Uncle Wen 丨 Lou
At Vanke's annual meeting a few days ago, Yu Liang's remarks became a hot topic, and also let the outside world see the difficulties of the real estate industry.
Yu Liang said that real estate has entered the "black iron era", "This year is a year of backwater war, how to understand the backwater war? It is either dead or alive, and there is no intermediate state."
After all, Vanke is a developer with a state-owned background and is still at the head of the industry, and Yu Liang's statement is enough to illustrate the severity of the situation. In fact, compared with Vanke, the days of those waist housing enterprises are undoubtedly more difficult.
For example, Gemdale Group. A few days ago, Gemdale Group released a performance forecast showing:
In 2021, Gemdale Group achieved operating income of 99.232 billion yuan, an increase of 18.16% year-on-year; total profit of 15.824 billion yuan, down 21.01% year-on-year; net profit attributable to the mother of 9.463 billion yuan, down 8.99% year-on-year; net profit attributable to the mother after deducting non-recurring gains and losses of 8.827 billion yuan, down 9.71% year-on-year.
Profit indicators have slipped across the board, and the total profit has fallen by as much as 21.01%, what happened to Gemdale Group?
01
Gemdale Group can be regarded as a traditional veteran real estate enterprise, with early prosperity and early listing. In the early years, together with China Merchants Real Estate, Poly and Vanke, it was called "Zhongbao Wanjin", and it was one of the four leading real estate stocks that were extremely active that year.
According to the official website, Gemdale Group was founded in Shenzhen, China in 1988, listed on the Shanghai Stock Exchange in 2001, after decades of exploration and practice, has now developed into a comprehensive listed company with real estate development as its main business and the comprehensive development of related diversified businesses.
Source: Gemdale Announcement
The performance report released this time mentioned that in 2021, Gemdale Group achieved operating income of 99.232 billion yuan, an increase of 18.16% year-on-year.
In the context of the sluggish industry, Gemdale Group can also achieve 18.16% revenue growth, which is quite a good achievement. It is worth mentioning that the sales growth rate of Gemdale last year was similar - the cumulative signed amount was 286.71 billion yuan, up 18.15% year-on-year.
However, the sales scale is approaching the gemdale mark of 300 billion, in addition to revenue growth, other items in the performance express report are lackluster, and the decline of a number of profit indicators has seriously reduced the success of scale expansion.
Revenue increased by 18.16% year-on-year, while total profit fell by 21.01%, a difference of nearly 40 percentage points.
In addition, in the first half of last year, gemdale's gross profit margin was 17.36%, down 19.32 percentage points year-on-year. This shows that the situation of gemdale increasing revenue and not increasing profits is quite severe.
Source: Gemdale official website
For the decline in profits, Gemdale said in the announcement, "Affected by the market downturn and the epidemic situation during the year, the company's project settlement scale and settlement gross margin in 2021 are less than expected." ”
However, in addition to the macro factors of the industry's cooling, Gemdale's excessive dependence on cooperative projects, the scale of fat and low profitability, is another important reason.
The data shows that from 2018 to 2020, the investment in new equity land in gemdale accounted for 40.4%, 49% and 51% respectively. In the third quarter of 2021, gemdale added 14.92 million square meters of new soil reserves, and only 5.99 million square meters of equity soil reserves, accounting for 40.15%, far below the industry level.
02
Real estate into the winter, cooperative development has the characteristics of complementary advantages and risk sharing, but in fact, gemdale group's dependence on cooperative development has long existed, and this expansion model must start from the fall of gemdale group.
As mentioned earlier, Gemdale had been on a par with China Merchants Real Estate, Poly and Vanke in the early years, but due to problems in its development strategy, Gemdale soon fell behind in scale.
Source: Network
In order to return to the front line of the industry, Gemdale proposed to "accelerate turnover, do large-scale, and enhance ROE" in 2014; after successfully breaking through the 100 billion sales mark in 2016, after a year, in 2017, it put forward the goal of "3 years to impact 200 billion".
