Xu Jiayin and Wang Shi: The two fates of real estate tycoons are not only divided into superiors, but also determine life and death

◎ Wisdom Valley Trend (ID: zgtrend) |  Yang Railshan Yiyi

Vanke and Evergrande, as the two companies that have successively occupied the top position in China's real estate, represent two companies with very different styles in the industry.

Today, the life circumstances of the heads of the two companies are completely different:

The spirited successor is behind bars, and the replaced have long forgotten each other.

When Evergrande took over from Vanke to the top spot, it was once thought to mark the end of an era.

Today, when Evergrande collapsed, people know what a surging industry looks like at the moment of its end.

In the program "Three's Company", which had not been discontinued that year, Ma Weidu told a story of the ultimate.

said that once he went to meet a rich man, and after he arrived, the rich man said on the phone, sorry he was working out, and he would arrive soon.

After about 5 minutes, the rich man appeared.

I saw the rich man wearing a sweatshirt and a coat on the outside, I saw his shoulders shaking, the coat fell, and someone immediately caught the coat firmly behind him.

Then the rich man stretched out two fingers, and someone handed the cigar next to him, and the rich man took a sip, put his hand on the side, and someone immediately took the cigar away.

The scene at that moment was as pompous as a movie scene, which directly made Ma Weidu laugh.

Although Ma Weidu did not explicitly say who this person was, many people believed that this person highly overlapped with the legend of "Brother Belt".

Because in the matter of, Xu Jiayin really contributed a lot of jaw-dropping famous scenes. The horse fart that surrounds him makes the flaunting of wealth of other rich people seem extremely low-key.

Within the Evergrande Group, Xu Jiayin is a unique existence.

In 2016, Evergrande held an internal basketball tournament. The Evergrande executive team and the Evergrande employee team fought in the fourth quarter, and in the end, the senior management team narrowly defeated the employee team 45-44, and Xu Jiayin alone scored 30 points and won the MVP of the game despite multiple missed shots, which became a topic of talk at that time.

Evergrande Group has been under Xu Jiayin, and almost no one dares to come out for media interviews. The three words "I demand" became Xu Jiayin's mantra at the meeting. In Evergrande's internal speeches, Xu Jiayin frequently appeared on the rostrum wearing Zhongshan costumes and delivered speeches that deeply confused the time and space of the characters.

If it is limited to the consciousness of employees, the most surprising thing about "Brother Belt" is that the horse fart around him has already flown out of Evergrande and went directly to the sky.

Wang Wenyin, known as the "world's copper king", as a partner of Xu Jiayin, once invested 5 billion yuan in Xu Jiayin.

He sent an ink treasure to Xu Jiayin, and the eight big characters hidden on his head blinded everyone's eyes:

"Xu Jiayin is outstanding and great".

Ordinary business blows between entrepreneurs are easy to understand, but it is rare to do Wang Wenyin's part, and it is difficult to imagine what kind of magic makes a famous entrepreneur achieve this level.

Not to mention a rich man like Wang Wenyin, even if Xu Jiayin met with a party member, the wording in Evergrande's internal newspaper was extremely patterned.

As a representative industry that has soared after the reform and opening up, real estate has always been at the center of the whirlpool of power and money.

Evergrande, which became the focus in the center of the whirlpool, apparently had several brushes.

At the celebration of Evergrande's 20th anniversary, Xu Jiayin recalled the success of the high-turnover and high-leverage business model:

"The first property we developed was Jinbi Garden, we didn't have money to buy land, we borrowed 5 million yuan from the bank to pay the land deposit. In the first phase, we did not have money to start construction, and we relied on the construction company to bring funds to meet the pre-sale conditions. For the company's start-up development, we opened at a loss price of 2,800 yuan per square meter, and sold out in two hours on the opening day, achieving sales of more than 80 million yuan, and obtained the company's very valuable first pot of gold. ”

High leverage itself is not unusual, Chinese mainland the rapid progress of the head real estate enterprises, nine out of ten comes from this.

