Hopefluent

Receivables dragged for too long as state owned developers are struggling and delaying commission payment due to mounting debt.

Their only borrowing of 350mil hkd is at an interest rate range of 8.5% - 15%. Curious as to why they are taking this loan at this crazy high rate when they are flooded with cash. Anyone know the reason?

(27-09-2020, 12:30 AM)Scg8866t Wrote: Receivables dragged for too long as state owned developers are struggling and delaying commission payment due to mounting debt.

Their only borrowing of 350mil hkd is at an interest rate range of 8.5% - 15%. Curious as to why they are taking this loan at this crazy high rate when they are flooded with cash. Anyone know the reason?

"state owned developers are struggling" - sales been good for PRC developers in general for 2H2019 and post-COVID recovery.  so dont know if this explanation real or not...

(27-09-2020, 07:53 PM)opmi Wrote:

(27-09-2020, 12:30 AM)Scg8866t Wrote: Receivables dragged for too long as state owned developers are struggling and delaying commission payment due to mounting debt.

Their only borrowing of 350mil hkd is at an interest rate range of 8.5% - 15%. Curious as to why they are taking this loan at this crazy high rate when they are flooded with cash. Anyone know the reason?

"state owned developers are struggling" - sales been good for PRC developers in general for 2H2019 and post-COVID recovery.  so dont know if this explanation real or not...

Can google china evergrande to see the news on their recent debt worries and bond scare.

evergrande is not state owned leh.

(28-09-2020, 12:28 AM)opmi Wrote: evergrande is not state owned leh.

Poly Prop has massive neg fcf for two years and a mounting debt too. Anw Hopefluent works closely with Evergrande and Vanke. HF's receivables are a big concern to the market that's why its priced so cheaply now.

even then its is trading below cash. Cash is real because over the years it came in form of issue of shares & sale of business

I am perplexed by its valuation. Its latest earnings seem resilient in the midst of a severe pandemic situation. ( https://www1.hkexnews.hk/listedco/listco...700443.pdf ) The latest valuation is 2.x PE, 0.3x PB ! ( http://www.aastocks.com/en/stocks/quote/...mbol=00733 )

According to its website(https://www.hopefluent.com/b_preas.htm) :
"Many large property developers and Hong Kong-listed real estate developers have begun to put real estate agencies like Hopefluent in charge of their projects. Between 2005 and now, the Group has been the sole agent for renowned mainland property developers including Vanke, Star River (星河灣), Gemdale, KWG Property, China Everbright, Poly, Evergrande Real Estate and Citic Group. The Group is also the agent for projects of the renowned Hong Kong developers like Sun Hung Kai Properties and China Overseas."

If I do a simple google of its customers, i.e. ppty developers listed above, I don't think they are in distress except for Evergrande which has been making the news. Of course, a more elaborate research wld be to comb thru' the ARs/FS of developers, but it takes a lot of effort.

From my reading of the various news(e.g. some links below) on china, I do not see a gloomy scenario on its property market nor a significant dent in the people's fervour for property(guess just like here in SG ?).

I guess part of the reason cld also be investors are somewhat spooked by the HKD1.50 offer earlier.

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https://www.cnbc.com/2020/09/21/china-ec...neill.html

https://www.cnbc.com/2020/07/20/china-pr...-risk.html

https://www.scmp.com/business/china-busi...ies-emerge

Congrats to all that are vested in Hopefluent. amazing surge to two years high

(20-02-2021, 10:58 PM)Scg8866t Wrote: Congrats to all that are vested in Hopefluent. amazing surge to two years high

Any ideas on the possible reasons for the surge ?

It had recently announced a profit warning though :
https://www1.hkexnews.hk/listedco/listco...301123.pdf
"......it is expected that there will be a decrease of more than 50% in the profit attributable to the shareholders for the year ended 31 December 2020 as compared to the corresponding period for the year ended 31 December 2019..... such profit decrease was primarily attributable to the absence of profit derived from discontinued operations ......"

Still trades below cash on its books & way below Book Value. China property sales for year FY20 have been up on yony basis. So expect revenues to be flat if not up with margins under pressure due to COVID and competition.