In order to quickly leverage the scale, gemdale's land acquisition strength has been quite large. Among them, the land investment in 2015 was only about 29.7 billion yuan, and in 2017, it increased sharply to 100 billion yuan.
From 2018 to 2020, the total amount of land acquired is also above 100 billion, 100 billion yuan, 120 billion yuan and 135 billion yuan respectively. Even in 2021, when the industry changed, Gemdale acquired 101 cases of land in the first three quarters, with a total investment of about 113.5 billion yuan.
Driven by high turnover and wild land acquisition, gemdale's catch-up road can be described as extremely fast, and the scale growth has rapidly reached a new level. By 2021, gemdale full-caliber sales ranked eleventh on the sales list of Kerui, ranking behind Longhu.
But the problem is that gemdale's expansion model is a rapid impulse at the expense of equity, and profitability is therefore seriously diluted.
It is not difficult to find that the decline in the profitability of Gemdale is far from the situation that only appeared in 2021.
From 2018 to 2020, gemdale's sales growth was more than 15%, while the net profit growth rate was 18.35%, 24.41% and 3.2%, respectively. Net profit margin slipped from 25.4% in 2017 to 18.2% in 2020.
03
An article on the official website "Gemdale: Why return to the top ten real estate?" It is mentioned that the decline in gemdale's profit indicators is "taking time for space".
The problem is that in the era of stock housing, real estate development itself does not have much incremental space. In fact, gemdale's January 2022 results announced a few days ago are also quite dismal: achieved sales of 14.96 billion yuan, a year-on-year decrease of 38.4%.
In addition to the troubles of the decline in profitability brought about by the scale of fatness, the increase in the demand for funds from the scale increase has also brought certain debt pressure to Gemdale.
According to the third quarter report of last year, the total liabilities of Gemdale Group were 361.884 billion yuan, and all three red line indicators passed the customs, ranking firmly in the green file housing enterprises. However, judging from the situation reported by the media, gemdale is suspected of "clear shares and real debts":
From 2018 to 2020, the minority shareholders' equity of Gemdale Group accounted for 30%, 34% and 38.9% respectively, showing an upward trend year by year. In the first half of 2021, gemdale group's net profit attributable to the mother was 1.825 billion yuan, of which the profit and loss of minority shareholders was 1.075 billion yuan, accounting for 37%, that is to say, nearly 40% of the company's net profit was "separated" by minority shareholders.
If the "ming equity real debt" is true, then the real debt pressure of gemdale may be higher than the financial statements show.
In November of last year, Gemdale completed the issuance of a $1.5 billion medium-term note with an interest rate of 4.17% and a maturity of 3 years. At that time, the financing of housing enterprises was difficult as a whole, and there were not many housing enterprises that successfully issued bonds, and Gemdale was able to successfully issue notes, indicating that the capital market recognized its solvency.
But from another point of view, issuing bonds at such a node also means that gemdale's demand for funds is quite strong. For example, on February 17, Gemdale announced that it intends to issue a 3-year medium-term note of 1.7 billion yuan to repay the mature bonds and project development and construction.
In the first three quarters of last year, Gemdale's net operating cash flow was also in a state of net outflow.
Pressures at the level of earnings and debt are only part of gemdale's aggressive expansion. In recent years, gemdale group, which has risen rapidly in scale, has also been involved in some management and quality problems.
According to media reports, in December last year, Dongguan Jinzhan Real Estate, a subsidiary of Gemdale Group, was publicly punished for obtaining a pre-sale permit for commercial housing for false materials; in September last year, two real estate companies under Gemdale were fined 250,000 yuan for false publicity.
On the Internet, there are many complaints and rights protection cases around gemdale product quality, which are all manifestations of radical expansion that has led to the inability of enterprise management and product control to keep up.
The purpose of gemdale sprint scale should have been to obtain more profits, but the result is still stuck outside the threshold of the top ten, profitability does not rise but declines, and the reputation of enterprises is also affected by some complaints and penalties. In this way, can we still reproduce the glory of the past?