Reporter Chen Ting and Zhao Yi report from Shenzhen
The reporter of "China Business Daily" learned that on April 30, Vanke (000002. SZ) held its 2023 Annual General Meeting of Shareholders. Yu Liang, Chairman of the Board of Directors of Vanke, responded to Vanke's stock price performance and the progress of the package of stable business plans that the outside world was concerned about.
Regarding the fluctuation of Vanke's stock price that investors are concerned about, Yu Liang said: "The current performance of the stock price will definitely not meet the requirements of shareholders, and we fully accept the criticism of shareholders, and we are currently formulating a plan to increase the stock holdings of the management team." "Since the beginning of this year, Vanke's share price has fluctuated and fallen. As of the close of trading on April 30, Vanke closed at 7.41 yuan per share, down 1.98%.
In Yu Liang's view, the most important thing to boost the stock price is to do a good job in the company, and seek the long-term healthy development of the company by reducing risks and improving fundamentals. In this regard, Vanke has formulated a package plan.
It is worth noting that as the first real estate company in the industry to realize the need for transformation and development, Vanke announced this time that it will withdraw from other businesses and clean up and transfer financial investments from non-main businesses in addition to the three main businesses of comprehensive residential/community development, property services and rental apartments. In addition, Yu Liang said that Vanke's total interest-paying liabilities will be reduced by more than half in the next five years.
Vanke's management previously pointed out in the minutes of its institutional research meeting that Vanke is currently experiencing phased operational difficulties, and its liquidity is under pressure in the short term. At the end of March, Yu Liang said at the performance meeting that Vanke would reduce interest-paying debt by more than 100 billion yuan in the next two years to ensure the company's safety.
Develop a "slimming and fitness" program
At the shareholders' meeting, Vanke's management's views on stock price fluctuations attracted great attention from investors. Since the beginning of this year, Vanke's share price has continued to refresh its all-time lows. On April 26, Vanke's share price fell to 6.45 yuan per share intraday, a new low in the past five years.
Yu Liang said: "The fate of the management team is tied to the fate of the company, and since becoming a director of Vanke in 1994, they have only bought [the company's shares] and never sold them in the past 30 years. According to Yu Liang, Vanke is also currently formulating a plan to increase its shareholdings.
In order to boost the stock price, Yu Liang said: "The company has formulated a package plan for weight loss and fitness, coordinated debt reduction and high-quality development, and focused on the three main businesses of comprehensive residential/community development, property services and rental apartments in the future, so that the company can get back on a sustainable track and continue to lead in the new stage of real estate development." ”
It is reported that the package proposed by Yu Liang mainly includes two stages. The first stage is to "firmly slim down" and adjust the financing model to reduce risks. Specifically, it will focus on the three main businesses of comprehensive residential/community development, property services and rental apartments, withdraw from other businesses, clean up and transfer financial investments in non-main businesses, resolutely promote commercial and office and other bulk asset transactions, and plan to complete the transaction scale of 20 billion yuan per year, and take the initiative to complete the transformation of financing model. In the second stage, Vanke will focus on its main business, refine its business, and become a benchmark for products and services in the industry.
Yu Liang said: "The package is not only a contraction and pressure drop plan, but also an enterprising plan. The first stage of slimming is to gather resources and lay the foundation for the second stage. For the anchored three advantageous businesses, Vanke will concentrate resources and management efforts to become stronger and maintain a leading position. ”
Regarding the three main businesses to focus on, Yu Liang believes that Vanke has more advantages in these businesses. "Residential and property services are the starting point of Vanke's development, and it has established comprehensive competitiveness, and the scale and operational efficiency of rental housing have also reached the first place in the industry. I believe that after the focus, the three main businesses will develop better. ”
Respond to the progress of the financing
Yu Liang said that the package formulated by Vanke mainly achieves the three major purposes of "debt reduction", financing model transformation, and focus on the main business. Specifically, Vanke will reduce its interest-paying debts by more than RMB100 billion in the next two years, and reduce the total scale of interest-paying liabilities by more than half in the next five years; gradually shift its financing model from unified borrowing and repayment and main credit to project and asset credit; free up limited resources and strengthen its three main businesses: comprehensive residential/community development, property services, and rental apartments.
Previously, Zhu Jiusheng, president of Vanke, publicly stated that the current challenges faced by Vanke mainly come from three aspects: first, the company's development business income and expenditure are unbalanced in the stage of the industry's sharp downturn; second, Vanke's financing model has shifted from the past "total to total" to the project system, and the company needs to adapt; third, the operating business income is still in a state of climbing, and there is a scissors difference with the bank loan interest rate.
At the shareholders' meeting, Zhu Jiusheng said that there are three main points on how to deal with the above challenges: first, the implementation of the real estate financing coordination mechanism ("white list"), which can be reported and exhausted; second, vigorously promote operating property loans, which can not only solve the historical stock problem, but also obtain new liquidity in stages; and third, obtain syndicated loans to improve the efficiency of bank-enterprise cooperation. According to Zhu Jiusheng, at present, 59 projects of Vanke have applied to be included in the "white list", and the company is actively promoting the implementation of syndicated loans.
According to the annual report, as of the end of 2023, Vanke's total liabilities were about 1.1 trillion yuan, with total interest-bearing liabilities of 320.05 billion yuan, accounting for 21.3% of total assets, of which 19.5% were interest-bearing liabilities due within one year and 80.5% were interest-bearing liabilities for more than one year. Among the interest-bearing liabilities, domestic liabilities accounted for 80.3% and overseas liabilities accounted for 19.7%. Since the beginning of this year, Vanke has made new financing withdrawals of 16.8 billion yuan, and the average cost of new domestic financing is 3.33%.
Zhu Jiusheng said that thanks to the bank's support and its own efforts, Vanke's financing has gradually improved, and he is full of confidence in the follow-up progress.
At the shareholders' meeting, Yu Liang also expressed his views on the industry situation. Yu Liang believes that the main content of high-quality real estate development in the future is good houses, good communities and good services. The three major businesses that Vanke focuses on are market prospects and social needs.
"The industry has undergone profound adjustments to a new stage of development, which is bound to be a process of 'slimming down and fitness', which is by no means easy, but the result is a path to healthier and high-quality development. Vanke's current pressure is phased, and the company will achieve initial results in the next two years, and only by coordinating debt reduction and high-quality development can the company achieve sustainable development. Vanke's management team has never changed the cherishing and attaching importance to its professional reputation, and will continue to introspect and redouble its efforts. Yu Liang said.
(Editor: Zhao Yi Review: Tong Haihua Proofreader: Yan Jingning)