【Editor's Note】 Who built today's business world? Who will dominate the future of this colorful world? It's businesses and entrepreneurs.
The laws of competition in the new era are also undergoing qualitative changes, which are not only violently impacting enterprises and the competitive landscape, but also profoundly changing our traditional understanding of the business world. The "entrepreneurs" who promote the enterprise to move forward have mastered the wisdom of advance and retreat, the courage to innovate, and have a profound insight into the industry in the torrent of the times.
"Fox Says Business Road" pays attention to the enterprise itself, and also tries to outline the group portrait of entrepreneurs in the business world, portraying this vivid person and seeing this force moving forward with the business world.
Since the end of September 2021, Fox Talk Business has launched a total of 14 manuscripts, and in the "Character Series", it has focused on Liu Xiao, executive vice president and chief operating officer of Vanke Group, and Chen Jinsong, founder of world union bank.
This is the fifteenth manuscript of "Fox Talk Shangdao", that is, the third manuscript of the "Character Series", and the protagonist is Chen Yuhan, the daughter of Chen Jinshi, the founder of Zhongnan Group, Chen Yuhan, general manager of Zhongnan Construction (000961.SZ).
Produced | Sohu Finance
The author | Wu Ya
The day after the Start of the Spring Festival in 2022, Chen Yuhan's position and responsibilities in Zhongnan underwent new changes. According to the personnel adjustment announcement issued by Zhongnan Land, a real estate sector of Zhongnan Construction, on February 8, Chen Yuhan will no longer concurrently serve as the president of Zhongnan Land, but only the chairman of Zhongnan Land.
This is the second "decentralization" of Chen Yuhan, 36, who has gradually taken over the family business in nearly 13 years since he entered Zhongnan Construction in 2008. The last time was in 2017, when she ceded the position of chairman of Zhongnan Land to Chen Kai, a star professional manager in the real estate circle, and Zhongnan's scale grew rapidly.
Compared with the first "decentralization" or the hand of the borrower to seize the development opportunities, under the current market environment of the real estate and construction adjustment period, Chen Yuhan has now "decentralized" again, which has a little more flavor of conforming to changes in the market environment. The new successor, Han Jie, as a senior real estate veteran, may be more suitable than Chen Yuhan to lead Zhongnan to boost real estate performance.
"Decentralized" professional managers
In the future, Zhongnan Land's decision-making power in business operations, the management of various functional lines and the responsibilities of various regional companies will be transferred to the hands of Han Jie, a veteran of real estate.
A senior professional manager told Sohu Finance that it is very rare in the industry to directly promote the president from the Xi'an region, "In recent years, most of the promotion of real estate enterprises to presidents comes from high-output areas such as East China and South China." Like him (Han Jie), either he has outstanding performance internally, or the boss is highly recognized. ”
According to public information, Han Jie was born in 1974, and at the age of 48 this year, he graduated from a local college in Xi'an in civil engineering. Before joining Zhongnan in 2017, he worked for Xi'an High-tech Real Estate, Longhu, Xuhui and other enterprises, and the positions he held ranged from engineering management to operation, hotel property, and almost all of the front, middle and late stages of the real estate industry.
In 2017, Zhongnan Land entered the Xi'an market for the first time and established a regional company. It was in this year that Han Jie became the president of the region and became the "No. 1 employee" of the region. Data disclosed by third-party institutions such as Kerui shows that in 2018, Zhongnan Land ranked sixth in the sales ranking of real estate enterprises in Xi'an.
At the beginning of 2020, Zhongnan merged Xi'an and Zhengzhou regions into Xizheng region, and Han Jie then served as the president of Xizheng region. This year, Zhongnan's signing volume in Xi'an was 15 billion yuan, ranking among the top 3 in the sales list of Xi'an real estate enterprises.
By the end of 2020, Han Jie was promoted to vice president of Zhongnan Land and continued to serve as the president of Xizheng Region. It can be seen that Han Jie has rich experience in front-line actual combat and has "military merit".