As a business option, the highly leveraged model is prone to cash flow risks once the capital chain is broken.

In fact, Xu Jiayin, who started with a high-leverage model, has suffered from its backlash.

In 2008, coinciding with the world financial crisis, Evergrande, which has always regarded high turnover borrowing as the law of growth, ran into trouble. That year, Evergrande's first IPO failed and the capital chain broke.

In the following three months, Xu Jiayin looked for money in Hong Kong almost every day, almost said to work there, accompanied Zheng Yutong father and son, one of the four major families in Hong Kong, to play cards, during that time in Hong Kong, Xu Jiayin lost four or five pounds.

Later, Zheng Yutong injected US$150 million into Evergrande through its subsidiary Chow Tai Fook, and six institutions including Deutsche Bank invested US$356 million, bringing Evergrande back to life.

It stands to reason that Xu Jiayin's Evergrande suffered losses, but the Xu family not only did not converge after that, but spread the stall bigger and bigger after being reborn, and a series of behaviors in the later period were bold to an incredible extent:

First, issue high-yield bonds in US dollars, and then buy them with their own overseas dollar assets to earn their own company's money. And because it is an external debt, it is the highest priority to be repaid.

Second, Xu Jiayin's personal shareholding accounts for about 70% of Evergrande, so he chooses to share all the company's profits with dividends, that is, to himself. Since Evergrande was listed in November 2009, except for no cash dividends after the thunderstorm in 2021, there have been cash dividends in other years, with a cumulative cash dividend of 11 times, and about 50 billion yuan has been distributed from Evergrande.

Third, build cars and respond to the national new energy vehicle strategy. Xu Jiayin gave the 15-character motto of "buy, buy, combine, circle, big and good", Evergrande has purchased a series of assets in the new energy industry chain globally, and smashed 47.4 billion yuan in three years from 2018 to 2020 alone. In this way, a large amount of money can be transferred to overseas companies controlled by "own people" in the form of investment and trade.

Fourth, commercial bills and Evergrande wealth. The above methods basically squeeze the available cash almost, and the liquidity is supplemented by commercial bills and Evergrande wealth digging holes to absorb gold. Evergrande also has a lot of garbage real estate in third- and fourth-tier cities. In the end, even if it is liquidated, these garbage properties can be used to offset debts.

Such a series of tumultuous operations may not be explained by gambling and guts.

Unlike many well-known domestic entrepreneurs, Xu Jiayin has climbed the Tiananmen Tower twice, in October 2019 and July 2021.

In 2021, Evergrande has begun to fall into the quagmire of overdue commercial bills and debt defaults.

In early June 2021, Evergrande's Yuelongtai project in Xuchang, Henan Province was stopped, and migrant workers bargained for wages, and the partners said that Evergrande owed more than 20 million yuan. On June 24, Evergrande was sued by Yingkou Coastal Bank over a loan dispute. On June 29, Evergrande's long-term partner Sankeshu Paint Company issued an announcement to collect payments, disclosing that Evergrande's overdue notes amounted to 51.37 million yuan.

However, these "episodes" at that time did not affect Xu Jiayin's appearance in the headlines of major newspapers in the slightest.

On May 7, 2015, international rating agency Standard & Poor's downgraded Evergrande's long-term corporate credit rating from "BB-" to "B+". As a result, the three major domestic rating agencies, China Chengxin International, Dagong International and United Ratings, released Evergrande Real Estate Credit Rating Reports all gave Evergrande the highest credit rating AAA, and the rating outlook was stable.

It should be known that the AAA rating is the highest registration assessment made by the credit evaluation agency on the solvency of the debtor and the bonds it issued, indicating that the debtor has a very strong ability to repay the principal and interest, and there is almost no risk in purchasing bonds issued by such companies.

