"In the first half of this year, as China's real estate prices and transaction volume recovered from the low level of the same period last year, the regulation of real estate policies was strengthened." Yang Jian, chairman of Zhongliang Holdings, summed up the first half of the real estate people at the interim results conference.
Although the policy is constantly tightening, the real estate industry has a liquidity shortage and even debt default, but on the other hand, the development of the industry is in danger.
This is still a good era, but it is also a changeable era, Yang Jian's words are always full of two sides, looking for hope in adversity, looking for deficiencies in advantages, and the same is true for Zhongliang.
Scale used to be the magic weapon for victory, but in this era it seems to be far from enough, Zhongliang is also adjusting to adapt to this change, and "steady" and "balanced" development has become a new goal in Yang Jian's mouth.
According to the perspective of real estate new media, Zhongliang completed contract sales of 95 billion yuan in the first half of the year, an increase of 40% year-on-year, and completed 53% of the sales target of 180 billion yuan in 2021, with an average dematerialization rate of 70%, a collection rate of 85%, and an average sales price of 12,600 yuan per square meter.
Yang Jian said that he is full of confidence in completing the annual contract sales target of 180 billion yuan.
In the first half of 2021, Zhongliang Holdings' revenue was 32.91 billion yuan, an increase of 38.5% year-on-year, core net profit attributable to the mother was 1.497 billion yuan, an increase of 14.5% year-on-year, and gross profit was 6.83 billion yuan, an increase of 27% year-on-year.
On the whole, the growth rate of all indicators of Zhongliang belongs to a relatively reasonable range, there is no geometric growth in the past, nor is it falling into a strange circle of regression, and Zhongliang is constantly fading the label of "dark horse".
Does not rely on centralized land supply
In the first half of this year, the total amount of land purchased by Zhongliang was 40.8 billion yuan, with a total value of 102 billion yuan, and a total of 67 cases of land were acquired, with an average land price of 5100 yuan / square meter, and the land-to-goods ratio was about 2.5.
At the beginning of this year, the introduction of the centralized land supply policy changed the past play of housing enterprises, but it is not in the middle of the strong first- and second-tier cities to get land, and does not rely on this part of the city, and the impact is much smaller than that of housing enterprises of the same size.
In the past, Zhongliang successfully entered the TOP20 by relying on the bull market in low-level cities, but with the dividends of shed reform and returning to the hometown to buy property disappeared, Zhongliang also actively transferred to second- and third-tier cities.
In the first half of the year, second- and third-tier cities accounted for 89%, and the development logic of Zhongliang is also changing, moving closer to safer cities, which ensure the de-industrialization and turnover of Zhongliang.
Centralized land supply cities accounted for about 19% of land in the first half of the year, although Zhongliang is changing to high-rise cities, but in some traditional real estate popular cities, Zhongliang still will not participate too much, so it has also avoided part of the impact.
It is worth noting that the average premium rate of Zhongliang's land is about 25%, which is in a higher position in the industry, due to the pursuit of Zhongliang's fast turnover, its urgency in land reserve is still stronger than other housing enterprises.
The high and low land premiums affect the gross margin performance. Between speed and profit, Zhongliang's past choice has always been to focus on turnover, so the company's gross profit margin has been hovering around 20%, and there is still some room for improvement. It fell to 20.8 percent in the first half of the year and is expected to remain at this level throughout the year.
In view of the potential possible "fourth red line" land sales ratio, throughout the year, the proportion of land sales in Zhongliang will be lower than 40%, about 30-35%.
Zhongliang is trying to further expand diversified investment, increasing land reserves through industrial cities, commercial, acquisitions and other forms, and achieving a 25% proportion in diversified land acquisition. Executive Director and Co-President He Jian said that the proportion of this part is expected to be further improved in the future.
In terms of regional layout, the Yangtze River Delta accounts for 51% of the total investment; followed by the central and western regions accounting for 18%; the west coast of the strait accounts for 12%; the Bohai Rim accounts for 10%; and the Pearl River Delta accounts for 9%, presenting a regional layout with sales and total soil reserve distribution roughly the same, the Yangtze River Delta is the mainstay, followed by the central and western regions, and the remaining areas account for a small proportion.
As of the middle of the year, zhongliang's total land reserve was about 66 million square meters (including the saleable floor area), and the average cost of soil storage was 4,400 yuan / square meter. In terms of saleable resources, the total saleable soil storage area is 41.8 million square meters, and the total saleable soil storage value is 500 billion yuan.
From the perspective of urban energy level, Zhongliang has gradually completed the national layout and urban transformation, and the second- and third-tier cities will account for 89% of the future saleable value.