The industry is more familiar with Han Jie is the characteristic cultural tourism project Nan WuShanJu, which is one of the representative projects of Zhongnan and has a high degree of recognition in the industry.
In addition to the conventional real estate development projects, in 2021, the Xizheng area led by Han Jie also explored the "light and heavy" model, taking the lead in accelerating exploration and expansion in the field of asset-light agency construction, and has signed 6 agency construction projects so far.
In the real estate circle with frequent personnel flow, Han Jie's stability is also strong, after 6 years in Xi'an Hi-Tech and more than 8 years in Longhu. Now he has been in Zhongnan for 5 years, and he is one of the executives trained within Zhongnan.
Official data also shows that 80% of The Central South Land's management team will come from internal promotions in 2021, and 50% of regional presidents will also come from internal promotions.
Some industry insiders familiar with Zhongnan revealed that Zhongnan pays attention to "high performance orientation" and pays more attention to regional companies and generals with self-driving power. Within Zhongnan, there will be some regional companies that will be classified as "military-level areas", with higher independent decision-making power and correspondingly higher performance.
At the same time, Zhongnan pays attention to "clear rewards and punishments, rewards for meritorious service, and correction of mistakes". In the eyes of industry insiders, "promoting the region is always an affirmation of the past work of the region." "And if something happens, Zhongnan is also strictly investigated, such as Wang Mou, the former general manager of Zhongnan Land's Chengdu-Chongqing region, who was still held responsible by Zhongnan after leaving his job 1 year after leaving his job.
In addition to Han Jie, in this round of personnel changes, four internal outstanding professional managers, including Li Xinyuan, President of Zhongnan Land Shandong Region, and Bi Xingmin, President of Suwan Region, have also been promoted to vice presidents of Zhongnan Land. Two other division heads of regional companies were also promoted and transferred to the headquarters level of Zhongnan Land.
Second degree of "giving way"
In the face of such a veteran with "military merit", in contrast, although Chen Yuhan is the only post-85 female CEO in the current 100 billion housing enterprises, the outside world knows more about her as her "second generation".
If you count from 2009 when he became a director of Zhongnan Construction, Chen Yuhan has been in the family business for 13 years. Sohu Finance once combed through her "succession history" in an article titled "Chen Yuhan Succeeds Zhongnan after 85".
Born in 1985, she studied abroad in her early years, and when the financial crisis broke out in 2008, Zhongnan Group fell into crisis, and at the call of her father Chen Jinshi, she gave up her personal plan to return to China.
In the first few years of entering the construction of Zhongnan, Chen Yuhan did not expose too much. She was widely concerned by the outside world in 2017, when Chen Jinshi introduced many star professional managers for Zhongnan Construction to promote the development of Zhongnan.
Among them, there is Chen Kai, who is known as the "Emperor of Part-time Work" by the industry, who has a rich resume and remarkable achievements, and has helped a 100 billion housing enterprise to achieve nearly ten times the growth of sales performance in three years.
In the face of the joining of Chen Kai, a heavyweight, Chen Yuhan took the initiative to give up the position of chairman of Zhongnan Land, and he himself served as president to report to Chen Kai.
Zhongnan implements "no general culture", the industry is well known, Chen Kai called Chen Jinshi "Old Chen" and Chen Yuhan "Xiao Chen". And Chen Yuhan himself, and Chen Kai and other professional managers have also run into a good relationship.
From the perspective of scale, from 2017 to 2019, when Chen Kai was employed, The sales of Zhongnan Construction increased from 96.3 billion yuan to 196 billion yuan, doubling 2.03 times in three years and entering the TOP20 of housing enterprises.
The corporate organization and management strategy that Chen Kai built for Zhongnan were still retained after his departure. Zhongnan Group once commented that Chen Kai has made great contributions in the transformation of the group from a family-like enterprise to a simple, transparent and efficient public company.
In February 2020, Chen Kai decided to resign as the chairman of Zhongnan Land and no longer be responsible for the real estate business, and Chen Yuhan has served as the chairman and president of Zhongnan Land at the same time.
