Article/Jiang Han, columnist of Sina Financial Opinion Leader Column (WeChat official account kopleader)
Time flies. In the past ten years, the Five Tigers, Evergrande and Country Garden have become the leading players in China's real estate market, while the former leader Fuli Real Estate has been left behind.
Let's go back ten years. Ten years ago, there was a very famous figure in China's real estate market R&F Property, the leader of the five tigers in South China At that time, the five tigers in South China kept abreast and became the enviable real estate giant.
However, time flies. In the past ten years, the five tigers, Evergrande and Country Garden have become the leading players in China's real estate market, while the previous leader, Fuli Real Estate, has gradually moved away and been left behind.
Now, Fuli, with a high debt of 280 billion yuan, has lost the pride of winning Wanda with 20 billion yuan last year. How can Fuli survive under the trend of real estate?
1
Fuli, who fell behind from the five tigers in South China
When talking about R&F Properties, I believe many people will think legend This word is indeed legendary at the early stage of the development of R&F Properties. In 1994, in the first half of the reform and opening up, especially when the market economy was just booming, China's real estate market was not yet fully started. When everyone was not sure what kind of market this would be, the two founders of R&F Properties: Zhang Li and Li Silian.
At that time, seeing that China's real estate market was just warming up, the two pioneers of the real estate market invested 20 million yuan at all costs to establish R&F Real Estate Company.
At that time, the city of Guangzhou was not as busy as it is now. There were many old factories in the city, and there were no luxurious high-rise skyscrapers. R&F set its sights on the transformation project of the old factories in Guangzhou, and undertook the heavy burden of transforming the old city. Relying on the power of the old city transformation, R&F won one building after another, and the growth rate was amazing. At that time, it was called R&F“ Behind every chimney that falls, there is a great contribution ”。
With the help of the super outlet of China's real estate market, R&F has naturally become the "flying pig on the outlet"“ Urban reconstruction, building livable communities ”With the strategy, R&F has undertaken many urban reconstruction projects, thus becoming one of the real estate enterprises that benefited most from the urban reconstruction.
In 2005, R&F was listed on the Hong Kong market at one fell swoop. On the first trading day, the turnover reached 6.17 million shares, the total turnover was about HK $68.63 million, and the market value exceeded HK $20 billion. R&F became a private enterprise in mainland China with the highest amount of capital raised in the Hong Kong H-share listing;
In May 2006, R&F Properties, which had been listed for less than a year, successfully ranked among the top 200 Hong Kong listed companies in terms of market value, becoming the first mainland real estate development enterprise to be included in the Hang Seng China Enterprise Index, Hang Seng Composite Index series and Hang Seng Circulation Index series.
In 2007, R&F Real Estate ranked fourth among real estate enterprises, second only to Vanke, Greenland and Zhonghai, and ranked first among the "Five Tigers of South China".
As the saying goes, when Fuli was preparing to do a big job and returned to A-share market, the world financial crisis hit in 2008, which made Fuli, who had taken land aggressively and made great progress on the commercial real estate road, suffer a blow and its strength was greatly reduced.
After that, it failed in the overseas expansion and Princess Bay; In the football club, it has created a Fuli club that has not brought much brand added value to the enterprise.
However, the capital situation of the enterprise is that Wang Xiaoer's performance has been worse over the past year. From 2012 to 2017, the balance of operating cash flow of R&F Real Estate was - 2464 million yuan, - 11862 million yuan, - 22065 million yuan, - 356 million yuan, - 3338 million yuan, and - 7.287 billion yuan, which was negative for six consecutive years.
As of the third quarter of 2018, R&F's performance was flat, but its debt reached a new high of 286.3 billion yuan. The ending cash balance, including restricted funds, was 19.223 billion yuan, barely covering 19.18 billion yuan of debt due within a year.
Looking at the market value, as of the closing of November 8, the market value of R&F was HK $38.217 billion, while that of the old brother Evergrande was HK $248.97 billion, and that of Country Garden was HK $196.095 billion. R&F was almost a fraction of these two companies.
The business performance fell behind, the debt pressure was huge, there was no hope of returning to A-share, and the high turnover bogged down. What happened to R&F, the leader of South China Real Estate at that time?
