Returning to nine years ago overnight, Vanke was in a hurry
On April 12, Yu Liang, chairman of Vanke, who is deep in the eye of the storm of public opinion, made a high-profile appearance in Chengdu to participate in a celebration of the 20th anniversary of the cooperation between Vanke and the Government of Singapore Investment Corporation (GIC).
After the meeting, Yu Liang specially posted a circle of friends to praise, "In the past 20 years, the market has risen and fallen. Twenty years of cooperation in a row, only like-minded people can do it". Behind this warm expression, Vanke is encountering an unprecedented storm of public opinion.
▲ (Source/Yu Liang Circle of Friends)
In just one week, Vanke successively exposed a number of negative news such as being reported by Yantai partners, Xiao Jin, the head of Vanke Jinan, being taken away by the public security organs, and rumors that the group's executives were under border control. Vanke A's share price returned to 9 years ago overnight, and the latest market value is only about 84 billion yuan.
The spearhead of many public opinions unanimously pointed to the team of professional managers that Vanke is proud of. You must know that as a "good student" in the real estate industry, the management of Vanke, headed by Yu Liang, has relied on the modern enterprise management system to make Vanke stand in the front row of the industry for a long time.
However, under this massive series of critical attacks, investors can't help but start questioning Vanke's corporate governance structure and internal control mechanism. Before the truth was clear, the panic induced by the report of the partner and other incidents continued to hang over Vanke's head.
At the critical moment, Yu Liang's statement released a positive signal to the outside world, and Vanke and international partners are still working together. However, the market's doubts about Vanke's debt solvency and rating downgrade will not be easily eliminated, and Yu Liang will have to continue to dismantle it.
01. The partner "flipped the table".
Yu Liang is a native of Suzhou, and his hometown is known for its exquisite gardens and laid-back life, but in the eyes of most people, this energetic helmsman is more in line with Shenzhen's entrepreneurial spirit.
It has been 40 years since Vanke was founded, and Yu Liang has also joined Vanke for 34 years, from a company director, to the head of finance, the president of the company, and all the way to the position of chairman of the board of directors of Vanke.
With his professional risk prediction ability, Yu Liang can always act as a "whistleblower" when the industry encounters a crisis. But what no one expected was that after Yu Liang took the helm of Vanke for 7 years, Vanke's fate came to a new crossroads.
Recently, Vanke has not only encountered liquidity pressure, but also encountered continuous bombardment from partners. The ten companies such as Yantai Bairun who came to "expose the short" are all partners who have cooperated with Vanke for many years. Among them, Yantai Bairun was established in August 2017, and in October of the same year, Yantai Chuangying Real Estate Development Co., Ltd. was established in cooperation with Vanke, with Vanke holding 51% of the shares and Yantai Bairun accounting for 30% of the shares.
Behind the dozens of companies jointly reported is a Yantai entrepreneur named Li Jun. Li Xia, a local real estate company in Yantai, told the "City Boundary" that "Li Jun is very famous in the Yantai real estate market, and many people have heard of his name, and the legends on the rivers and lakes are very powerful, but most of them have never seen him." ”
According to "City Boundary", Vanke and Li Jun have been cooperating in the development of real estate projects for nearly 10 years, and have cooperated in a total of 7 projects. The outbreak of the dispute between Vanke and Yantai partners began as early as August 2023, when Yantai Bairun and other 10 companies jointly reported Vanke for suspected misappropriation of funds, and then reported Vanke for tax evasion in January this year, and recently pointed to Yu Liang's management problems.
In the recent whistleblower letter accusing Yu Liang, the Yantai partner's questions mainly focused on three points: "accusing Yu Liang's team of setting up a shadow bank, enriching one's own pocket by engaging in financial operations in the form of extracorporeal circulation, and suspected of tax evasion." "The piles and piles all point to the problem of non-standard governance of Vanke's management.
Tracing back to the source, the cooperation model between Vanke and Yantai Bairun and other shareholders originated from the project co-investment system created by Yu Liang. In 2014, the project co-investment system established by Yu Liang brought about an unprecedented change in the identity of all Vanke employees.
Under this system, employees and enterprises are no longer just a simple employment model, but need employees to take out real money, effectively participate in the distribution of project benefits from the equity level, and share benefits and risks with the company.
It can be said that the emergence of the project co-investment system has directly pushed the management level of real estate companies to a new height, and peers have followed suit. Later, on the basis of this system, each family evolved different versions of partnerships, which also gave birth to many wealth myths.
However, when the market is going well, everyone has money to make happily together. However, once the market enters a continuous downward trend and the project faces losses, the partners who originally shared interests begin to turn against each other, and there are not a few who go to court.