Comparing her resume with Han Jie, this more or less makes the outside world wonder: whether Chen Yuhan took the initiative to "let Xian" due to lack of ability?
Judging from the adjusted position, Chen Yuhan did not completely withdraw from Central South Landmark, only resigned as president and still served as chairman. However, market analysis generally believes that the identity of the chairman may be more inclined to "sit behind the scenes and take charge of the overall situation".
Reality "pushes back"
In terms of performance in recent years, there is indeed pressure in Zhongnan. From 2016 to 2019, Zhongnan achieved a rapid increase in sales from 50.2 billion to 196.1 billion, with a compound annual growth rate of 57.48%.
However, in 2020, Zhongnan's sales only reached 223.8 billion yuan, although it increased by 14.2% year-on-year, but it did not achieve the established annual sales target of 230 billion yuan.
Entering 2021, the real estate industry has not ushered in the spring after the epidemic, and the market environment has undergone rapid changes, posing greater challenges to the operation of housing enterprises.
At the end of January this year, listed real estate companies intensively issued 2021 performance pre-loss announcements, almost collectively announcing that they would hand over the most tragic report card since the 2008 financial crisis. Zhongnan Construction expects the company's net profit attributable to the mother for the whole year of 2021 to be 708 million yuan – 2.123 billion yuan, down 70% - 90% year-on-year.
Zhongnan's explanation is that a combination of factors such as policy regulation, market adjustment and epidemic has led to such results, and it is also expected that due to the impact of the spread of industry risks, the company may increase the risk reserve of various receivables.
In 2021, Zhongnan achieved sales of 197.37 billion yuan, a year-on-year decrease of 11.8%; sales area of 14.686 million square meters, a year-on-year decrease of 12.9%. According to the sales target of 250 billion yuan, the completion rate is 78.95%.
In addition to the decline in sales growth, for Zhongnan, the sales release limitations of the follow-up third- and fourth-line inventory and the low profit margin are all problems that still need to be solved this year.
In parallel with the personnel changes, Zhongnan Land also adjusted its organizational structure, that is, the Suwan area and the Suzhou-Shanghai area were merged into the Shanghai-Suzhou region, with Bixing Mine as the person in charge; the Haixi region and the Liangguang region were merged into the South China region, and Yang Jie was responsible.
It is not unusual for the merger and reorganization of regional companies to happen to real estate companies, and in 2021 alone, Zhongnan Land has been exposed twice. In May of that year, Zhongnan Land merged from 10 regional companies into 5 and established a new Northern Regional Company, and at the end of October, another round of mergers was carried out, including the merger of Chengdu-Chongqing region and Yunnan-Guizhou region into southwest regional companies.
The adjustment of the organizational structure of housing enterprises is the norm in the industry, and in the view of many regional executives of housing enterprises, "if the performance is done well, it will stay, and if it is not done well, it will be cut." Fundamentally, the market and customers have changed, and the organization has to change. ”
Indeed, judging from these three adjustments, the urban investment layout strategy of Central and Southern China has not undergone fundamental changes, and it is still focusing on strategic economic belts such as the east coast of China, the two guangzhous and the population-intensive core cities in the interior. However, in the increasingly tight macro policy and sales downturn, this adjustment in Zhongnan has become an inevitable choice.
In terms of these dimensions, Chen Yuhan's "decentralization" will hand over the more substantive real estate operation and execution of Zhongnan Land to a group of veterans who have rich practical operations, or it is also a reality.
The wish of "dual main business" synergy
According to the official statement of Zhongnan, as the general manager of Zhongnan Construction, Chen Yuhan will stand in a higher vision in the future, carry out listed company platform management, realize the integration of industrial chain in the superior resources of Zhongnan Land and Zhongnan Construction, strengthen the synergistic development advantages of "dual main business", accelerate exploration and expansion in the field of agency construction and EPC, and form a unified synergy for the capital market.
Studying this official statement, at least we can interpret this information: the promotion of Han Jie, who has rich experience in real estate development and has tried to do so in the field of agency construction, is in line with the direction of the development of the industry in Zhongnan.
