of the company is not accurate.

However, investment in Haitong Securities is indeed a loss.

Three quarterly reports show that YOUNGOR holds 200 million shares of Haitong Securities, the initial investment amount is 3 billion 588 million yuan, and the investment cost is around 17 yuan / share.

In February 20, 2009, Haitong Securities closed at 13.22 yuan / share, which calculated that YOUNGOR had lost nearly 750 million yuan.

The daily economic news reporter learned exclusively that YOUNGOR is planning to reduce Haitong Securities next year. The company said it had organized a special team and was jointly responsible for further operation with an investment company in Shanghai.

Some people in the industry believe that YOUNGOR will probably reduce its investment in real estate and finance in 2009, or withdraw completely, and concentrate its efforts on the clothing industry.

Wang Xiaonan: editor in charge