Kingkey Smart Agriculture Plans to Sell Non-Core Assets to Alleviate Debt Pressure and Focus on Core Businesses

Kingkey Smart Agriculture plans to sell 100% equity of Shenzhen Kingkey Smart Agriculture Hotel Management Co., Ltd. for 650 million yuan, and simultaneously dispose of non-core bulk assets including Longgang Smart Science Park. The purpose is to release cash, accelerate the sales and de-stocking of real estate projects, and focus on core businesses. In 2024, the company’s total debt was 1.431 billion yuan, cash and cash equivalents were 874 million yuan, net debt was approximately 557 million yuan, and the current ratio was only 0.52, reflecting weak short-term debt repayment capacity but acceptable leverage level (debt-to-equity ratio 0.33) [0].

The cash回笼 of 650 million yuan is equivalent to 45.4% of the total debt in 2024. If all is used to repay debt, it is expected to immediately reduce total debt to 781 million yuan, net debt to zero, and leverage to drop significantly. If part is used for debt repayment and part is retained as cash, it can also greatly reduce short-term debt pressure while maintaining capital flexibility. The direct result of cash replacement is zero net debt, and the current ratio also rises with the improvement of current assets (if all cash is retained, it will increase from 0.52 to about 0.64) [0]. Therefore, it can be judged that this transaction has the effect of “immediate debt reduction”, which helps to reduce financial expenses, improve credit ratings and financing flexibility.

Stripping non-core assets such as the hotel management company and Longgang Smart Science Park not only releases cash flow but also reduces low-turnover, capital-intensive projects. From the perspective of income structure, Kingkey Smart Agriculture’s main business income of “real estate + modern agriculture” has still accounted for a high proportion in the past three years, especially the de-stocking capacity of real estate projects directly determines the speed of cash回笼. Selling non-core assets, focusing on accelerating project sales and cash回笼, can more targeted investment in high-turnover real estate projects and agricultural supply chain construction, improve asset turnover rate, gross profit structure and operating cash flow. In 2024, the company’s operating cash flow has turned from negative in 2023 to positive at 997 million yuan, which again highlights the necessity of improving sales collection and cash utilization efficiency [0].

1. Significant Relief of Short-term Debt Pressure
   : 650 million yuan can almost cover all short-term and part of long-term debts, reducing refinancing needs, which is particularly critical for real estate companies with tight liquidity. [0]
2. Clarify Priority of Fund Use
   : It is recommended to prioritize the回笼 funds for repaying high-interest short-term liabilities and supporting the de-stocking rhythm of key real estate projects, then decide whether to retain part of the cash as flexibility according to market conditions.
3. Asset Structure and Strategic Focus
   : After stripping non-core assets, management resources can be concentrated on real estate sales and modern agricultural operations. With the simultaneous promotion of bulk asset disposal and sales permit plans, it is expected that future operating cash flow and return on net assets will gradually improve.

If you need further evaluation of project de-stocking rhythm, land reserve income capacity, or start deep research mode to obtain more comprehensive brokerage research and predictive modeling, you can continue to put forward specific needs.

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