Chen Yuhan himself has not been "out" from Zhongnan Land and even Zhongnan Construction, but his role and responsibilities will be adjusted: for Zhongnan Construction and even the entire Zhongnan Group, seek a survival strategy that matches market changes.
The outside world is not unfamiliar with the growth history of Zhongnan Group, Chen Jinshi led 28 people from 1988, carrying the 5,000 yuan of funds cobbled together from the east to start a business, and has cultivated Zhongnan Group into one of the top 500 private enterprises in China. According to its official website, the group currently employs more than 100,000 people, and the group's comprehensive revenue in 2020 is 316.5 billion yuan.
In terms of industrial layout, Zhongnan Group is a "4+1" pattern, namely Zhongnan Land, Zhongnan Construction, Zhongnan Industrial Investment and Zhongnan Education. Specific to the two major industries of Zhongnan Land and Zhongnan Construction, it is packaged in the listed company of Zhongnan Construction, and in 2009, it completed the A-share listing through the backdoor Dalian Golden Bull.
Although Zhongnan Construction started with the construction industry, the first major source of revenue is still the real estate business. From the latest 2018 to 2020, the proportion of real estate business revenue rose from 68.71% to 74.52%, compared with 71.15% in the latest first half of 2021.
However, the excessive proportion of real estate and the impact of the downward environment of superimposed real estate also directly affect the performance of Zhongnan Construction. In the first half of the year, the revenue of the real estate business increased by 31.5% year-on-year, but due to the difference in settlement structure and the impact of the decrease in investment income of non-consolidated projects, the gross profit margin fell by 0.34 percentage points year-on-year to 19.06%, which in turn dragged down the overall gross profit margin of listed companies.
Driven by factors such as rising raw materials and commodity prices, the construction business is also climbing comprehensive costs, which has increased the construction expense rate in Central and Southern China, which eventually led to pressure on the profit side. In the first half of the year and the first nine months, Zhongnan's total revenue increased by more than 29% year-on-year, but the decline in net profit attributable to the mother was further expanded from 14.72% in the medium term to 37.79%, and other profit indicators such as net profit margin were almost "declining across the board".
The capital market is pessimistic about this, after the release of the interim results, the stock price of Zhongnan Construction has directly fallen to a stop, and there is no investor participation in the performance briefing. As mentioned earlier, in terms of performance forecasts, Zhongnan may continue to hand over a 2021 annual report of "increasing revenue without increasing profits".
Under the new normal of the current real estate and construction entering the adjustment period, solving the problem of coordinated development of "dual main business" is also more urgent and realistic for Zhongnan.
The method of safe landing
In January this year, Zhongnan revealed its strategic direction to the outside world. At that time, Chen Yuhan sold zhongnan as the actual controller to China Resources Vientiane Life (01209.HK) at a price of no more than 2.26 billion yuan, which was once interpreted by the market as Zhongnan's capital embarrassment and "selling son" bailout.
Since 2021, under the market of real estate "bearish" and housing enterprises "thunderstorm", although there has been no debt risk in Zhongnan, it has also faced negative news and pessimistic public opinion.
Judging from the financial report, the overall debt repayment pressure in Zhongnan is small. As of the end of the third quarter of last year, the company's total interest-bearing liabilities were about 63.7 billion yuan, a decrease of nearly 20% from the end of 20 years, accounting for about 21% of the total liabilities. In the next year, the interest-bearing liabilities due will be 16.6 billion yuan, with an average monthly repayment demand of about 1.4 billion yuan, and the highest single month will be only 3.9 billion yuan.
In addition, in the first three quarters of last year, Zhongnan's operating cash inflow was about 112.3 billion yuan, which was nearly 7 times that of various interest-bearing liabilities due within one year, and the average monthly operating cash inflow was about 12.5 billion yuan; the net cash flow from operating activities was nearly 1.4 billion yuan, an increase of nearly 95% year-on-year, maintaining positive value for four consecutive years.