According to the past, only the giants of central enterprises usually received such a rating, and even the People's Daily exclaimed it as "the first in China" in its report at the time.

Some things are not weighed four or two, and they cannot be stopped if they are weighed a thousand pounds.

Xu Jiayin's mess today obviously cannot be attributed to him alone.

Wang Shi, who was also once a leader in China's real estate industry, but is now on the other side, is a different style of painting.

Following the compulsory supervision of Xu Jiayin and his second son on the eve of the Mid-Autumn Festival, and shivering about how to spend this autumn, Wang Shi, who was once known as the "godfather of real estate", also quietly made the headlines of the Japanese media.

Not long ago, a number of Japanese media reported that Wang Shi, who is 72 years old this year, moved to Japan with his 42-year-old wife Tian Pujun.

In early April this year, the two also held a "Sino-Japanese Entrepreneur Exchange Feast" in their private names at the Roppongi Hotel Minato-ku, Tokyo.

There were many Japanese political and business celebrities at the venue, and it is reported that the participation fee of Chinese in Japan alone is as high as 7.7 million yen (about 370,000 yuan) per person.

According to the Japanese media, this gathering is slightly like a "housewarming banquet", focusing on letting Wang Shi and his wife build a network of contacts in Japan to prepare for a long-term settlement in Japan in the future.

No matter what the truth is, it does not hinder people's feelings about Wang Shi after the tide recedes.

In the past few years, if anyone mentioned the "first housing enterprise" in China, many people subconsciously reacted to Evergrande, but the first to get this honor was actually Vanke.

Looking back at Vanke's development history, it is not easy to get such achievements.

In 1984, 33-year-old Wang Shi founded Vanke, which first relied on import and export trade; In 1988, he led Vanke to enter the real estate industry, becoming one of the earliest enterprises engaged in the real estate industry in China.

But no one could have imagined that Wang Shi at that time had formulated a principle for himself and Vanke that even seems inconceivable today, that is, "Vanke does not pay bribes" written by Wang Shi in his autobiography.

Because of this, there are also rumors that when Vanke entered a certain city in the early years, it had almost no chance to get a high-quality lot in the city center, but could only buy some "scraps" in remote suburbs at a high price for development.

It is often ridiculed by the outside world as a "developer of urban-rural areas".

It is said that the location is enough to determine the life and death of a real estate company, and under the situation at that time, Wang Shi only polished the TOD operation mode of real estate property services, community construction, and commercial introduction into the residential field, which seemed to be very novel in the early 90s, and led Vanke to the forefront of the industry with weakness and strength.

In 1998, Vanke, "only 10 years old", became the largest real estate company among China's listed companies.

But Wang Shi's astonishing move goes far beyond that.

In 1999, Wang Shi resigned as general manager of Vanke, retaining only the position of chairman, insisting on establishing a complete modern enterprise system for the Vanke Group, which he founded himself.

Wang Shi explained in a later interview:

"The modern enterprise system is a product of Western civilization, and there are two ways for Chinese enterprises to establish a modern enterprise system. One is to combine Lai Ism with traditional Chinese culture, which is the mainstream practice in modern times. My thinking is that since the modern enterprise system is a product of Western civilization, Vanke will use it and copy it completely, rather than combine it. ”

Therefore, in the management of most contemporary Chinese enterprises, the system set up is basically wrong with the bottom and the people, and the power of the top often exceeds the system;

Vanke is rare to achieve the system above people, and it was started by Wang Shi himself.

This was seen as early as 88 when Vanke carried out its first shareholding system reform. At that time, Wang Shi voluntarily gave up about 10% of his personal shares as a company founder, and continued to manage Vanke only as a professional manager.

It is rare for a private enterprise that has grown up completely from the domestic soil to achieve a complete separation of management and management rights at the beginning of the start-up.

Vanke's professional manager culture has since taken root.

