In about 2 years, Vanke will become a "new Vanke".
At Vanke's shareholders' meeting on April 30, Yu Liang said:
"The pressure on Vanke today is phased.
With the profound adjustment of the industry, Vanke's current "slimming and fitness" is very painful and not easy, just like weight loss, but its results will lead to a stage of healthier and more quality development.
I believe that with the support of shareholders and all sectors of society, and with Vanke's own efforts, Vanke will achieve initial results in the next two years. ”
01
Vanke's "2 unexpected strengths" at the moment
At the moment, Vanke is under a lot of pressure.
S&P Global Ratings said: "If sales fall by another 30%, the solvency of all types of ownership sample real estate companies will be insufficient. ”
Obviously, he is alluding to Vanke and Gemdale, pointing to stark!
S&P emphasized: "In the environment of sluggish commercial housing sales and tight financing conditions, the general liquidity of real estate companies continues to tighten, and it may be difficult for state-owned background real estate companies to 'stand alone'. ”
In fact, the latest Vanke's sales data is still very high!
As of January ~ April 2024, Vanke's cumulative sales were 77.9 billion, down 41.6% year-on-year from the same period in 2023, 43.6% year-on-year from the same period in 2022, and 66.2% from the same period in 2021.
In a single month, Vanke's monthly sales in April were 19.9 billion, down 38.9% year-on-year from the same period in 2023.
Both are 40% "super down", too much chill!
But Vanke also has two points of praise.
First, the sales of other real estate companies tend to plummet after the "thunder" turmoil, far below the industry average, but Vanke was still able to achieve sales of about 20 billion yuan in April after this round of "thunderstorm huge public opinion turmoil", which is commendable and worthy of praise.
Second, Vanke actually recently acquired land.
On April 28, two days before the shareholders' meeting, Vanke won two pieces of land in Shenyang, although the transaction amount was only 490 million, which seems to mean that Vanke still has the ability to add "investment".
Of course, in Lao Pan's view, Vanke's acquisition of land is more symbolic and confident.
Under the high debt pressure and the sharp drop in sales, Vanke's short-term large-scale or even moderate land acquisition will also be highly pressured, and this time Vanke's "490 million" land acquisition 2 days before the 430 shareholders' meeting is more to send a signal and confidence to the outside world and shareholders.
That is, Vanke is basically fine, and it is far from a desperate situation!
Staying alive "Strategy 1"
Strong Slimming: Version 2.0 of Convergence Focus is here
Convergence and focus, these 4 words, everyone is familiar with them.
In 2019, after Vanke proposed to survive in 2018, Yu Liang put forward the nine-character policy of "consolidating the fundamentals and converging and focusing".
At that time, the convergence focus expressed the qualitative connotation of focusing on the basic business of "real estate development" and exploring the investment layout of runaway diversification.
But when the time comes to 2024, the industry and Vanke have undergone great changes.
At present, today Yu Liang once again staged a deep upgrade of "convergence focus".
Lao Pan called it version 2.0 of Deep Water.
That is, directly chopping and chopping, reducing and reducing, more thorough contraction, and more focus.
After this battle, Vanke truly "made industrial trade-offs and truly focused on its main business" this time.
1. The change of the main business: one basic plate to three main businesses
Unlike in the past, when the basic market was "real estate development", this time, the focus on the main business is a "new version".
That is, Vanke's basic market and main business have changed.
Began to focus on the main business of "single real estate development" in the past
Into
"Integrated residential area, property service and rental housing" are the three new main businesses.
Why make a strong adjustment?
Yu Liang reflected: "In the past, Vanke did more diversified businesses and more transformation explorations, although most of them did well, but Vanke's resources were limited. Part of the pressure on Vanke today comes from using the funds from its development business for long-term operations (short-term and long-term use). Now it seems that we do not have enough resources to take care of all the business, so we have to make (industry) trade-offs at this time. ”
It should be said that after five years of great development after 2019, Vanke Service and Vanke Leasing have become the first in the industry in terms of quantity and scale, and at the same time, the three main business industry influence, operating ability and efficiency leadership and other "qualitative" capabilities have formed a double leading position of "quantity and quality" as a whole. This has the comprehensive basic strength of property and long-term leasing to become Vanke's new main business.
