Vanke online sales conference, said a lot of truth
Editor’s note: This article is from the micro-channel public number “Magic City fiscal outlook”: the author (ID moducaiguan): Financial Secretary.
The day before yesterday, Vanke held the 2020 results online conference.
We talked with you a lot about the content of the transaction side. We didn’t talk a lot about the industry analysis of the real estate enterprise port. The more important reason is that many real estate enterprises tend to speak only on the level of self, and they are all self. Brag.
But this time Vanke’s online performance conference, telled a lot of truth.
This time, I think everyone should consider what Yu Liang said.
1
“Real estate companies, can no longer hoard production resources and earn money for financial leverage as they did in the past.”
This is a big truth. The real estate industry in the past was really comfortable.
The past ten years have been a decade of rapid progress in real estate companies.
The past ten years have been a radical decade for the Chinese property market.
The past ten years have been the ten years in which real estate owners have been on Forbes intensively.
The source of profits for real estate companies, in addition to the normal purchase of land to build a house to make a difference, there is also a very important point, which is to earn money for land storage + money for leverage.
To earn money from hoarding land is actually exchanging time for space.
For many Hong Kong-funded real estate companies, if they can lie down and make money, they absolutely cannot afford to build a house to make money.
Let’s take the Cheung Kong Group under Li Ka-shing as an example.
In 1993, the Beijing Yutianxia Villa project won by the Cheung Kong Group was not fully developed until 2018, spanning 25 years.
In 2006, the Cheung Kong Group won the first massive core plot of Shanghai Zhenru City Sub-center. The original plan was to build Zhenru into a city sub-center because the developer’s project progress was too slow.
After seven years of hoarding land, it was not until 2013 that 700 units were launched. Until now, the project is still under continuous development.
At present, the average price of this residential project is about 90,000 yuan, which is nearly 28 times higher than the land price of 3027 yuan/square meter 13 years ago.
With a difference of 28 times, Cheung Kong’s “time for space” game once again won.
Country Garden makes huge profits through high turnover, and Hong Kong capital can also make huge profits through extremely slow turnover.
Of course, for a large number of mainland real estate companies in China, they are actually playing a game of financial leverage.
A piece of land was originally auctioned for 1 billion yuan. After the auction, the land was mortgaged to the bank and the relevant loan was obtained, and most of the land payment could be loaned out at once.
For real estate companies, as long as there are banks behind them with financial leverage, they can continue to play.
However, what we are facing now is that banks and ZF have also begun to target real estate companies.
For developers with relatively small total funds, such regulations will definitely become more and more difficult, and the phenomenon of big fish eating small fish will definitely become more common.
So, we see that real estate companies in the future must be capital-intensive companies. Only if you have money, you can keep playing.
2
“The house is a durable consumer product. The development of a business is more and more like a manufacturing industry; the business is essentially a content operation, more and more like a service industry.”
These are the original words of Yu Liang, which in fact explain the direction of real estate development to a certain extent.
In the early stage, the real estate company’s understanding of the house was actually very superficial, that is, taking the land to build the building. As long as you can finish building the house, you can always sell the house. It’s just a matter of time.
However, as competition in the real estate industry intensifies and the area per capita increases year by year, the real estate industry will become more and more like manufacturing.
Yu Liang vividly compared the current real estate industry to the Chinese home appliance industry more than 10 years ago.
“At that time, every family in China basically popularized the three major items, and they had already passed the era of shortage. In 2007, the home appliance market had reached the ceiling of close to saturation.”
“The reshuffle of the home appliance industry is cruel. It can be seen that the companies that have survived now, such as Midea, Gree, and Haier, are ultimately relying on good products, good services, and good management capabilities” Yu Liang said.
I believe that colleagues in the real estate industry will definitely feel this way: This is a business that depends on heaven for food.
I believe that many people should still have a deep impression of the market in 2018. At that time, the customers in the entire market were completely vacuumed. Just don’t know why, the customers suddenly disappeared and the market suddenly disappeared.
YesIn the market, I think it is difficult for anyone to make accurate predictions, and it is also difficult for real estate companies to control the market’s popularity.
For Vanke, every time the market goes down, Vanke begins to continuously cultivate its internal skills. For example, Vanke’s refined decoration system and Vanke’s industrialization standards have been gradually promoted after 2008.
Only by turning the real estate industry into a manufacturing industry, can we better resist market risks.
Because it is also a manufacturing industry, developers will definitely pay more attention to the cost-effectiveness of their products, and will also spend more effort to study customer preferences to develop a market that is more suitable for customers.
