On May 10th, the Kerry Research Center "Digital Wisdom Insights exploring the market in the epidemic" - the online press conference on the trend of the residential market under the epidemic was successfully held. Kerry Research Center, together with eight city institutions, joined hands with fund brokers and industry executives to launch an online forum.
On the agenda of the roundtable forum "Under the 'self-help' of the epidemic, the new model of housing enterprise development and the valuation 'defense war' discussion", Mr. Lin Bo, general manager of Kerry Research Center, participated in the dialogue with Ms. Zhang Yin, vice president of Rongxin Group, vice president of Zhongao Real Estate, and Mr. Sun Yang, deputy general manager of asset management department of Kerry Securities, as the moderator, and shared professional views and insights on marketing, marketing, financing, stocks and bonds.
The following is a review of the guests' wonderful views:
Zhang Yin: After this round of adjustment, the housing enterprises that can survive have entered a new stage of development
Zhang Yin, Vice President of Rongxin Group
Despite the challenges facing the market, Rongxin Group maintained zero defaults.
Rongxin began to reduce debt as early as 2019. Because most of Rongxin's projects are laid out in the Yangtze River Delta, such as First-tier or strong second-tier cities such as Shanghai, Hangzhou, Suzhou, etc., the dematerialization rate is relatively high and the ability to collect money is also relatively strong. In view of the unsustainable business model of high cost and high leverage, Rongxin began to adjust the pace of land acquisition in the first half of 2019, retaining more than 20 billion yuan of funds on the books to adjust the financing structure, return trust, asset management and other high-cost financing products, and reduce financing costs.
Since 2019, the financing department has been based on the cost of financing as the assessment standard. In the first half of 2019-2021, the financing cost of the entire Rongxin Group has been in a downward trend. It is precisely because of the implementation of these measures that the financing structure of Rongxin is relatively simple, the project side is composed of development loans, the capital market side is composed of US dollar bonds and small public offerings, and there is no trust, equity financing, and commercial bill financing. When the state introduced three red line financing standards, Rongxin directly entered the green file. As of now, Rongxin's interest-bearing liabilities have dropped below 50 billion, which is at a low level in the industry.
At present, the market pressure is still large, and the company maintains zero defaults, but market confidence has not recovered so quickly. It is hoped that the state will introduce more measures to help private housing enterprises get out of the predicament. Of course, Rongxin itself will also strengthen open source and reduce expenditure, and actively explore financing channels. At present, the five major asset management companies are also actively communicating with Rongxin to revitalize some existing assets and supplement the working capital of enterprises. Accelerate sales collection and ensure rigid payment of debt. On the repayment side, for non-rigid debts that are due, we strive to communicate with financial institutions, adjust the repayment plan, and spend the difficult period without default.
While many measures have been taken, there is still pressure to cope with short-term cash flow. Rongxin calls for active support for the recovery of the credit of private housing enterprises in the capital market, only in this way can we quickly help enterprises recover and virtuous circle at the financing end.
In the context of the current industry, from the perspective of financing and finance, the new real estate model, after this round of adjustment, the housing enterprises that can survive have entered a new stage of development, and the previous high debt, high leverage, and high turnover model has been completely changed. Under the new model, the requirements for the company's own funds will be relatively high. The project side can only do some development loans, and the capital side will give some appropriate financing means. Rongxin will also ensure that the sales equity collection can cover 1.1-1.3 times the interest-bearing liabilities, so that the sales collection can be used to cope with extreme situations.
Li Guang: For the future city choice, we need to pay more attention to the flow rate and cash flow
Li Guang, Vice President of Sino-Austrian Real Estate
In the face of the adverse impact of the epidemic, China and Austria mainly respond from the following aspects. In terms of company operation, it mainly revolves around the idea of marketing and marketing around customers; In terms of project display, the project was upgraded and displayed in advance of the delivery region, and at the same time, at the delivery end, detailed paving was made to enhance customer purchase confidence; in terms of services, Zhongao Real Estate has been committed to the creation of a sports and health community, providing a healthy lifestyle in the community in the era of the epidemic.
In terms of marketing, sales are promoted by strengthening the work of three aspects. First of all, it boosts the internal drive, strengthens the professional ability of marketers, better feels customer needs, and improves customer experience. Second, under the normalization of the epidemic, we will continue to develop online new media. Sino-Austrian believes that the combination of online and offline sales is the trend of the future. Finally, adhere to the management sinking line, always adhere to the focus on business, focus on management.