For example, Vanke Property Services was 33.4 billion last year, which is large enough, and the growth rate of 10.2% is also good.
Similarly, Vanke Leasing, both in terms of scale and operating efficiency, is second to none in China!
2. There are 3 criteria for industry trade-offs.
Why choose these three businesses?
This is because Vanke considers that these three businesses have three things in common:
First, there is demand from the society, second, the market has prospects, and third, Vanke has advantages.
If there is demand and prospects in the market, and Vanke has no advantage, it is not something that Vanke can do.
At present, from the perspective of social demand and market prospects, even in today's property market, there is still a lot of room for development in comprehensive residential areas.
For example, there are projects in Shanghai that sell more than 19 billion a day, which shows that the demand still exists, indicating that there is still a lot of room for Chinese to pursue a better life and improve living standards.
Since 2023, it may be the year with the fastest progress in China's real estate industry.
It should be said that in the past era of purchase and price restrictions, people were not motivated to pursue good products and good houses.
But today, in the face of competition, real estate companies are rolling up products, and Vanke even found that the real estate industry will roll out a "new product" every 3 or 4 months, which also shows that the needs of Chinese people to improve their living standards have not been fully met.
For example, in the past, it was said that there was a surplus of one house per capita? At present, this is completely untenable, because people's demand for improvement still exists. The improvement is not necessarily a luxury residence, but more in line with today's needs.
Why did you choose rental housing as your second main business?
Yu Liang said: "Today, with the operation of China's urbanization, many cities with large populations still have a steady stream of population inflow, and these new people often start from renting, and they need safe, stable and comfortable rental houses for them." Therefore, this demand exists, coupled with the support and guidance of both rental and purchase policies, so the prospects are also very good. ”
Property service is Vanke's time-honored brand.
Today, there are only good products, and without property services, I am afraid that this product will not be very popular, so now is the time to compete for the joint force of "product power and service power".
For example, if the current electric vehicle does not have an automatic driving intelligent system, I am afraid that its competitiveness is not enough, so in addition to a beautiful appearance and good performance, a car also needs to have an intelligent system to match it better.
The future of property services is also huge, even if the growth rate of real estate development business is down, but the scale of property stock is very large, and the future property will develop and grow like a snowball.
Based on this, Vanke chose these three new core businesses.
3. Vanke has a "competitive advantage" in the new three main businesses
For the choice of main business, whether Vanke has an "advantage" is also very important.
Yu Liang said: "If the industry has demand and market prospects, and Vanke has no advantage, it is not Vanke's dish, and it has nothing to do with Vanke."
In Yu Liang's view, Vanke has a distinct competitive advantage in the newly selected "three main businesses".
First, the "dominant force" of integrated settlements
Vanke can have today, and the starting point of development is good products and services.
Vanke 34 years ago (1990) to develop the first real estate, Shenzhen Tianjing Garden, this project products and services Vanke are doing very well, 34 years ago there was a swimming pool, at the same time Vanke's first property service was born there, this community is still popular with many people today, still constantly glowing with new opportunities, there is no sense of dilapidation.
This means that when good products and good services are combined, there are more opportunities.
In this regard, Vanke has the genes of good products and good services.
In addition to genes, Vanke established a development and operation headquarters in 2022. The product development capabilities and R&D capabilities that were scattered in various first-line companies in the past are managed as a whole.
How to do as small as a storage space, how to improve the cost performance and configuration of each residential module, Vanke has been greatly optimized.
What is cost-effective improvement?
For example, Vanke Jiaxing has a demonstration base, and Vanke has a Xiaoice cabinet in the cabinet behind the bathroom makeup mirror, which is very popular. The core is because many women have lipstick, etc., need to use a small Xiaoice box.
