Wang Yilei (left) and Wang Heming (right)
Leju Finance Zhang Wenjing was sent from Hangzhou
In the Zhejiang real estate circle, Wang Heming, the founder of Guangyu Group, has a high status in the jianghu, and like Song Weiping of Greentown and Qi Jinxing of Binjiang, he is also a veteran figure in the real estate industry in Zhejiang. The difference is that as early as 2012, Wang Heming has retreated to the second line and handed over the baton to the next generation of Wang Yilei.
The outside world is happy to compare Guangyu Group with Binjiang Group, both of which are born out of state-owned enterprises, and the leaders all work within the system and are known for their low profile in the real estate circle.
But today, Guangyu is obviously no longer comparable to Binjiang. In 2019, Guangyu Group achieved contract sales of 4.29 billion yuan, only 1/26 of Binjiang Group, which was far behind.
"Doing real estate is more about mentality." Wang Yilei said the essence of Guangyu Group's development for more than 30 years. In fact, it is the mentality of "seeking stability" - not seeking speed and big, but seeking stability. When other housing companies have impacted the scale of tens of billions and hundreds of billions, Guangyu Group is "indifferent", which is also a unique existence in the real estate circle full of wolf nature.
However, the other side of stability is the "Buddhist system". As the ceiling of the real estate industry is getting closer and closer, the market competition is becoming more and more fierce, and the living space of small and medium-sized housing enterprises is squeezed, the survival philosophy of Guangyu's "Buddhist system" is obviously not effective.
"Old Eighteen" housing enterprises
In the 1980s, Hangzhou municipal governments at all levels and housing management departments set up 18 housing management companies, the main responsibility is to demolish and rebuild dangerous houses, known as Hangzhou's "old eighteen" housing enterprises, Guangyu Group is among them.
Guangyu Group was first affiliated to the housing construction and development company in Shangcheng District. In 1989, Wang Heming, then director of the Planning and Economic Commission of Hangzhou's Shangcheng District and just turned 40, entered the Shangcheng District Housing Construction and Development Company as general manager.
Like other state-owned housing enterprises, Guangyu's main task is to transform the old city, and has successively transformed many old communities such as Daxue Road Community, Guanyintang Community, Qianye Lane Community, Huazang Temple Lane Community, etc., with a total transformation area of more than 1 million square meters.
In 1992, the policy allowed Sino-foreign joint ventures, and Guangyu also took the opportunity to go out of the shangcheng district and cooperate with foreign investors to obtain land and build residential projects. The Zhijiang Garden in Hangzhou Binjiang District is the first villa project jointly developed by Guangyu and cross-river. In the same year, Guangyu also cooperated with Hong Kong to build The First High-rise Residential Jinlong Home in Hangzhou. It can be said that Guangyu is the earliest participant in the marketization of real estate in Hangzhou.
In 2000, Guangyu Group completed the restructuring. After a number of equity transfers and capital increases, in 2004, Guangyu Group Co., Ltd. was established, and Wang Heming became the actual controller.
Three years later, Guangyu Group was listed on the Shenzhen Small and Medium-sized Board, causing a great shock in the Zhejiang real estate circle, becoming the first private real estate company in the country to be listed on the A-share market, and was described as a "submarine that just surfaced". Binjiang Group, which has a high influence and popularity in Hangzhou, was also listed a year later.
From the perspective of equity structure, Hangzhou Pinghai Investment Co., Ltd., Wang Heming, Hangzhou Lanhua Investment Management Co., Ltd., Fattea Management (Hangzhou) Co., Ltd. and Wang Zhenfeng are the top five shareholders of Guangyu Group, holding 17.41%, 9.58%, 4.26%, 1.50% and 1.26% respectively.
As the real estate market enters the era of capital competition, the "old eighteen" housing enterprises have gradually faded out of the public eye. At present, in addition to Guangyu, only Songdu Group, Hangzhou Fang, Xifang, and Dada Real Estate are left.
The storms can be changeable. The successive departures of the "old eighteen" housing enterprises have made Guangyu people both sigh and feel a sense of crisis. Being able to survive the baptism of the market without falling, Wang Yilei attributed the survival of Guangyu Group to a "stable" word.
Fight father and son soldiers
Guangyu's "Buddhist" characteristics have a lot to do with founder Wang Heming.
Wang Heming is a "Confucian businessman" in the real estate circle, with white hair, looks like a university professor, very low-key, and has little ambition.
He worked as a skilled worker in a corps in the northeast for 10 years, doing real estate in the spirit of making products. "Some people say that 'people have to be rich and take a dangerous road', but I don't agree. I have been doing it for more than 30 years, relying on a 'stable' word. Wang Heming once said.
In 2008, the property market suffered a cold winter. Since then, Guangyu has begun to work hard to reduce debt, the debt ratio has dropped from 71.4% in 2008 to about 60%, and has formed an "unspoken rule" internally: it is better to take less land than to ensure sufficient cash flow, how much cash on hand, and how much to do.
The finances should be stable, and the style should be more stable. Wang Heming has worked in the system and has many friends in the political circles. "But I've never used those relationships to the advantage of a business." Wang Heming once said, "We must not only be safe and secure for ourselves, but also not harm others." ”
A department investigated a corruption case of an official in Hangzhou, and the person in charge of a branch of "Guangyu" was called to cooperate with the investigation. Wang Heming was very determined: "We never bribe, we will be fine." Later, the person in charge did go home safely.