Vanke, a "good student", also did not escape the curse of "collaborators defecting". Since 2021, the sales of a number of projects jointly developed by Vanke and Yantai partners have fallen short of expectations, and profits have not reached the target. Vanke issued a document mentioning that the Yantai partner had proposed a compensation claim of 1.6 billion yuan, which was later rejected.
"The local market in Yantai is very small, and the sales of real estate companies can rank in the top ten by hundreds of millions, and the scale is not large. When there was money to be made, many companies were willing to work with Vanke together, but now that there is no money to earn, internal contradictions begin to erupt. The above-mentioned Yantai real estate company said.
For Vanke, the dispute with its partners was not a major issue that needed to be resolved urgently. However, at a critical juncture when Vanke was facing debt repayment, this whistleblower letter directed at the chairman of the board of directors suddenly sounded the alarm of Vanke's public opinion.
The day after the whistleblower letter was issued, JPMorgan Chase, an internationally renowned financial services company, downgraded Vanke's A-share and H-share ratings to underweight. Since then, Vanke has been downgraded by Fitch, Standard & Poor's, and Moody's.
02. The stock price fell to a 9-year low in a row
In the face of sharp accusations from its partners, Vanke has made a brief response, insisting that the content of the report is grossly untrue and that it has initiated judicial proceedings. But the market didn't buy it, and Vanke A's share price directly hit a record decline.
Since April, Vanke A's stock price has not only fallen back to the starting point of the "Baowan Dispute" 9 years ago, but also frequently hit new lows since 2015. In the critical period of surging public opinion, the gossip related to many executives once again made investors nervous.
First, on April 10, Xiao Jin, general manager of Vanke Jinan, was taken away by the police, causing public concern about Vanke's management. Since then, rumors about Vanke's executives have intensified, and rumors have been spread one after another that Vanke executive Cai Ping went to the United States and did not return, and the group's executives were controlled by the border.
And these groundless news made Vanke's stock price untenable again. Affected by the above news, as of the close of trading on April 12, Vanke A's share price fell to 7.1 yuan per share, with a market value of only 76.7 billion yuan, which has shrunk by 80% from the market value high of 452.4 billion yuan in 2018.
Looking at the stock price trend of the collapsed Bengta, the decline in Vanke's stock price has made many people feel embarrassed. You must know that in January 2018, Vanke A's share price hit a high of 31.92 yuan, with a corresponding market value of about 452.4 billion yuan, while Vanke's H shares were about 378.6 billion yuan in the same period, with a total market value of about 831 billion yuan.
Many Vanke shareholders remember that only three years ago in 2021, some investors loudly called for "cherishing Vanke below 30 yuan". But today, that voice has long since disappeared. As of press time on April 18, the latest market value of Vanke A is 83 billion yuan, and even if the market value of Vanke H stock market is 41.8 billion yuan, the total market value of Vanke Group is 124.8 billion yuan.
This means that compared with the high point of 831 billion yuan in 2018, the market value of Vanke's A+H shares has evaporated close to 700 billion yuan. However, Vanke's share price decline is only a microcosm of the evaporation of the market value of real estate companies. Looking around the entire real estate industry, the market value of the once golden signboard "Zhaobao Wanjin" has shrunk sharply, and they have withdrawn from the market value camp of 100 billion yuan.
In today's A-share market, there is almost no real estate company with a market value of 100 billion. A bond trader who has been following Vanke for a long time told "City Boundary" that "the typical signal of a real estate company's failure is that it will default on its repayment or suspend work on a large scale, but Vanke has not yet seen this situation, but its stock price trend has entered the eve of the thunderstorm in advance, which shows the degree of panic in the market." ”
Dragged down by the stock price market, Vanke's bond prices also fluctuated abnormally, further testing the patience of creditors. It is important to know that under the continuous fluctuation of bond prices, Vanke's bond income will also continue to decline, and it may not be able to cover rigid expenses including debt.
Chen Bin, who is engaged in Vanke's bond trading, told "City Boundary" that "at present, Vanke needs to ensure the rigidity of the payment of bonds, and the public opinion of bonds is more widely disseminated, and the negative is easier to amplify, so it is very important for Vanke to ensure the stable expectation of business rhythm."
On the afternoon of April 14, in order to stabilize the falling stock price and the abnormal fluctuation of bonds, Yu Liang finally decided to fight back and held an investor exchange meeting temporarily. Regarding the report by Yantai partners, Vanke emphasized that the tax authorities had conducted an inspection of Yantai Vanke, and there was no refusal to pay the accounts, nor did it determine that Yantai Vanke had the subjective intention to evade taxes.
In order to forcefully respond to the rumor that "executives are controlled by the border", on the same day, Vanke President Zhu Jiusheng, Zhu Baoquan and other executives posted their geographical positioning in WeChat groups and circle of friends.