He Jian, newly promoted co-president, said that the overall investment direction of Zhongliang has shifted from "expansion" to "deep cultivation", and Zhongliang's investment layout does not completely rely on centralized land supply, focusing on second-tier cities while paying attention to third-tier cities in the metropolitan area to ensure safety and profits. At the same time, Zhongliang also has some funds to invest in the second half of the year.
On the other hand, cooperation is also an important means for Zhongliang to break the situation. He Jian revealed that the company has comprehensively improved its cooperation with leading housing enterprises and local leading enterprises in the industry.
Of course, with it comes the choice of minority shareholders' interests to eat the company's profits. Financial director You Sijia said that the cooperation degree of housing enterprises in the Yangtze River Delta is more than that of other regional housing enterprises, and the equity ratio of Zhongliang is now about 40:60, and with the carry-over of future profits, it will slowly increase to about 50:50, which is also the mainstream trend of most housing enterprises.
The impact of commercial tickets is not large Continue to reduce leverage
Compared with the turnaround of investment on the ground, Zhongliang is obviously more difficult to make financial changes, and although the bloated and complex debt structure in the past has helped the company grow, it has also brought certain side effects.
On the three red lines, Zhongliang maintained the "yellow file", stepped on a red line, and the asset-liability ratio after excluding advance receipts fell to 79.3%, but the gap from the 70% required by the regulator was large, and it still took a certain amount of time to return to green, and Zhongliang did not give a specific timetable.
At present, the scale of Zhongliang's contract liabilities is about 130 billion yuan, and high turnover is an indispensable link for Zhongliang, so this debt scale is slightly bulky for Zhongliang.
From the other two indicators, the net debt ratio fell from 65.8% at the end of 2020 to 56.1%, and the unrestricted cash short-term debt ratio was 1.2 times, both optimized.
As of the end of the first half of the year, Zhongliang's interest-bearing liabilities were 54.6 billion yuan, a slight increase compared with the end of last year. In the specific debt structure, although the proportion of short-term debt has declined, it is still high, accounting for 42%, while the proportion of domestic non-banking has also declined, but still accounts for 25%.
"Assuming there are new bond issuance opportunities at the end of the year or early next year, we will consider them. But for us, there is no risk. At the same time, we will also closely observe the solutions to the current liquidity problems of other large housing enterprises. ”
At present, the financing cost of Zhongliang has also dropped to 8.3%. You Sijia said that Zhongliang will do a lot of debt reduction and debt stabilization work in the second half of the year and next year to further reduce leverage.
First of all, Zhongliang will reduce the balance of overseas 364 bills by no less than US$200 million, and Zhongliang has prepared its own funds for redemption in the second half of the year. In the next 12 months, for the stock of overseas 364 notes, Zhongliang will reduce it from about 45% to 25%.
At present, Zhongliang's financing channels are mainly domestic development loans, domestic non-bank loans and overseas DOLLAR bonds, while there are fewer channels in the domestic bond market.
Regarding the recent hot commercial tickets, in May, Shanghai Zhongliang was involved in a dispute over the redemption of commercial tickets, and then paid in full.
You Sijia said that the scale of Zhongliang commercial tickets should be regarded as very small in the industry.
"At the end of last year, the scale of Zhongliang's commercial tickets was about 600 million yuan, and in the first half of the year, it has dropped to about 400 million yuan, our commercial tickets are related to suppliers, they are paid on time, and some of the statements before this year are misinformed, and the amount of our commercial tickets is very small."
For the commercial ticket may be included in the supervision, You Sijia said that this will not have much impact on Zhongliang, and we will do it according to the requirements of the state.
From the above sets of important financial data, it is not difficult to see that Zhongliang is also trying to reduce leverage step by step and reduce dependence on debt, although the effect is still not too significant, but for Zhongliang, who has faced greater crises in the past, there is only one choice to "believe in the process".
Yang Jian said that under the general tone of "housing and not speculation", monetary policy is still tight, and the real estate market is expected to remain challenging in the second half of the year.
The following is the Q&A transcript of the 2021 interim results conference of Zhongliang Holdings:
On-site question: What is the impact of the new policy of "two concentrations" of land supply on Zhongliang? How does Zhongliang ensure its own advantages in the land market? What kind of land acquisition plan is there in the second half of the year?
He Jian: Zhongliang is committed to the national layout, deep ploughing the metropolitan area, and does not rely on centralized land supply cities. In the first half of the year, the total land investment was about RMB40.8 billion, and a total of 67 land projects were acquired, with a total construction area of about 7.937 million square meters. Among the land purchase investment in the first half of the year, the second-tier cities from the centralized land supply policy accounted for about 19% of the total land investment, and other second-tier cities accounted for 14%. The remaining total land investment accounts for 55% of the third-tier cities and about 11% in the fourth-tier cities.
