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The real estate sideways era is coming: the developer transformation is burning

Editor:嘉兴市博莱特纸业有限公司 │ Release Time:2018-09-11 

The market contraction superimposes the high pressure of real estate financing supervision, and housing enterprises are short of money. They are known for their extensive and high profits, and they are seeking to survive under the pressure of the capital chain. Some continue to high-interest bond issuance, and more actively try to diversify business development. The derivative business is mainly divided into five major directions: pension real estate, cultural tourism real estate, characteristic town, education real estate and logistics real estate. According to institutional statistics, 19 housing companies have taken away the word "real estate" this year - one is to wipe the ball for the passage of financing, and the other is that the expansion of the business scope is no longer confined to the real estate. Such an attempt is more positive and more difficult. In the unfamiliar areas, the South Wall is frequently hit, and there have been many cases before. However, I don't seek a breakthrough, I am afraid that it is also a dead car. Since ancient Huashan Road, how to go? This tests the wisdom of the helm.

Transformation anxiety VS border infinite

In a market environment where capital pressures continue to rise, the movements of real estate companies in diversified businesses are accelerating.

On the evening of November 12, Jiakai City announced that it would develop a second main business and enter a promising cinema industry. It plans to sign a number of “lease contracts” with Evergrande and its subsidiaries to Evergrande Real Estate. And its subsidiaries lease a number of venues as a business location for the company to open some of the studios. For this reason, Jiakai City does not hesitate to transfer real estate-related equity. On the evening of November 9, Jiakai City (000918.SZ) announced that the company will actively develop the second main business, and will transfer part of the equity of real estate projects held in the future according to the residential business development strategy. This will provide a relatively strong financial reserve for the next step of development and will have a positive impact on the company's cash flow. Behind the second main business of Jiakai City's transformation, it is very likely that China Evergrande has a quiet layout in the cultural industry.

Not only Jiakai City, many developers have demonstrated their determination in order to transform and even change their name. In 2016, Agile Property changed its name to Agile Group and carried out a strategic upgrade in 2017 to expand its property, education, environmental protection, construction and other related businesses, claiming that 50% of the future revenue will come from diversified businesses; in February 2018, Times Real Estate was renamed Times China has become a diversified pioneer in small and medium-sized housing enterprises. The company has entered many fields of commercial real estate and characteristic towns. Immediately after March 23, Longhu issued an announcement – it is proposed to change the company’s Chinese name to “Longhu Group Holdings Co., Ltd. "The reason for the change of name is that the group now covers the four main channel business of real estate development, commercial operation, long-term rental apartment and property management. In the future, it will deeply explore and participate in the reconstruction of urban space and services." In mid-September 2018, Poly Real Estate has been promoted to “Poly Development Holding Group Co., Ltd.”, which is also to reflect the development direction of the company's diversification.

According to institutional statistics, 19 housing companies have taken the word "real estate" this year. The derivative business is mainly divided into five major directions: pension real estate, cultural tourism real estate, characteristic towns, education real estate and logistics real estate.

However, the transition boundary of housing enterprises is expanding indefinitely. They even look at a broader field in the hope of finding new performance growth points, including entertainment, retail, health, agriculture, environmental protection, technology, and sports. In 2018, Evergrande claimed that it would invest 100 billion yuan to enter the technology circle in the next decade, and lay out its layout in the fields of AI, quantum computing and aerospace science and technology. It signed a cooperation agreement with the Chinese Academy of Sciences and invested 100 billion yuan to build three research bases.

The Kerry Research Center conducted statistics on other business situations of the top 30 housing companies. There are 6 layout retail businesses, including Country Garden, Evergrande, Vanke, etc.; 16 large health industries, including Huaxia Happiness, Sunshine City, Taihe Group, etc.; 7 agricultural enterprises, including China Resources Land, Greentown China, etc. 6 layout of environmental protection industry, including China Overseas Real Estate, China Jinmao, etc.; 5 layout technology industries, including Evergrande, Greenland Holdings, Blu-ray development, etc.; 7 sports industry, including World Trade Real Estate, Gemdale Group, R&F Real estate and so on.

"I want to eat too hot"

For any business, transformation is not easy. In Ouyang Jie's view, the current mentality of the transformation of housing enterprises is more "to eat and fear hot." "In the future, the real estate market has basically become a consensus. It is not diversified, and its performance growth is difficult. To be diversified, it is not bad to chew," he said.

"From a subjective point of view, private housing enterprises do have the need to expand real estate-related business. On the one hand, the real estate industry is in a stage of great change, and the future real estate demand will be diversified, including pension, tourism, logistics, etc. The development of leasing has also prompted housing companies to join the long-term rental apartments and other fields. Or choose to enter the construction, brokerage, financial services and other fields to extend the industrial chain," said Zhang Bo, chief analyst of 58 Anju Rooms Research Institute.

However, it is worth noting that the transformation of housing enterprises is more "competitive" than actual. The 21st Century Business Herald reporter reviewed the annual report of the Taihe Group, which has been keen on diversification in recent years. The annual report shows that although the diversification of Taihe Group involves various sectors such as medical, hospitality, cinema, finance, and travel, it is still real estate that truly supports the main performance of Taihe Group. Taihe Group's 2017 annual report shows that during the reporting period, the company achieved a total operating income of 24.331 billion yuan, real estate business accounted for 96.61%, chemical industry accounted for 0.62%, service industry accounted for 0.80%; retail industry accounted for 1.37%, other The business accounted for 0.60%. Behind the composition of the business is profit driven. Taihe Group's annual report for the first half of 2018 shows that the real estate industry's gross profit margin topped the list with 33.24%, while other services such as service industry only 11.5%, the lowest business segment gross margin was only 6%.

Zhang Hongwei, chief analyst of the same policy research institute, believes that this is not a performance of real estate, but an attempt to upgrade some operational services based on the main business of the real estate, because the incremental ceiling of commercial residential sales will be up to five to ten in the future. Years will appear. Therefore, from the perspective of enterprises, it is inevitable to do some planning and transformation in advance at this stage, and look for opportunities for long-term development of enterprises in the stock business.

In addition, there are more realistic reasons for the diversification of housing enterprises. "The diversified development of private housing enterprises is objectively aimed at expanding the scope of business to better solve the financing problems faced by enterprises. In recent years, the intensity of real estate financing supervision has not weakened, even in the second half of this year, the central bank continued to 'release water'. During this period, there is still no relaxation. In this context, the method of renaming is one of the ways to achieve financing.” Zhang Bo said.

Zhang Bo believes that whether the transformation can be successful or not depends on whether it can have a matching core competitiveness. Under the current market environment, the transformation means that the real estate development and sales operation experience of the real estate enterprise and the brand advantage are zero. It is not easy to build core competitiveness in a new field, but it is worth trying for some housing companies.