From the perspective of inheritance, Guangyu Group is also an enterprise that has been transferred earlier. In 2012, The "second generation" Wang Yilei, who had just turned 30, officially took over the baton from Wang Heming, who was one year younger than Yang Huiyan of Country Garden.
But in fact, the shift is not overnight, the process lasts for nearly 10 years. In 2002, Wang Yilei entered Guangyu Group as a part-time worker and a half-study, starting from the most basic work, and has since served as the secretary of the president, the manager of the securities department, the secretary of the board of directors, the vice president, the vice chairman and the president.
Nowadays, even if Wang Heming retreats to the second line, Wang Yilei still often goes to consult. In Wang Yilei's eyes, Wang Heming was the spiritual leader of Guangyu. Wang Yilei likes to refer to Wang Heming as the "old mage". This is a term used in Shanghainese to describe a seasoned person who is experienced, proficient in business, and able to solve difficult and complicated diseases.
Wang Yilei inherited his father's steady temperament. The business philosophy is in line with Wang Heming, that is, it is not faster than "faster", taking small steps, and making progress every year.
Sales stand still
Even Songdu Group, which is also one of the "old eighteen" housing enterprises and has the same stability-seeking genes, has exceeded the 10 billion mark in 2018. At the end of 2019, Songdu Group proposed the "Kunpeng Plan", which set the impact of 30 billion yuan as the first "90,000 miles" of Kunpeng.
Since its establishment in 1984, Guangyu Group has been 36 years old, and its revenue scale is only about 4 billion yuan. From the perspective of main business, in 2007, the first year of Guangyu's listing, its real estate income was 1.282 billion yuan; by 2019, the real estate income was only 2.050 billion yuan. In the 2019 housing enterprise sales TOP200 list released by Kerui, Guangyu Group failed to be listed.
Guangyu's base camp is in Hangzhou, and as early as 2002, it marched into Huangshan, and then successively entered Shaoxing, Taizhou, Zhoushan and Zhaoqing in Guangdong. More than ten years later, the layout distribution of Guangyu is still limited to the three provinces of Zhejiang, Anhui and Guangdong.
Not only is the pace of expansion slow, But Guangyu is also cautious in the land market. In recent years, Guangyu has been mainly concentrated in Hangzhou and other second- and third-tier cities in Zhejiang, and only in Huangshan and Zhaoqing, which have existed layouts, have been taken outside the province.
Throughout the first half of 2020, Guangyu had no new land reserves. Until September 21, Guangyu's subsidiary bid for a residential land in Fuyang, Hangzhou, with a maximum limit price of 985 million yuan + self-sustaining 2% of the commercial housing area.
However, on September 14 and September 21, Guangyu announced that it would acquire 40% of the equity of Hangzhou Xingcheng Business Consulting Co., Ltd. and 49.5% of Hangzhou Yuhui Enterprise Management Co., Ltd., and provide financial assistance of 100 million yuan and 122 million yuan respectively. Leju Finance learned that the two project companies each got a piece of land in September.
From 2017 to 2019, Guangyu's new land reserve was only about 5 cases per year, of which two projects were added through cooperation in 2018. Before 2017, there were fewer land acquisitions, only 1-2 cases per year. As of June 2020, Guangyu Reserve is planned to have a buildable area of 1.7037 million square meters.
However, in recent years, Guangyu's debt ratio has increased steadily, 59.40%, 69.33% and 70.95% in 2017-2019, respectively, and as of the end of June 2020, Guangyu's debt ratio was 74.28%, and the total liabilities were 10.871 billion yuan.
In the first half of 2020, the operating income of Guangyu Group was 1.729 billion yuan, down 8.49% year-on-year, of which the real estate income was 351 million yuan, accounting for 20.34% of the total revenue; the net profit was 50.9885 million yuan, down 70.65% year-on-year.
From the performance point of view, Guangyu Group is indeed too "Buddhist".
But times have changed. When the sales scale reaches 16 trillion yuan, the real estate market gradually enters the stock competition pattern, the era of "big fish eating small fish" is coming, and the "Buddhist" survival philosophy may be difficult to maintain the "small and beautiful" future.
The strategy of Guangyu Group is to do a good job in the real estate business at the same time, cultivate the second main business of great health, and strive to make it a new growth point for the company's development.
In May 2015, Guangyu cooperated with Shizheng Medical to establish Hangzhou Dekang Medical Diagnosis Center, which is the first third-party medical imaging diagnosis center in Zhejiang Province, announcing that the company has officially laid out the big health industry as the second main business.
Whether it is the current chairman Wang Yilei or Wang Heming, who has retreated behind the scenes, they attach great importance to the big health, saying that entering the big health industry is the "second entrepreneurship" of Guangyu Group. It is understood that the two have led the team to Japan for field investigation many times.
However, until the first half of 2020, Guangyu did not disclose the revenue of the big health industry in the financial report.
To this end, some investors questioned: How much has Guangyu Group invested in the big health industry? Is the so-called double main business just a dream?
Guangyu Group replied that the development of the main business of great health is still in its infancy, and there is no experience to follow, and the company will actively and pragmatically explore the sustainable development model of the main business of health.