The scale of ZHONGNAN Construction's US dollar bonds is also at a low level among real estate enterprises, with only 3 US dollar bonds in existence so far, with a total amount of 412.85 million US dollars, and no US dollar bonds due in 2021. In terms of domestic bonds, the principal balance of bonds due this year is only 290 million yuan.
The situation of The Central South Service is indeed particular, and it was only heard by the Hong Kong Stock Exchange after submitting the form twice in November last year. Although it is a member enterprise of Zhongnan Group, it is not directly related to Zhongnan Construction or even Zhongnan Group in terms of equity.
Sohu Finance once deeply dismantled the logic of the sale of Zhongnan service in the article "Fox Says Syntao| Property Valuation Winter, Zhongnan Service "Sells Itself" china Resources Vientiane". However, it is undeniable that the funds obtained from the sale of Zhongnan Services will also benefit Zhongnan Group in accumulating medium- and long-term strategic funds.
According to Zhongnan Group, in the future, it will "strategically gather and return to the main business", integrate the resources of the construction industry chain, focus on the development of traditional advantageous businesses such as construction and EPC, and the group's strategy will gradually move closer to the direction of manufacturing or service manufacturing, in order to smoothly pass the adjustment period of the real estate and construction industry.
Strategy determines the organization, and the organization supports the strategy. From this point of view, this change of Zhongnan Land will adjust Chen Yuhan's responsibilities to the platform management exclusively for listed companies, which is indeed reasonable.
At present, Chen Jinshi is still the chairman and legal representative of Zhongnan Construction. But at the 2020 results meeting held in April last year, he had already announced that after the next board of directors change, both positions would be handed over to Chen Yuhan.
Chen Jinshi himself was also very satisfied with his daughter, at that time, he once praised Chen Yuhan at the performance meeting, "She is mature", and also let investors have confidence in Chen Yu.
(Second from left) Chen Yuhan, (third from left) Chen Jinshi attended the 2020 performance meeting of Zhongnan Construction, picture source: Sohu Finance
Chen Yuhan herself does have an independent concept of company management, at the performance meeting, she clearly put forward that the logic of high growth does not exist, for Zhongnan, to put down the speed, in exchange for quality improvement.
"Without a reasonable concept of development, Zhongnan will not have a business attitude of dividends for stocks, excellent operation concepts, excellent product concepts, and there will be no sustainable operation capabilities through the cycle, and the company will not be able to cross the hills." She said.
According to Chen Yuhan, the competition in the real estate industry has changed from a 100-meter sprint to a marathon, at this time, we must pay attention to "pace", find our own rhythm, and win the race smoothly through the combination of "fast" and "slow".
Based on the new situation, Zhongnan will enter the adjustment and shift period, and in the future, it will transition from a "dark horse" to a "white horse", pay more attention to the balance of growth rate and operating quality, and pay equal attention to scale and profit.
After that, Zhongnan has indeed changed, and in 2021, the pace of land acquisition has been significantly slowed down, and the third and fourth lines have been actively sunk, and the proportion of diversified land acquisition and cooperation projects has been increased.
The data shows that the cumulative amount of land in Zhongnan in 2021 was negative for 6 consecutive months year-on-year, the cumulative amount of caliber investment and sales ratio dropped to 21%, the intensity of land acquisition began to decrease since July, and there was no new soil reserve directly in September.
Entering 2022, the downward pressure on the market still exists, and almost all housing companies are still feeling the pain of the industry to a greater or lesser extent. The data shows that the sales of the top 100 housing enterprises in January fell by nearly 40% year-on-year.
Specific to Zhongnan, in January this year, the real estate business achieved sales of 610 million yuan, a year-on-year decrease of 66.1%; the sales area of 379,000 square meters, a year-on-year decrease of 62.9%; the construction of construction business construction to undertake (winning the bid) 12 projects, the total contract amount is expected to be 0.2 billion yuan, a year-on-year decrease of 99.4%.
In the past, Zhongnan experienced a rapid expansion and development in the market. Today's Zhongnan, like many housing enterprises, must study the method of "wintering" and the strategy of safe landing. The new test for Chen Yuhan may have just begun.