For customers, they will definitely be willing to pay for better products and services. This is true for the manufacturing industry and even more so for the real estate industry.
So for Vanke, selling a house in the future will no longer be a one-shot deal, but like Gree, Midea, and Haier, it will provide good after-sales and quality assurance, so quality and service will run through The cycle of the entire project is then continuously stretched.
3
The introduction of a series of policies such as “Three Red Lines” and “Double Concentrations” marks that the industry has entered a very clear era of management dividends.
This is Yu Liang’s tone on the hotspot policy.
Some time ago, everyone discussed more about the three red lines of real estate:
1. The asset-liability ratio after excluding advance receipts is greater than 70%
2. The net debt ratio is greater than 100%
3. The short-term debt ratio of cash is less than 1
To put it simply, in the past, developers used to obtain land through debt, and they could continue to debt without limit.
Next, this model will not work.
As for any developer, there is a limit on loans, and it is not something you can borrow if you want.
Why do we have to stipulate this, because once the developer’s capital chain breaks, it is easy to cause a large number of unfinished buildings.
Do we see such things rarely.
In any city, it’s not easy to buy a house. Once it’s unfinished, the economy of a family will be hit hard. The most depressing thing is the down payment, the developer goes bankrupt, and the buyer has to continue. Repay the mortgage.
There is also such a “dual concentration” policy. Local governments will “concentrate announcements on land transfers and organize land transfers” within one year. This is the capital requirements for real estate companiesIt is also very strict.
So, in essence, this is actually putting extreme pressure on developers.
If you have money, you can keep playing.
If you don’t have any money, leave as early as possible, because there will be nothing to do with you.
Because the land is provided centrally, it is not easy for developers to free up a huge amount of funds to auction land at once.
Therefore, we must be more cautious when dealing with each project. For the projects we photograph, we must pay more attention to cost efficiency and improve our management ability to reduce costs.
4
In any market, there are actually opportunities.
For industry benchmarkers like Vanke, there are actually opportunities. In Yu Liang’s words, such opportunities exist on three levels:
1. “Opportunities come from the needs of customers and the development of the city.”
The impact of the epidemic on the real estate industry is actually great. For example, everyone’s time at home is getting longer and longer, but everyone’s social distance is getting shorter and shorter.
We like to stay at home more and we don’t want to go out, so the diversification of the family scene is very important.
The translation is, the same is 90 square meters. Previously, only 2 rooms could be made. The next step is to make 3 rooms or even 4 rooms. The area of the price will be divided into smaller areas to meet more functional needs of users. .
Secondly, in the past, most developers only cared about the supporting facilities within the red line, but now, the one-kilometer supporting facilities in the community have become very important.
So for developers like Vanke, it will definitely involve education, commerce and other fields, and expand the project’s influence to the entire 1 kilometer.
So, in the future, will certainly see more and more developers start to “do not do business properly”, and will see a large number of developers start to enter more diversified fields.
2, “The world-class metropolitan area will become the core driving force of China’s next round of growth.”
In fact, the overall situation is already obvious. Real estate in cities around Shanghai, Beijing, and Shenzhen with relatively small supply will be more in demand, because the metropolitan area in which these cities are located will lead the economic development of the entire China.
Therefore, recently we have seen that cities such as Yiwu, Zhejiang and Kunshan, Suzhou are relatively hot. On the one hand, the cycle of urban rotation has arrived, and on the other hand, their endogenous power is actually very strong.
3, “Like TOD, urban renewal, large and complex projects, etc.Etc., have become an essential element of the future city”.
So, when we look at it the other way around, why did Vanke spend so much money on the TOD Sky City project in Shanghai’s Dahongqiao area, and why should it take a heavy hold on the urban renewal project in Guangzhou.
In fact, it is a step ahead of other developers, first to flatten this way, and then quickly establish their own industry prestige and brand reputation, so as to better exercise their capabilities, achieve brand premiums, and increase Everyone’s recognition.
Finally, I want to give you a few more words:
First, from now on, stop buying projects from small developers. What is a small developer? The more arbitrary judgments are those you have never heard of.
Second, most cities may not have the opportunity. You can focus on the cities around Beijing, Shanghai, and Shenzhen. The clustering effect of these cities will become more and more obvious.
Third, the real estate industry’s next growth rate will be slow. Don’t always think about getting rich overnight.
Fourth, for most cities, there will be no new land kings.
Fifth, when buying a house, pay more attention to the functionality of the apartment in the same area, and there are more rooms.
Yu Liang said that the real estate industry will officially usher in the knockout round in the second half.
The reshuffle of the real estate industry will officially begin!