For example, Vanke has a special kitchen air conditioner in the kitchen, which is very distracting.
In fact, where is the hottest part of the house and the weakest air conditioner? The temperature is very high when you want to stir-fry in the kitchen, but traditionally, there are very few air conditioners in the kitchen, so Vanke adds a few hundred yuan to install a special kitchen air conditioner, and the whole becomes very comfortable.
The improvement of good functions, good configuration and cost-effectiveness, as small as a module, as large as an urban renewal and TOD rail property, and more complex is the ideal place for Vanke in Jiading in Shanghai, which is a vibrant, low-carbon, intelligent and comprehensive future urban community...... Vanke, big or small, has a solution.
Therefore, Yu Liang said: "In terms of comprehensive residential development, Vanke's competitiveness is still relatively comprehensive. ”
Secondly, in the era of simultaneous hire and purchase, Vanke is the first developer to respond and do the best.
For example, Vanke's leasing business is second to none in terms of scale and operational efficiency, especially with the listing of Vanke Zhongjin SCPI REITs, it is believed that long-term rental apartment REITs will also appear this year, which will also bring new opportunities to Vanke.
Finally, Vanke's service is a traditional strength of Vanke.
After more than 30 years of development, Vanke's property service has always been at the forefront of the industry in terms of stability of service quality, innovation of service content and application of technology, which Vanke is very proud of.
What is particularly proud of is that Vanke can save more than a dozen lives every year, because Vanke's safety personnel must master cardiopulmonary resuscitation. Last year, at the Capital Airport, a passenger had a sudden heart disease, and Vanke mastered the AED technology to save the passenger.
Similarly, Vanke can save one or two people every year on the beach in Dameisha, Shenzhen, which are the characteristics of Vanke's property services, which are not only traditional security, cleaning, green protection and maintenance, but now enter the concept of good service and good products to provide urban space services.
To sum up: Vanke is one of the leading developers in the face of real estate with "the widest customer base, the most abundant scenarios, and the strongest comprehensive construction and operation capabilities".
In the future, when Vanke focuses its resources and strength, Vanke's three businesses will achieve better and faster development.
4. Withdraw from other businesses, clean up and transfer non-main business financial investments
After focusing on the three major industries, what about Vanke's other diversified industries?
Yu Liang said: "Vanke will gradually withdraw from other businesses, clean up and transfer financial investments that are not part of its main business, and at the same time, vigorously transfer Vanke's commercial office assets through block transactions and REITs. ”
Staying alive "Strategy 2"
Sharply reduce debt: If you don't take the initiative to reduce your debt, you can't be really safe
Strong weight loss is for long-term healthy development, so how to ensure safety?
Vanke's second major move to survive is to "take the initiative to reduce debts and reduce debts strongly"!
Yu Liang emphasized: "If Vanke can't take the initiative to reduce its debt, it will not be possible to achieve real security. ”
In the future, Vanke must completely get rid of the traditional three-high model of the industry in the past!
Yu Liang made a quantitative plan for this.
First of all, Vanke will reduce interest-bearing liabilities by more than 100 billion yuan in the next two years.
Secondly, in the next 5 years, Vanke's interest-bearing liabilities will be reduced by half as a whole!
By the end of 2023, Vanke's interest-bearing liabilities totaled RMB320.1 billion, accounting for 21.3% of total assets. This also means that in the next five years, Vanke's interest-bearing liabilities will be controlled within 160 billion!
This is a long-term arrangement for Vanke to "turn into debt" and solve the overall risk of Vanke in the future development process!
In the short term, Zhu Jiusheng said: "Vanke's overseas repayment in 2024 has been arranged, and there are still overseas bonds maturing in the second quarter only, with a maturity amount equivalent to about RMB 5.6 billion. At present, Vanke has started the relevant replacement and repayment preparations in advance. ”
At the same time, in order to reduce debts, Vanke actively disposes of assets.
In 2023, Vanke sold 12.3 billion yuan in assets, which is the second largest trading volume in the industry
The target for 2024 is 20 billion assets.
