“Last night, I was very uneasy, like a student who did not pass the exam and wanted to show his parents his report card. I can fully understand the various emotions of shareholders, whether they are dissatisfied, disappointed, confused, or concerned. Well, I feel the same way.”
On March 31, Vanke held a 2021 annual performance conference. This year’s theme is reflection and blueprint.
As at the beginning of the annual report, Yu Liang, chairman of the board of directors, still first reviewed the poor performance and the decline in net profit at the opening of the performance meeting.and sincerely apologize to 520,000 shareholders。
This is indeed an annual financial report worth reflecting on. After all, it’s been since 2008,Vanke’s first net profit decline in 13 years. In a horizontal comparison, Vanke’s competitors in the same tier—Country Garden, Longfor, and China Resources Land have maintained their net profit growth or maintained their leading position in sales.
Photo courtesy of Vanke Performance Conference
Yu Liang attributed the decline in net profit toLarge dispersion of management and high cost of multi-track exploration。
When reflecting on the disappointing moment, Vanke needs to paint a better blueprint for the outside world. Among Yu Liang’s picture books, the most important thing at present is the spin-off and listing of the cloud of all things.
In addition to properties, Yu Liang also focused on Vanke’s prospects in long-term rental apartments and logistics business sectors. He hoped that institutional investors could establish a new valuation model for these new tracks.
He also said, “We take the ability of each business to go public independently as one of the markers of its success.”
Net profit declines for third time since listing 31 years ago
In 2021, Vanke will achieve an operating income of 452.8 billion yuan, a year-on-year increase of 8.0%; the net profit attributable to shareholders of the listed company is 22.52 billion yuan,A year-on-year decrease of 45.7%。This is the third net profit decline of Vanke since its listing in 1995 and 2008.。
Although the management has made some disclosures on the reasons for the decline in performance in the Letter to Shareholders and the annual report, Yu Liang believes that further reflection and review are necessary at the performance meeting.
“No matter how comprehensive my reflection is, no matter how profound my review is, if you don’t pass the exam, you won’t do well in the exam. Our performance in 2021 is not good, which disappoints our shareholders.Here, I would like to express my sincere apologies to the 520,000 Vanke shareholders。”
Yu Liang was photographed by reporter Huang Wanyin at the latest media exchange meeting
The first is to reflect and review management methods. In the past, Vanke has always adopted a fully authorized and distributed management model. This management model can be close to the market and respond quickly to seize opportunities when the market is very good. However, as the competition becomes more and more intense and there are more and more large and complex projects, this distributed and fully authorized model creates some challenges. For example, when any single company or single region does not have all the capabilities required to win the competition , there will be problems of unevenness and large dispersion, and some projects that do not reach the average level will appear, thus lowering the return level of the entire performance.
“The problem of large dispersion caused by management methods is mainly reflected in the differentiation of project management capabilities and investment mistakes in a few projects.” Yu Liang cited the Beijing market as an example, Vanke judged that the market in the Beijing region will be significantly adjusted in 2018 and 2019. It had reached the bottom, so an asset package was purchased at that time, “but then the market fell more sharply, for which we had to set aside 2.5 billion yuan for impairment.”
But Yu Liang believes that Vanke can stop falling and stabilize this year., steadily improving. His confidence comes from two external foundations and three internal foundations. The outside is the foundation of policies and industries, and the inside is the support of self-adjustment and service business.
“As for the policy, I have full confidence that the industry is returning to normal, returning to rationality. Excessive profit margins and low profit margins are unsustainable, and the average profit margin level of our real estate industry will definitely reach the average level of society. Return. This is our policy basis for ‘stopping and stabilizing, and improving while maintaining stability’.” Yu Liang said.
When talking about the confidence to achieve the goal of stabilizing and recovering, Yu Liang said: “I know that any goal and plan needs to be achieved through people, and it depends on people.Last year, we abolished the level of group partners, that is, group executives in the usual sense, and each of us has to go to the front to work, me and the president are no exception. “
“President Zhu Jiusheng is also the first person in charge of the long-term rental apartment business. He is not only responsible for the operation tasks of the entire group, but also takes full responsibility for the operation and management of the long-term rental apartment business. The chief customer officer of each unit researches and solves the problems found from the client together”
Since investment mistakes are one of the main reasons for the decline in net profit, Vanke is also reversing this mistake. Zhang Hai, chief partner of Vanke Development and Operation Headquarters, said in response to a question from the “Daily Economic News” reporter that in 2021, both the housing sales and the public investment market will experience a hot first half of the year and a sudden cold in the second half. In such a market environment, it is difficult and challenging to grasp the investment rhythm.
“On the one hand, it is constrained by the real environment, and on the other hand, it requires forward-looking judgment. Since last year, Vanke has concentrated its investment in areas with stable markets, high safety margins and strong team management capabilities.”
