It is never allowed to sell the company's assets at a low price.
In the past year, this is a request that Xu Jiayin has made many times.
At the beginning of 2022, Evergrande's every move is still attracting market attention. On February 6, at the 2022 Baojiaolou New Year Construction Mobilization Conference held by Evergrande, Xu Jiayin said that since June last year, he has always stressed that the company's assets cannot be sold cheaply at any time, and attention should be paid to preventing loopholes in the process of asset disposal, and cannot rely on cheap assets to pay off debts, otherwise it will be difficult to pay off debts when assets are sold out.
Evergrande's problems cannot be solved overnight, and selling assets at a low price is indeed not the best way.
Gradual dismantling, ensuring the handover of the building, and restructuring are the necessary means for Evergrande to resolve the crisis.
On January 26, Evergrande issued an announcement that Evergrande is promoting auditors to promote relevant work, and will continue to listen carefully to the opinions and suggestions of creditors during the period, and strive to propose a restructuring plan in the next six months. In fact, at present, Evergrande still has 56 million square meters of projects under construction that have not been collected and not opened, 160 million square meters of land reserves and 150 old renovation projects. From the perspective of current asset reserves, Evergrande may indeed have a soft landing, but the difficulty is really not small.
From the richest man to the disposal of real estate, Evergrande's current status quo is a direct result of Xu Jiayin's previous strategic decisions. How "beautiful" it used to be, how painful it is now.
As early as 2015, Yu Liang, chairman of Vanke, had predicted that the golden age of real estate had passed.
Wang Shi also said that the era of digging a pit can make money is over.
However, in the face of the "depression era" of the third- and fourth-tier property markets, Evergrande, Country Garden, and Sunac are obviously unwilling to give up this opportunity. Taking 2015 as a time node, some housing companies began to increase leverage and expand greatly, which is also the cause of today's "tragedy".
From 2015 to 2018, compared with the general housing enterprises, Evergrande, Country Garden and Sunac are the fastest-expanding enterprises, and the company's debt has also begun to soar.
When the third and fourth lines became the "main battlefield" of real estate enterprises, Country Garden took the lead in surpassing Vanke to become a "cosmic housing enterprise", followed by Evergrande, but they did not realize that the previous scale-first model would bring them great trouble. Statistics show that from 2015 to 2016 alone, Evergrande's liabilities jumped to 1.16 trillion yuan, and the asset-liability ratio reached 85.9%.
Behind the crazy expansion is a relatively large differentiation, some people expand, some people withdraw. It was also at this time node that Wanda's Wang Jianlin began to divest the real estate business, that is, the preliminary preparation was relatively sufficient, so after the double killing of Wanda's equity and debt, Wang Jianlin decisively cut down the cultural tourism and disposed of a large number of hotel businesses, so that Wanda could quickly turn the crisis into safety.
In 2017, Evergrande's new land reached 126 million square meters, a record high. In the same year, the Hurun Rich List was released, and Xu Jiayin became The Richest Man in China with a value of 290 billion.
In the days of becoming the richest man, Xu Jiayin may not be happy, because the "winter" of the industry is coming sooner than expected.
In 2018, several accidents in Country Garden gave Yang Guoqiang a headache, perhaps feeling something, Country Garden, which has been famous for its strong and high turnover, stepped on the "brakes" and slowed down the pace of expansion. At the same time, Evergrande also began to look elsewhere, so Xu Jiayin and Jia Yueting "held hands" with new energy.
Statistics show that in the more than one year from 2018 to 2019, Xu Jiayin has announced that he has invested 160 billion yuan in Nansha, Guangzhou to establish three major new energy vehicle bases and signed a new energy vehicle base project of 120 billion yuan with the Shenyang municipal government. The annual investment amount of 300 billion yuan exceeded the market value of China Evergrande at that time. After two years of buying, buying and buying, Evergrande began to change from theory to practice.
At the end of 2019, Xu Jiayin, the "workshop director", held the Evergrande New Energy Vehicle Global Strategic Partner Summit in Guangzhou, gathering the global automotive industry chain and senior executives to participate in the meeting.
On the road of car building, the strategic core of Evergrande is "big". Big pattern, big strategy, big scale. At the same time, Evergrande also developed 15 models at the same time, and in the history of automobiles, the development of new cars of this scale has never been seen before.
What Xu Jiayin did not expect was that winter came so quickly, in a year or two, under the three red lines, Evergrande came to this step today.
Xu Jiayin said: "When the company was operating normally in previous years, the inflow and outflow of funds was very large, such as 1.3 trillion yuan in 2019 and 1.2 trillion yuan in 2020, and we handed over 500,000 and 600,000 households a year during the peak period in the past. The company began to get into trouble last June, and almost no capital flowed in from September..."
In fact, the biggest problem of Evergrande at present is not to build a car or a debt problem, but to guarantee the delivery of the building.
At present, Evergrande Group's pre-sale supervision funds are still more than 50 billion yuan. Xu Jiayin also stressed that the development of Evergrande projects is unbalanced, and the continuity of construction after the resumption of work will be close to the sales of 80 billion yuan of unpaid funds, and the saleable value of nearly 90 billion yuan of baojiao buildings, which is the financial basis for continuous guarantee and delivery.
In 2022, according to Xu Jiayin's vision, it is necessary to complete the goal of handing over 600,000 sets of buildings and about 70 million square meters. If it goes well, after the reorganization, Evergrande may really be able to gradually dismantle the crisis and land smoothly.