In the context of more private real estate companies gradually fading out of the market, Dahua Group, which has been low-key for many years, has "suddenly changed its painting style" to high turnover, and has laid out many cities across the country in one go.
China Housing Daily reporter Xu Qian reported from Beijing
Within a week, Dahua Group, a mysterious private enterprise from Shanghai, made two large-scale land acquisitions in succession.
On April 23, Dahua Group won two plots of land in the "Urban Village" project of Kangjia Village, Miaohang Town, Baoshan District, Shanghai, with a total transaction price of 3.5114 billion yuan and a transaction floor price of 33,300 yuan per square meter.
There is almost no suspense about taking the land this time. As early as the beginning of September last year, one of the plots in Miaohang Town, Baoshan District, was publicized in the design plan, and the project consulting unit at that time wrote "Shanghai Huahang Real Estate Development Co., Ltd.", that is, a subsidiary of Dahua Group. The market speculates that the 4th phase of Dahua Park City is coming.
A week ago, Dahua Group won a residential land in Minhang District, Shanghai for 2.555 billion yuan, with a floor price of 42,300 yuan per square meter and a premium rate of 10%. More than a month ago, Dahua Group also won a commercial and residential land in Xi'an, with a reserve price of 1.15 billion yuan. So far, Dahua Group has acquired more than 7.2 billion yuan of land in Shanghai and Xi'an this year. In the first quarter, Dahua Group's cumulative sales amounted to 4.63 billion yuan, ranking 46th in the country. Spending on land acquisition far exceeds sales.
In recent years, in the context of more private real estate companies gradually fading out of the market, Dahua Group, which has been low-key for many years, has "suddenly changed its painting style" to high turnover, and has laid out many cities across the country in one go. From Guangzhou to Beijing, from Hangzhou to Kunming, Dahua's territory continues to expand.
"Dahua Group is from the old reform business in Shanghai, and it is very handy in the old reform business. There is a plate called Dahua plate in Baoshan District, Shanghai, which can be imagined how strong the energy behind Dahua is. A local business person in Shanghai said.
A reporter from China Real Estate News called the investment and development department of Dahua Group about the company's development and future layout plan, but the other party refused on the grounds that "the market situation is not good and sensitive, and he cannot be interviewed". Subsequently, the reporter sent an interview outline to the media liaison department of Dahua Group, and the other party said that "the company has always been relatively low-key, and there is no relevant information to be announced".
Mysterious renovationist expert
Headquartered at No. 698 Hualing Road in Dachang Town, Baoshan District, Shanghai, Dahua Group is a veteran developer in Shanghai, but its management model has the characteristics of a "Fujian" real estate company.
The reporter checked the enterprise and found that among the top five shareholders of Dahua Group, the ultimate beneficial shares of Chairman Jin Huiming were 40.13%, the shares held by director Jin Ling were 14.87%, and the shares held by Vice Chairman Jin Jianming were 10.13%. Jin Ling is the daughter of Jin Hye-myung, and Kim Jian-ming is Kim Hye-myung's own brother. Dahua's fourth largest shareholder is the Dachang Town People's Government, with a final income of 10%, and the fifth largest shareholder, Jin Yi, has a final income of 6.08%.
Founded in 1988, Dahua Group is one of the first batch of development enterprises in China with national first-class qualification for real estate development, and its predecessor is Dachang Township, Baoshan District, Shanghai, a town-run enterprise - Shanghai Baoshan District Dachang Township Commercial Housing Development Company.
In 1992, in order to cooperate with the reform of the housing system, the government of Dachang Town, Baoshan District, Shanghai formally established Dachang Real Estate Development and Management Company on the basis of the original Dachang Township Commercial Housing Development Company, with a registered capital of 15 million yuan and a collective enterprise. In 1994, Jin Huiming, who was in his 40s, served as the deputy mayor of Dachang Town, Baoshan District, the secretary of the general party branch of Xinhua Village, and the general manager of Dachang Real Estate Development and Management Company. In 1995, Jin Huiming became the legal representative of Dachang Real Estate Development and Management Company.
In 1998, the state launched the "Housing Reform" program. In June of this year, Dachang Real Estate Development and Management Company changed its name to Dahua Group, and the nature of the enterprise was changed from collective to limited liability, with Shanghai Baoshan District Dachang Town Economic Association holding 85% of the shares, Shanghai Huaxiang Real Estate Development Co., Ltd., a subsidiary of Shanghai Shenxin Group, a village-run enterprise in Xinhua Village, holding 15% of the shares, and Jin Huiming serving as the president of Dahua Group. According to the information, the chairman of Shanghai Shenxin Group is Jin Huiming.
At the end of 2002, in order to adapt to the market economy situation, Dahua Group carried out enterprise restructuring. Shanghai Baoshan District Dachang Town Economic Association will hold 75% of the equity of Dahua Group, and Shanghai Huaxiang Real Estate Development Co., Ltd. will hold 15% of the equity of Dahua Group, to Jin Huiming and other 34 natural person shareholders. Among them, Jin Huiming purchased more than 48% of the shares for 52.82 million yuan, and the company's total assets were 1.37 billion yuan and net assets were 260 million yuan, and the remaining 10% of the shares were still held by Dachang Town Economic Association. So far, the attribute of Dahua Group has changed from the surname "public" to the surname "private". Since this year, Dahua Group has begun to make a nationwide layout, and has successively entered Shenyang, Dalian, Nanjing, Wuhan and other places.