In 2021, Vanke will acquire 148 new projects, with a total planned building area of 26.674 million square meters, an equity planned building area of 19.014 million square meters, and a total equity land price of about 140.15 billion yuan.
It is worth noting that at the same time as the annual report was released, Vanke launched a repurchase plan and a dividend distribution plan with the highest proportion in history. The company said it would choose an opportunity in the next three months.Carry out 2 billion to 2.5 billion repurchasethe dividend ratio is planned to jump from 35% in 2020 to 50%,A total of 11.28 billion yuan of dividends are planned to be distributed。
Being the “second landlord” model cost Vanke a lot
In addition to management methods, Yu Liang also reviewed and reflected on the development of Vanke’s new business. Because of the simultaneous exploration of multiple tracks, the cost of Vanke was greater than expected, and it also had an impact on past performance. Why explore multiple tracks at the same time?
Yu Liang’s judgment is that with Vanke’s size, if only one or two tracks are built, it is not enough to support sustainable development, nor does it support Vanke’s strategy of placing equal emphasis on development, operation and services.
In the long-term rental apartment business, Vanke is the earliest and most active responder, and is very optimistic about the development prospects of the rental business. However, from the perspective of the central policy and the policies issued by various departments and localities, the implementation time is too long. at the same time,The large-scale centralized renovation of urban villages and the “second landlord” model cost Vanke a lotand still pays the price for it to this day.
“These explorations took longer than we expected and paid a higher price. In addition, in the process of building a new track, trial and error is also essential. If there is no “second landlord” business in urban villages, Vanke’s long-term rental apartment The business can start making money long ago.”
However, Yu Liang believes that most of the tuition fees paid by Vanke to explore these businesses have basically been paid, and operating service businesses such as property, logistics, commerce, and long-term rental apartments will constitute Vanke’s future growth space.
The reason is that Vanke’s property business is in a leading position in the industry, with a compound growth rate of more than 30% in the past 10 years; its logistics business leads the industry in terms of high-standard warehouses, and the cold chain ranks first in the country, with a compound growth rate of 52% in the past three years; The long-term rental apartment business is the absolute No. 1 in the industry, with a compound growth rate of over 40% in the past three years; the business platform SCPG has a compound growth rate of 20% in the past five years. These businesses have contributed more than 40 billion yuan to Vanke in the past year. revenue, and still maintain rapid growth.
new valuation
In addition to “selling oneself and boasting”, Yu Liang also hopes that investors and the capital market can see the prospects of the blueprint drawn by Vanke.
It is certain that at present, there is no business that can make a lot of money like real estate development. Property, logistics, commerce, long-term rental apartments and other business services that take a long time and make small money cannot be compared in this dimension. Real estate development comparison.
Yu Liang was also troubled by this, so he appealed to institutional investors to establish a new valuation model for the above-mentioned operating service business and see the new market value of Vanke.
In the past, the capital market expected Vanke’s spin-off of the property company to go public, but Yu Liang has repeatedly expressed in public that he “deliberately keeps the property at a distance from the capital market” and “is afraid of being guided by the capital market” and other remarks. But at this performance conference,Yu Liang said that the first indicator to measure the success of operating a service business is whether it can be listed independently.。
At present, Vanke’s spin-off of Wanke Cloud for overseas listing has been accepted by the China Securities Regulatory Commission. Zhu Baoquan, CEO of Wanwanyun, said at the performance meeting that the company’s spin-off of Wanwanyun and listing mainly thinks that this son is already an adult. It needs to introduce domestic and foreign institutional investors to further improve its comprehensive strength, establish a leading position in the industry, attract and Retain talent.
“For the timing of listing, now may be more appropriate than 2020, because market valuations tend to be more rational.”
Yu Liang concluded that in the 38-year history of Vanke’s development, it has not always been smooth sailing. There have been three net profit declines in the middle, namely in 1995, 2008 and last year. Each decline exposed Vanke’s previous accumulation. Some shortcomings.
“When the external environment challenges, these shortcomings accumulate, and finally sound the alarm for us in the form of a decline in net profit, reminding us that we must always maintain awe of the market, face the problem squarely, prescribe the right medicine, and act quickly.”
As of the close on March 31, the share price of Vanke A rose 0.9% to 19.15 yuan, with a total market value of 213.6 billion yuan.
This article does not constitute investment advice, and operate at your own risk.
Reporter|Huang Wanyin Edit|Chen Mengyu Sun Zhicheng Du Bo Wang Jiaqi
proofreading |Cheng Peng
This article is reprinted from: every real estate
Read more exciting financial news,
Please pay attention”every headline“(nbdtoutiao),
Continuing to present to you later today.