After the meeting, Vanke posted the minutes of the meeting on the company's official website. The article admits frankly, "From the perspective of the overall operating situation, Vanke has indeed encountered phased operational difficulties, and its liquidity is under pressure in the short term. ”
Fortunately, after responding to a number of public opinion hotspots, the market sentiment calmed down, and Vanke A's share price rose slightly. However, a single statement will not completely stabilize market expectations. As of the close at noon on April 18, Vanke A's share price fell 1.55% to 6.99 yuan.
03. Asset disposal has been more active
For a long time, Vanke has been a company driven by a sense of crisis, which is what the outside world has always recognized as Vanke. However, in the face of the continuous downward market conditions, Vanke still did not step on the brakes in time.
At this investor meeting, Vanke's management once again analyzed in detail the strategic mistakes of the past, such as "relying too much on inertia" and "making investment rash and mistakes in many cities".
Now, after a round of ups and downs and uncertainties, Vanke needs to stabilize its position and maintain the continuous stability of its operating business, and under the pressure of this round of public opinion, Vanke has also accelerated the pace of asset disposal.
Previously, Yu Liang had set a goal at the performance meeting that the company's debt scale would drop by 100 billion yuan this year and next year, and the debt risk would be substantially resolved. Liu Xiao, chief operating officer of Vanke, also revealed that Vanke's asset trading will be bigger this year, especially the bulk asset transaction.
According to the latest report of the Financial Associated Press, in response to the recent rumors about the disposal of Vanke's assets in the market, Vanke is classifying and optimizing the structure of its assets from a strategic perspective. After the completion of this process, Vanke will dispose of the assets on a case-by-case basis.
Chen Bin, a person from a financial institution, also told "City Boundary", "Vanke was very tough before, but its attitude has improved a lot recently, and the situation is expected to change quickly." In Chen Bin's view, Vanke's current crisis is a liquidity crisis and has not yet reached the stage of insolvency. At present, Vanke needs to further sort out its assets in order to better seek new loan cooperation with banks.
However, if you want to achieve the goal of 100 billion debt reduction, Yu Liang's pressure is not low. As the first company to set foot in the capital market and the second listed company on the Shenzhen Stock Exchange, Vanke has the most abundant financing means, and has previously used various tricks such as allotment of shares, issuance of convertible bonds, and additional issuance.
In recent years, Vanke has become the only two real estate companies in the industry to establish a "total to total" financing model. "Vanke's original financing model is very good, and under the total to total model, its capital volume is large and the price is low, which is much cheaper than other real estate companies. Wang Wei, a bond market person, told the "City Boundary".
However, under the pre-sale regulatory system, Vanke's financing model has changed from "aggregate-to-total" to "project-based", which also means that Vanke's cash flow cannot be withdrawn according to its debt repayment needs, and the debt repayment pressure has further increased. "For Vanke, the consequences of marginal deterioration are unbearable, and the financing and industry continue to decline, and it needs to be vigilant against the risk of accelerating the run. Wang Wei said.
Fortunately, from the perspective of the maturity date of concentrated debt, Vanke's main debt pressure is concentrated in the second and third quarters of this year, with a total amount of about 22.4 billion yuan. Regarding the specific funding arrangements for the 5.6 billion yuan of offshore bonds that will mature in May and June, Vanke previously responded on the investor platform that the company had started the relevant replacement and repayment preparations in advance.
At the previous Vanke performance meeting, Zhu Jiusheng had mentioned Vanke's two new financing channels, one is whitelist blood transfusion, and the other is operating property loans. These two new financing windows will also become an important support for Vanke.
Not only that, Vanke is also successively merging cities in key areas such as Beijing, Nanjing, and Shanghai, reorganizing management areas, and appointing new leaders. According to the "City Boundary", there has not been a significant reduction in the number of staff in the above-mentioned areas.
For a long time, Yu Liang's judgment on the scale of China's future real estate market has been the same, "9 trillion-10 trillion is the normal market size level". This means that the market has now encountered an overshoot, but the real estate industry will not disappear.
However, under a round of profound changes in the real estate industry, there will be only a few companies that can really survive. For Yu Liang, who is at the helm, he needs to find a way to lead Vanke through the storm.
In the first quarter that has just ended, the sales market of the entire real estate industry is still very strained, and Vanke is still inevitably impacted. From January to March 2024, Vanke achieved a cumulative contracted sales amount of 57.98 billion yuan, a year-on-year decrease of 42.8%.
(Wang Wei, Li Xia, and Chen Bin are pseudonyms in the article.) ）
Author | amuse
Edit | Sun Chunfang
Operations | Liu Shan