In order to reduce the degree of attention, in 2005, Jin Huiming and other 34 natural person shareholders transferred 90% of the shares of Dahua Group to 6 companies, namely Shanghai Huaqiang Investment, Shanghai Huaxiu Investment, Shanghai Huaheming Industry, Shanghai Huahehui Industry, Shanghai Huahe Ning Industry, Shanghai Huaheshun Industry, which currently hold 30%, 26%, 13%, 8.39%, 8.39%, and 4.19% respectively, and the first 5 companies are controlled by Jin Huiming's family. Jin Huiming also appeared on the Forbes China Rich List that year, ranking 36th with a net worth of 2.7 billion yuan.
In 2007, Dahua Group's total assets exceeded 15 billion yuan, making it the second largest real estate company in Shanghai. Dahua Group attempted to achieve a backdoor listing on the A-share market by acquiring a 40.67% stake in Dalian Jinniu, but ultimately failed. Since then, they have fallen silent, and they have rarely even cooperated with other real estate companies. In 2009, Dahua Group's sales exceeded 10 billion yuan, but since then it has been hovering on the 10 billion yuan line for many years.
Before 2018, Dahua Group basically focused on the development of the Shanghai market, until it was overtaken by latecomers and began to catch up. In 2018, it entered 6 cities of Guangzhou, Huizhou, Xuzhou, Kunming, Dali and Dezhou, with an additional land value of 19.5 billion yuan, and in 2019, it entered Jiangmen in Guangdong, Dezhou, Xuzhou, Suzhou, Xianyang, Tianjin, Lanzhou and other cities, with a total land acquisition of 32.7 billion yuan, a year-on-year increase of 289%, and sales reached 34.38 billion yuan, rising from about 100 to 73 in the industry.
Unlike most private real estate companies, Dahua Group has been inclined to renovate projects and large-scale community development since its first project in Shanghai, Dahua Community, and has developed large-scale community projects such as Dahua Community, Dahua Jinxiu Huacheng, and Dachang Old Town Renovation Community.
In January 2020, UOB disclosed that it had secured 15 urban renewal projects in five cities in the Greater Bay Area (Guangzhou, Huizhou, Jiangmen, Zhuhai and Foshan). In 2020, Dahua Group added 72 billion yuan in land value, ranking 51st in the land acquisition list. In 2021, Dahua Group ranked 27th with an equity land acquisition amount of 26 billion yuan, and its attributable sales volume was 57.07 billion yuan, ranking 51st among the top 100 real estate companies.
The total debt exceeds 150 billion yuan
Since 2022, the land market has become deserted. Some of the former big reformers in South China are busy paying off their debts, while Dahua Group is still actively acquiring land.
In 2022, Dahua Group first spent 4.88 billion yuan to bid for the land plot in Anting Town, Jiading and Gucun in Baoshan, and then won the Zhucun land plot in Zengcheng, Guangzhou for 1.328 billion yuan, and in March 2023, Dahua Group won the popular land plot in Zhuxinzhuang, Beijing, for 1.2995 billion yuan, entering the Beijing market for the first time.
In April 2024, Dahua Group acquired land in Shanghai twice, with a total amount of more than 6 billion yuan. Coupled with the Xi'an land plot won a month ago, the amount of land acquired in the first four months has exceeded 7.2 billion yuan. Last year, Dahua Group acquired 6.9 billion yuan of land for equity, and 9.5 billion yuan in 2022.
At present, Dahua Group has covered the Yangtze River Delta, Bohai Rim, Midwest, Pearl River Delta and South China, and has entered cities including Shanghai, Nanjing, Nantong, Suzhou, Hangzhou, Dalian, Jinan, Guangzhou, Foshan, Huizhou, Haikou and Kunming, as well as overseas cities such as Sydney and Melbourne.
Where does the Dahua Group, which has acquired land on a large scale and has a number of large-scale renovation projects, get its funds from? Dahua insiders once said: "Dahua mainly owns its own funds, and even the financing is mainly bank loans, with low interest rates. According to the enterprise investigation, the current scale of Dahua Group's existing bonds is 2.32 billion yuan, and the number of bonds is 4.
One factor in Dahua's style change in recent years is that his daughter, Jin Ling, has taken over the management of the company as the old chairman Kim Hye Myung has become a hero. Jin Ling is the person who has the highest proportion of ultimate beneficial shares in the company except for Jin Huiming.
According to limited information, after graduating from Shanghai University, Jin Ling came to Dahua Group in 2001 and successively worked in the investment and development department, sales department, and group marketing center.
Behind the rapid expansion, Dahua Group is facing multiple challenges. According to the annual bond report, in 2017~2020, Dahua Group's total liabilities soared, with 43.95 billion yuan, 63.26 billion yuan, 92.74 billion yuan, and 121.29 billion yuan respectively, with a compound annual growth rate of 40.27%. As of the end of 2022, Dahua Group's total liabilities were 159.4 billion yuan, with a total debt ratio of 78.17%, and total interest-bearing liabilities were 46.757 billion yuan, of which bank loans were 41.695 billion yuan, accounting for 89%.
UOB Group is also facing sales pressure. In 2022, Dahua Group's sales will be 36.1 billion yuan, down 36% year-on-year, ranking 57th in the top 100 list, and in 2023, its sales will be 38.57 billion yuan, ranking 44th. According to people familiar with the matter, many of Dahua Group's profits in Shanghai have been fed back to companies in other regions, and the company's cash flow is under pressure.
In 2021, Jin Huiming ranked 475th on the Hurun Report with a wealth of 15 billion yuan. In March 2023, Jin Huiming ranked 1782nd on the "2023 Hurun Global Rich List" with a wealth of 13 billion yuan. In March 2024, Jin Huiming ranked 2038th on the "2024 Hurun Global Rich List" with a wealth of 12 billion yuan. In one year, Jin Huiming's wealth shrank by 1 billion yuan.