Source: Phoenix Net

As for why give up individual shares? Wang Shi gave three reasons:

1. Hate the image of the nouveau riche; 2. The family does not have the DNA to control wealth; 3. "Suffering from inequality without suffering from the few" is a deep-rooted tradition in Chinese society, and I don't want to put myself at a disadvantage.

Huang Qiuli, the chief writer of China Entrepreneur magazine, once described Wang Shi's behavior as a man who was wary of Eastern authority.

"Oriental authority is a specialty of traditional Chinese culture, and organizations rely heavily on authority figures, and once there are no authority figures, they will decline. Such stories have been repeated again and again in Chinese history. In order to avoid becoming such an authority, Wang Shi ended this possibility in an authoritative way: he handed over the management of Vanke early when he was less than 50 years old, choosing to believe in the system he established and the team he cultivated. “

Another "rule" that Wang Shi set for Vanke is also very famous: do not do more than 25% of profits. But the real estate industry was popular at the time: less than 40% of the profit is not done.

However, the business that only made 25% of the profit did not prevent Vanke from "occupying" the seat of the head real estate company. According to the systematic statistics of real estate enterprises by a third-party organization in 2008, in the past 15 years as of 2022, Vanke has ranked first in the sales list for 8 years, and has never fallen out of the top three positions.

On August 30, Vanke announced its 2023 interim report, saying that in the first half of the year, Vanke achieved operating income of 200.89 billion yuan, net profit of 9.87 billion yuan, the proportion of interest-bearing liabilities continued to decline, and the proportion of short-term debt fell to a historical low of 14.2%. Operating net cash flow was positive for 14 consecutive years.

Obviously, in the real estate industry, Xu Jiayin and Wang Shi can be described as two very different representatives.

The two are very different in terms of business management, style and life circumstances. Legend has it that the two characters once had a brief intersection.

In 2008, when Evergrande's first IPO failed, Xu Jiayin was said to have visited Vanke for help, but Wang Shi did not lend Xu Jiayin.

Grass snake gray line, thousands of miles of veins.

Now it seems that Wang Shi's choice at that time may become a footnote to the situation of the two today:

A song and dance troupe that once sat on thousands of people in Shenzhen Bay is always surrounded by thousands of people, enjoying the nourishment of power but not ending well; One resolutely stays away from the foundation he once laid down, retires, returns his attention from career to personal, and moves to Tokyo Bay.

In 2017, Wang Shi, who retired successfully, resigned as chairman of Vanke and received a pension of about 10 million yuan from Vanke every year thereafter. Also in the same year, Evergrande overwhelmed Vanke with an annual sales amount of 373.1 billion yuan, and since then it has become the first brother of Chinese real estate that no one can rob it, and Xu Jiayin has also become China's richest man with a net worth of 290 billion yuan.

At that time, "Brother Belt" Xu Jiayin was very happy, and loudly announced at the performance meeting that Evergrande's first task next was to continue to expand the scale and rush forward to increase leverage;

On the other hand, Yu Liang, Vanke's successor, cautiously identified the "cash flow-based" business philosophy as one of Vanke's highest strategic policies, which has not changed so far.

Once upon a time, there was a "Vanke curse" circulating in the real estate circle - whoever threatens or vows to surpass Vanke will be doomed, and the light will return to the original point, and the worst will be destroyed.

At that time, Xu Jiayin naturally did not believe it, but it did not prevent this bullet from hitting his eyebrows after many years.

Resources:

1. Gravel Business Review: "These 80 business thoughts of Wang Shi explain why Vanke is "the leftover is king"? 》          

2. Deep Blue Finance: "Evergrande's Past: When Rating Lowered Abroad, the Three Major Domestic Institutions Gave the Highest Rating"      

3. China Entrepreneur Magazine: "The Wang Shi I Know: I Plan to Plant Trees in the Gobi at the Age of 70"          

4. Starting point finance: "Counting King Stones in the World"

5. Practical Finance: "Ups and Downs|A Generation of Heroes Xu Jiayin"