Real estate “black iron era” arrival!Vanke desperate battle, Yu Liang frugal not to sit first class

2022-05-17 0 By

Vanke (00002.SZ, 02202.HK), the bell-ringer of real estate industry, once again sounded the alarm for real estate enterprises.On February 11, a copy of “Chairman Yu Liang’s summary speech at vanke 2022 Meeting” was leaked.A person close to Vanke told times weekly reporters that the content of the document is true.After proposing the “Silver Age” in 2014, Yu Liang once again defined a new stage for the real estate industry.Yu Liang said that the real estate industry has entered the “black iron era”, into the contraction of the table out of the stage.For the real estate industry, it is the inevitable trend of development to shrink the balance sheet, namely to de-financialize.”2022 is the year when the group burns its Bridges, and the beginning of a new era.”Yu Liang bluntly, the last fight is either dead, or alive, there is no intermediate state.The real estate industry must clear out quickly and resolutely. If it can solve the burden accumulated in the past, it will have the opportunity to start a new journey. If it cannot get rid of the burden, it will not survive.In the “Black Iron Era”, Vanke advocated frugality and created a wartime atmosphere.In November 2021, Vanke issued an internal proposal to reduce the expenditure that does not generate value, and to do great things with small money.In order to reduce unnecessary expenses, all employees plan their travel according to the principle of cost optimization.Vanke’s management, represented by Yu Liang, set an example and carried out austerity to the end.Yu liang revealed that at present he will not choose first class when booking tickets, and if there is time to get close to the flight, he will “buy the cheaper flight”.In 2022, vanke employees’ income will be significantly reduced, and welfare and subsidies will match the “black Iron Era”.In 2021, the Central Economic Work Conference stressed that houses should be defined as houses for living in, not speculation, strengthen the guidance of expectations, explore new development models, encourage both rental and purchase, and accelerate the development of the long-term rental market.Yu Liang’s understanding of “new development mode” is one central point and three basic points.One center is to solve the housing problem of the people;The three basic points are housing not speculation, rent and purchase and housing matching.Specifically, housing is not fried can be divided into “housing” and “not fried”.As for “houses are for living”, the reasonable housing needs of residents should be effectively addressed.”No speculation” means that although some purchase restrictions may be lifted, speculation is still not allowed and the increase limit will remain.Yu liang believes that the combination of renting and purchasing is an opportunity for rental housing, but it also means that newly needed buyers can choose between “renting” and “buying”, which will divert the demand for buying houses.Even a rise in rental demand cannot offset a decline in the number of homes sold by development businesses.”In the new development model, the relationship between people, land and housing may improve.”Housing supply will increase in core and major cities, and some improvement demand that has not been met in the past due to purchase restrictions will be released in the future.”Yu liang pointed out that the real estate industry to adapt to the reality of people’s livelihood attributes, do not expect prices to rise.Under “housing is not speculation”, the real estate industry has entered a stable cycle, and the mode of rapid expansion is no longer.International rating agency Moody’s said in a recent report that it expects the national contract sales of China’s property developers to fall by 5 to 10 percent in 2022.In Yu liang’s opinion, the real estate market will face two major changes, that is, market differentiation will become more and more obvious, the industry scale began to shrink.In the face of major changes, Vanke will make corresponding changes.Yu Liang pointed out that Vanke needs to think further in terms of investment. When market differentiation is shrinking and profits are very limited, vanke should make higher-quality investment, and shift from uniform and dispersed investment to local intensive investment with better market performance and proven team operation ability.If some places really do not do well, or to the whole construction system withdrawn, recall the “designation”.With the early high land price project and capitalized interest into the settlement, housing enterprises operating costs, profit space pressure.In recent years, the profitability of housing enterprises weakened, profit growth rate to maintain low.Data from CRR Real Estate Research Center show that in the first half of 2021, the gross profit margin, net profit margin and net profit margin of 80 typical listed real estate companies in the real estate industry continued to decline.Among them, the gross margin indicator saw the biggest decline, with the median gross margin falling 1.6 percentage points year-on-year to 21.7% in the first half of 2021.The median net interest rate and net return rate also fell to 9.3 per cent and 6.5 per cent, respectively.On a year-over-year basis, profit margin measures for the property sector have fallen to their lowest levels since 2015.Small profit stage, Vanke where to go?In this regard, Yu liang to BYD group chairman and president Wang Chuanfu “learn”.During a visit to BYD, Mr. Wang told Mr. Yu that byd produces all its products except tires and glass.Yu liang previously believed that car parts are mature enough to be purchased from the outside.But Wang chuanfu said that every product has a manufacturer, each manufacturer to make profits, put together BYD is difficult to make money.Inspired by this, Yu Liang believes that Vanke needs to carry out process reengineering, that is, reduce outsourcing links, reject the “erchuanshou” culture, do everything by yourself, and abandon the habitual thinking of the golden age.As the industry enters the “black Iron era”, how should Vanke look for new anchors?Yu Liang’s requirement for Vanke is to be a professional master, all-around champion and long-distance winner.To be a professional master means not to be satisfied with being an amateur. Do not compare with yourself in the past, but with benchmarking in the industry.The all-around champion means that the era of eating the world with one trick is over, and now we should lay equal emphasis on development, operation and service, which is vanke’s new “triathlon”.The long run is going to be a long-term commitment, a long-term commitment to do the right thing and not break the rules.”If we dare to fight, if we can fight, if we are willing to play together, we will win, and we will win exceptionally well.”Yu liang concluded.Original title: the Arrival of real Estate “Black Iron Era”! Vanke’s Desperate battle, Yu Liang does not fly first Class