2
What has R&F done wrong?
In fact, we will find that the first half of R&F's success is the most classic embodiment of the pig on the tuyere, With the help of the rise of the real estate market, the old urban transformation takes off , basically every step is on the idea, Under the general trend of real estate, it is difficult for R&F to succeed 。
However, after 2008, it seems that Fuli has no such understanding of following the market rhythm Almost every step was half a beat slow. They mistakenly entered the commercial real estate market when the real estate market trend was not good, mistakenly entered the second and third tier cities when the real estate regulation was deepened, and were highly leveraged, highly indebted, and highly turnover when the real estate enterprises were short of funds. These practices seemed to be radical Not only failed to help Fuli copy to the end, but Fuli always took orders at the high position 。
First, it is strategically trapped in the strategic misunderstanding of state-owned enterprise thinking.
In fact, from our discussion above, we can find that Fuli is a thorough private enterprise, and private enterprises have always been Be quick, flexible, innovative, and good at differential competitive advantage But R&F is a thorough exception. R&F's management has always been known for being down-to-earth.
In fact, the management who does practical things is not a bad thing, but the bad thing is that they are too conservative. On various recruitment websites, Fuli is labeled with obvious bureaucratic style, conservative development line, and even called the private enterprise most like the state-owned enterprise. From this perspective, the phenomenon that Fuli always develops slowly seems to have an answer, Lack of sufficient market flexibility, necessary innovation spirit and differentiated competitive advantage This is the biggest strategic thinking mistake of Fuli, a state-owned private enterprise.
Second, we cannot grasp the general trend of the real estate market tactically.
According to Dow's theory of investment, Any enterprise should follow the trend of market development The invisible hand of economic law must be the one who obeys and the one who opposes, while Fuli seems to be somewhat uncertain about this general trend.
Before, the real estate market was booming, so long as it was long, it was actually right.
however When the real estate market is adjusted, slower than the trend becomes a big problem The strategy of R&F focusing on first tier and second tier cities was hit by the financial crisis in 2008, and then moved to second tier and third tier cities, but caught up with the regulation of the property market in 2013. When major real estate enterprises concentrated on saving money to tide over the difficulties, R&F was heavily borrowing, which may not be a problem in the eyes of the people involved, but from the perspective of hindsight, everything is a problem.
Third, he mistakenly invested in the hotel industry in the campaign.
If the strategy is like a state-owned enterprise, and the tactical uncertainty of the trend is not a fatal problem, the practice of Fuli in the campaign may be more problematic. In addition to the traditional real estate enterprises, Fuli's main strategic focus is the hotel business Fuli, which owns many high-end hotels, does not make money 。
Since 2004, R&F has started to invest in the construction of high-end hotels, with 17 international star hotels. The annual report of R&F for the past five years shows that from 2013 to 2017, its hotel operating losses were 249 million yuan, 140 million yuan, 167 million yuan, 183 million yuan and 146 million yuan respectively.
In 2017, R&F had more than 100 hotels by acquiring 77 hotels under Wanda and 24 high-end hotels that had been opened and built in the world“ The world's largest five-star hotel owner ”However, R&F hotels never make money.
In fact, this logic is also very simple. The hotel industry is relatively overcapacity, fierce competition, and low average profit level. Therefore, hotel management itself is not a fast money business. For real estate enterprises with high capital costs, hotel business must be done slowly, However, even the real estate giant Wang Jianlin did not dare to play in the industry, but R&F took over, and I have to say that the courage is commendable 。
Nowadays, the financing of real estate enterprises is increasingly difficult. According to the report of the Economic Observer, the average cost of trust financing of real estate enterprises is 13% - 13.5% at present, which has risen by more than 200 BP in the year.
However, the debt of Fuli, amounting to 286.3 billion yuan, is becoming the sword of Damocles hanging over Fuli. Whether the sales of 130 billion yuan can be completed is still unknown. Just at the current capital level, how can Fuli live?
It is estimated that Fuli is the person who needs to answer the "live" problem put forward by Vanke.
(The author of this article introduces: Special researcher of Suning Financial Research Institute.)
