Research On The Deleveraging Of Real Estate Enterprises Under The "Three Red Lines"

After the introduction of the "Three Red Lines" in August 2020,a total of 172 listed real estate companies were supervised,but only 18 of them met the standards and were classified as green,while 33 of them stepped on all three red lines and were classified as red.It can be clearly seen that the current high leverage phenomenon in China’s real estate industry is particularly serious.Therefore,in order to meet the three red line indicators,China’s real estate enterprises have officially entered the stage of deleveraging,but the effects of deleveraging are quite different.After the "three red lines" financing regulatory policy was officially implemented.The development model of "high turnover,high debt,and high leverage" of real estate enterprises in the past will be completely changed.Most real estate enterprises are striving to meet the national "three red lines" standards in a short period of time by means of "reducing financing,reducing investment,and promoting repayment".However,doing so may lead to the phenomenon of doubling the result with twice the effort,which is not conducive to the future development of real estate enterprises.Based on risk management theory and modern capital structure theory,this article selects Jinke Shares as a research case,starting from the phenomenon of rapid deleveraging within three months and a rebound in leverage after less than a year.Firstly,it introduces the motivation of Jinke’s deleveraging,and then introduces the current situation of Jinke’s deleveraging based on the change time of the "three red lines" indicators.On this basis,the paper analyzes the path,effect,and reasons for the rebound of Jinke’s deleveraging.It is found that the deleveraging path of Jinke Shares is manifested in four aspects: investment,financing,sales,and operation.The main measures for investment are to improve the way and pace of land acquisition to reduce costs;In terms of financing,it splits off its property subsidiary "Jinke Service" to increase equity and reduce liabilities;The main approach in sales is to accelerate sales collection and improve the quality of payment collection;In terms of operation,it is necessary to strengthen the synergy between the main real estate industry and the industrial chain.The effect of Jinke’s deleveraging is also quite significant,but after successful deleveraging,Jinke’s leverage rebounded within less than a year.At the end of 2021,Jinke’s short-term debt ratio rebounded.After analysis,it was found that the reasons for the rebound were insufficient cost control,unreasonable financing structure,excessive debt financing,and increased credit risk due to hidden liabilities.Through analysis and discussion of the deleveraging situation of Jinke Shares,based on summarizing and absorbing the experience of Jinke Shares in deleveraging,relevant suggestions are put forward to help the real estate industry deleverage.To achieve rapid and non rebound deleveraging in the real estate industry,it is necessary to achieve a multi-pronged approach to rapid deleveraging and high-quality development to prevent leverage rebound.The specific recommended measures are as follows: In terms of rapid deleveraging,it is necessary to control the pace of land acquisition and carefully hoard land;Increase efforts to eliminate inventory and attach importance to product quality;Adjusting the structure of interest bearing debt and strengthening financial management;Increase equity capital and alleviate financial pressure;In terms of preventing leverage rebound,it is necessary to improve the comprehensive evaluation system of financial indicators;Establishing a financing risk management system;Exploring new development models;Improve the external guarantee mechanism.