From the perspective of the industry, real estate looks at the policy in the short term, land in the medium term, and population in the long term. In the first four months of 2022, the interest rate of 100 cities across the country was reduced, and more than 90 regulatory relaxation policies were introduced. Affected by favorable policies, the first to pick up must be cities with good industrial foundations, strong economic strength and low inventories.
On the other hand, in the medium to long term, land and population flows become top priorities. In May, the state issued the "Opinions on Promoting the Urbanization Construction with County Towns as an Important Carrier", which mentioned that by 2025, the urbanization construction with county towns as an important carrier has made important progress, and the development gap between it and neighboring large and medium-sized cities has been significantly narrowed, and the role of supporting the integration of urban and rural development has been further highlighted. The understanding of Sino-Austrian is that the next 1335 counties and towns in the country will accelerate the differentiation of development, and the top 100 counties in the country, within the metropolitan area and some counties with resource characteristics will usher in historic development opportunities.
At present, the "high debt, high leverage" operation mode has become a thing of the past because of the three red lines and the two red lines of the bank, and enterprises can only rely on good business ability to maintain steady growth. In addition, taking the right land, doing a good job of products, and selling a good house have become the constant pursuit of housing enterprises in the new situation.
For the future city selection, it is more necessary to pay attention to the flow rate and cash flow, and the investment should be both diversified and concentrated. Too much concentration is easy to be affected by the sealing of a single city, resulting in the inability to sell, but too dispersed leads to an increase in management costs, and the future needs to be more refined headquarters and strong areas.
From the product point of view, the epidemic has made everyone stay at home longer and have further improvements in existing living conditions. In the future, the normalization of the epidemic will require the function of the apartment and the supporting demand for the community will become the focus of future community upgrading.
Sun Yang: The original relative valuation standards are constantly being broken by the actual performance of the market
Sun Yang Deputy General Manager of Asset Management Department of Kerui Securities
From the perspective of financing, the current financing performance in the capital market is two days, since the beginning of this year, about 6 billion US dollars of real estate bonds have been issued overseas, but the financing of private enterprises in the overseas capital market has basically stagnated, and individual state-owned enterprises and high-quality private enterprises have also been successfully issued under the evidence of banks.
In the same period, the amount of domestic bond issuance was nearly 420 billion yuan, of which mainly state-owned enterprises, urban investment, and platform companies issued bonds, and there were very few private enterprises. Domestic liquidity is relatively loose, but private enterprises are still under pressure in the bond financing market.
From the perspective of project-side financing, corporate banks that have been thundering are cautious about their refinancing, and can do not draw loans and continue to lend, but it is also difficult to continue to approve new projects.
In general, the current state-owned enterprises and central enterprises are substantially superior to private enterprises at the financing end, and the pressure on private enterprises is still very huge.
From the perspective of the valuation of housing enterprises, the original valuation system of the market is more of a relative valuation, according to the current price of high-quality head enterprises recognized by the real estate industry, as a reference for the pricing of other targets, according to a recognized standard in the market, such as three major ratings, under which the pricing of the target is given in different positions, according to industry policies, market public opinion, company management changes and other market makers to make positive or reverse tentative price adjustments. There is no reference target in the downward market, the evaluation standard is distorted, the financial optimization is distorted, and the relative valuation is a black box, which is easily manipulated by public opinion.
At present, the real estate market is frequently thunderstormed and credit crises are frequent. The original industry beliefs and relative valuation standards are constantly broken by the actual performance of the market.
On this basis, after doing a lot of research and discussion with domestic and foreign investment institutions, Kerry Securities has developed an absolute valuation system, starting from the asset dimension of a single project, assessing asset quality, calculating asset value and liquidation value of housing enterprises. The above assets can be divided into two categories: residential and non-residential, the sales-type property is evaluated according to the quality of the land obtained by the housing enterprise and its surrounding market, and the holding property is evaluated according to the current operating conditions, rent level, future development potential, etc. On the basis of asset research and judgment, reverse engineering according to the way of report optimization, dehydration of the three red lines, reshaping the evaluation standards, while measuring the solvency of housing enterprises in the case of no longer financing, these indicators in the enterprises that have been thunderstormed, most of us find risks in advance of a fiscal quarter, superimpose the overall performance of housing enterprises on the basis of absolute valuation, and finally give a fair and quantifiable valuation reference system for housing enterprises.
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Recorded | Kerui Research Center "Digital Wisdom Insights exploring the market in the epidemic" - the online conference of the residential market trend under the epidemic situation
Exploring the city during the epidemic | The report on the development trend of China's real estate market under the epidemic situation was released
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The above represents the views of the Kerry Research Center team and is for reference only
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