Zhongliang has entered more than 150 cities, there are many second- and third-tier cities that can be invested, we comply with the strict land acquisition process and standards, so we have not purchased highly competitive and costly land, which does not meet our investment standards. Increase efforts to expand the diversification of land purchases, through the production of cities, commerce, etc. to increase high-quality soil reserves, diversified land purchase accounted for about 25%, the future with the deep ploughing of major regions, the proportion of industrial cities and land is expected to further increase.
On-site question: The minority shareholders' equity has increased rapidly, will Zhongliang continue to maintain the trend of more cooperation with housing enterprises in the future? Will the second batch of policies such as centralized land supply or a premium limit of 15% have an impact on the company in the future? Recently, there have been liquidity problems in leading real estate enterprises, which can have an impact on the company's bond issuance or financing?
You Scarlett: About the situation of minority stakes. We are essentially a housing enterprise centered on the Yangtze River Delta, and the model of buying land in the Yangtze River Delta is generally based on bidding, auctioning and listing or mergers and acquisitions. The degree of cooperation between real estate enterprises in the Yangtze River Delta is more than that in other regions, including the Pearl River Delta housing enterprises, so you will find that whether it is a minority equity interest or an equity ratio, it can basically be seen.
Minority shareholders' rights, since the listing of our equity financing or do less, now the proportion is about 40 and 60, with the unprofitable carry-over, we will slowly increase to about five-five, basically we look at the Yangtze River Delta housing enterprise trend should also be to the five-five aspects of development, including a large housing enterprises are also in the five-five a trend.
Regarding the land supply situation, the centralized land supply now covers 22 cities, 4 first-tier cities, and 18 second-tier cities, basically in the second quarter, the first round of land supply has been done. If the policy is oriented, the second batch of individual cities and even many cities may make some fine-tuning of this policy.
Our dependence on the 18 second-tier cities with centralized land supply is not too high, and because of the price limit, we generally do not necessarily do a merger, and in the future, we will also observe some progress of the policy.
It is reasonable to expect that the competition for the price of the second batch of centralized land supply and the rigor of the price limit are expected to be less fierce than those of the first batch, of course, it remains to be seen. We now have 80% of the ways to get land are cities that are not centralized for land supply, so for us, neither the risk nor the profit is too large.
Regarding some of the recent liquidity problems of housing enterprises, I think that first of all, the national policy orientation is still very clear, that is, it is hoped that housing enterprises will reduce leverage and stabilize debt. Zhongliang's financing channels are mainly three, domestic development loans, domestic non-bank loans and overseas DOLLAR bonds, and our channels in the domestic bond market are very few.
In this case, it should be expected that the overseas bond issuance market should not reopen too soon in the short term, so now the window for re-issuance of bonds, we feel that it is still relatively passive. In this environment, we will arrange the repayment of the US dollar debt due in the second half of the year and use our own cash flow to make repayments. With half a year of continuous repayments, the total amount of our foreign dollar debt should drop to a very successful level.
Assuming there are new bond issuance opportunities at the end of the year or early next year, we will consider them. But for Zhongliang, we don't think it will form a risk. At the same time, we will also closely observe the solutions to the current liquidity problems of other large housing enterprises.
On-site question: Recently, many real estate companies in the industry have been laying off employees continuously, and many companies have a large proportion of layoffs, how will Zhongliang consider optimizing personnel and organizational structure?
Chen Hongliang: This year, the adjustment of the middle beam is not large, and the overall organizational structure is stable. However, higher requirements are put forward for internal personnel, and the control of staffing and the optimization of structure are two-pronged, so as to improve human efficiency and achieve the growth of employee income.
Control the establishment, reduce external recruitment, fully tap internal talent resources, and fully give internal personnel opportunities. The core of the control and compilation is the refined management of talents, in order to adapt to and match the current scale and status quo of enterprise development. In the process of control and editing, Zhongliang simultaneously launched an internal "surge plan", which is to let talents flow within the organization. Under the fine management and clear responsibilities and authorities, Zhongliang always emphasizes the stability of internal employees.
In fact, in the first half of the year, the proportion of salary increases for backbone liang was close to 11%, far exceeding other enterprises in the industry in the same period. In 2021, the overall salary package of Zhongliang also increased by 3.4%. Zhongliang has always adhered to the values of Zhongliang, like-minded people, willing to develop in the long run, the company will give enough incentives.
On-site question: What is the scale of commercial tickets in Zhongliang? Will commercial tickets be included in the "three red lines"?
You Sijia: Zhongliang's current commercial ticket size is very small, 600 million yuan at the end of last year, and it has dropped to 400 million yuan in the first half of the year, all of which are repaid on time. For the time being, there has been no government notice to include it, and even if it is calculated, it will have little impact on the "three red lines".
If needed, we will do it according to national requirements.
This article originated from the viewpoint real estate network
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