In the next few years after 2025, Vanke hopes to sell 20 billion yuan a year.
Stay alive "Initiative 3"
"Blood transfusion" is important, and we should switch to a new financing model as soon as possible
If debt reduction is the initiative of Vanke to "survive" in the future, it will relieve the pressure and "reduce debt and be light". Then, the transformation of the financing model with the value of "blood transfusion" and the creation of a new system to achieve financing power are the "escort ships" for Vanke to survive in the future. ”
In fact, why is financing so important today? The core reason is that the sales proceeds are not so sufficient.
Just as in January ~ April 2024, the sales of the top 100 real estate companies still fell by 46.8% year-on-year, which also means that the general sales collection situation of real estate companies is grim.
When the sales of "hematopoiesis" are under pressure in the short and medium term, the financing "blood transfusion" is the blood supplement station of life.
In the past, Vanke's financing ability for many years was actually very good.
Because in the past many years, the relationship between Vanke and the bank has been the total credit financing of the enterprise.
In layman's terms, Vanke's financing in the past relied on brushing your face.
Vanke's face is credit!
There are only two real estate companies in China's real estate industry that can do this.
In addition to Vanke, another is an excellent state-owned real estate enterprise. For example, by the end of 2023, among the nearly 200 billion loans that Vanke has cooperated with banks, there will be "more than 120 billion" directly with Vanke as the main borrower.
However, since the fourth quarter of '23, changes in national regulatory conditions or policies have brought about a change in the entire financing model of the real estate industry, and this adjustment has quickly put tremendous pressure on Vanke.
For example, Vanke's net cash outflow from fundraising activities in 2023 will be about 36.8 billion, a year-on-year decrease of 1,171%.
Based on the current new policy, Vanke will shift from a financing model based on the credit of enterprise entities to a financing model based on project and asset credit.
The specific form of financing should be shifted from the past financing of "total to total, unified borrowing and repayment, and credit lending" to a new way of financing of "project system, implementation of mortgage, and closed supervision".
Based on this, in 2024, what are the new changes and new actions in Vanke's financing model?
Two typical variations are:
First, after the credit value is transferred to the mortgage guarantee system, the authorized amount of Vanke's guarantee will increase from 35 billion yuan in 2023 to 150 billion yuan in 24 years. That's almost more than 4 times over.
Second, Vanke acts according to the new rules, and now packages 130 billion assets as collateral to apply for loans from banks!
Why are the collaterals and guarantees increasing? At first glance, I thought that something was going to happen to Vanke.
The fundamental reason lies in the fact that in the past, 90% of Vanke's financing relied on credit, not collateral. But now,
The collateral is a financing pass, and it is not possible to brush your face!
Under the new financing model, Vanke will take the initiative to "sort out resources, inventory assets, and package collateral assets" in 2024.
In fact, after repeated communication between Vanke and the bank in 2024, it was found that the bank paid more attention to Vanke's resources, assets, and collateral, and whether it was enough to cover the liabilities?
In this regard, after combing through resource assets and collateral and repeatedly communicating with the bank, Vanke came to a gratifying conclusion:
"Vanke's collateral, resources, and assets are currently sufficient!"
brief summary
The contraction of the above industries, focusing on the main business, reducing 160 billion debts, adjusting the new financing model and other packages of "slimming" plans have also caused two major concerns among investors.
First, will Vanke shrink rapidly and its performance will decline in the future?
Second, in terms of time, how long does it take to "slim down and keep fit" successful?
In this regard, Yu Liang also gave a clear answer.
First, Vanke's current package of slimming and fitness programs is not only a shrinkage and pressure drop program, but also a development and enterprising program.
After losing weight and getting fit, Vanke will be a healthier Vanke and a more future Vanke in the future, rather than a Vanke that will only reduce its debts and die after the reduction.
Second, how long will it take for Vanke to see the effect of slimming and fitness?
Yu Liang said: "I hope that the first results can be achieved in two years!"
What do you think about today's sharing? Welcome to leave a message in the comment area.