Growing flowers in the opium poppy

Interview/Xin Shikung author/xin "value is used to tell the story, people will only care about the policy," when a Vanke management to the reporter so expressed a consensus in the industry, it is a negative answer, but also a helpless answer. After more than 10 years of rapid development in the real estate industry, this is the final answer we can draw. The growth of real estate has never relied on the value creation ability of real estate enterprises, and the capital market does not look at the value of real estate enterprises.　　Most importantly, they have no story, they have no land reserve, they have no special ability. Since the new China has real estate enterprises, the development of real estate enterprises I am afraid to boil down to a model, that is, Ceibs accounting Professor Dingyuan summed up: "Growth by investment, profit by inflation."　　To the housing enterprise pacesetter Vanke, down to countless project companies, unmatched. This kind of development pattern makes the real estate enterprise of China basically develop mainly, depend on the rising profit of the house price, rely on the enclosure listing financing to enlarge the scale unceasingly. After financing, buy land, refinancing, into a cycle. As long as prices keep rising, the cycle will continue. Its biggest evil result is the real estate enterprise does not need to pay much attention to own value creation ability at all, as long as can maintain this cycle, the enterprise can expand unceasingly grows.　　Real estate Enterprises in the essence of their own hollowing out.　　The problem now is that house prices have soared and are likely to not recur for a long time. Leading Vanke can say that Vanke is the most successful real estate companies. As far as Vanke itself is concerned, it is at the forefront of the market in many ways. But this does not affect people talking about the real estate in the repeated discussion of Vanke, whether positive or negative. A basic reasoning is that if Vanke has a problem, then other companies have to say.　　This is Vanke's honor, but also the misfortune of Vanke, is the unfortunate real estate enterprises, because real estate companies can not find too many essential differences. In the stock market, Vanke Enterprise Co., Ltd. (SZ:000002, hereinafter referred to as Vanke) has been considered a "good student", each year to hand over the beautiful "report card", the market value from the beginning of 2001 to now increased by more than 10 times times.　　Good performance, growth so that Vanke is sought after by the capital market, is considered to be constantly to create value for shareholders of the company. From the perspective of financial analysis, Dingyuan gives another interpretation. In his "Vanke Truth: Profit by inflation, growth by investment?" "Vanke's profits have been rising since 2000, but net cash flows from operating activities have always been small netting profits and mostly negative," the study said.　　"This gap is particularly evident in 2007, Vanke net profit of 5.3 billion yuan, and operating activities generated by net cash flow is negative 10.4 billion yuan." "Generally speaking, the enterprise continues to operate negative cash flow is that the enterprise's main business lacks the ability to create cash." In the real estate industry, this means that companies rely on the sale of the house to the cash is not enough to maintain the reproduction, the difference can only be financedThis market financing to solve. At present, China's real estate enterprises are just like this. Over the longer term, the profits and refinancing of enterprises are accumulated in more and more overvalued land and construction projects, the enterprise risk is constantly magnified.　　Dingyuan, in an interview with the digital business age, added.　　From the data released by Vanke, it can be seen that 10 years of Vanke business activities generated by the net cash flow is negative. At the same time, Vanke continuously through the two-tier market to issue bonds, the end of 2006 financing 4.2 billion yuan, 2007 by the market hot financing 10 billion yuan, September 2008 company announced the issuance of corporate bonds no more than 5.9 billion yuan, August 2009, Vanke also throws tens of billions of dollars financing plan.　　Vanke in the 2009 annual report also said that in 2010, the company will be in financing to ensure that operating security as the primary principle, and banks, trusts, insurance funds and other financial institutions to carry out closer cooperation, and constantly innovate financing methods, broaden the financing channels ... Dingyuan asked: "An annual profit, but can not generate enough cash flow through business activities, need to continue to finance the capital market companies, it can rely on its own profitability to bring long-term returns to shareholders?"　　"A company based on constant financing to scale up its market capitalisation is the immediate question." At the beginning of 2001, Vanke market value of about 8.8 billion yuan, the current market value of about 120 billion yuan, 10 years less than 10 times times the increase. The market capitalisation of 2007 even exceeded 200 billion yuan, not only in China, but also according to media reports, far more than the four major U.S. property companies. What has pushed Vanke's market capitalisation higher?　　Is Vanke's own growth, the operation of the capital market, or the improvement of the capital market valuation level? In his report, Professor Dingyuan further factored in the market capitalisation of Vanke: The market capitalisation consists of the company's net assets and the market-level (representing capital market valuations).　　NET assets are mainly driven by two factors, equity expansion and profit accumulation. At the beginning of 2001, Vanke market value of about 8.8 billion yuan, by the end of the third quarter of 2007, Vanke market value of about 207.5 billion yuan (at this time Vanke A shares is so far the market highs), increased 22 times times more.　　Over the same period, the city's net rate rose from 3.07 to 7.95, a 1.59 times-fold increase. At the beginning of 2001, Vanke net assets of about 2.8 billion yuan, by the end of the third quarter of 2007, net assets grew to 26.1 billion yuan, increased 8 times times more (as at the end of 2009, its net assets grew to 37.3 billion yuan, increased by more than 12 times times).　　It can be seen that the increase in the value of market mania is not a major contributor to the value increase, but the growth of the firm's book values is the main cause of market capitalisation. Further mortem Vanke's net assets can be found, from the beginning of 2001 to the third quarter of 2007, Vanke issued a total of more than two, raise capital of 14.1 billion yuan, plus convertible bonds about 3.8 billion yuan, equity expansion of about 17.9 billion yuan, accounting for the increase in net assets of 77%, and the same period of company earnings accumulated about accounted for only 2 of the increase in net assets4%.　　That is to say, Vanke is bigger than profitability, the real secret weapon is capital operation ability.　　If financing and equity expansion do not fully identify a company's value creation capabilities, then we look at Vanke's profitability. Because the real estate enterprise profit table sales and the cost is not matched at the time, the cost is at least earlier than the sales two or three years, therefore in the land price rising in the previous years, the real estate project period of at least two year project cycle enables the real estate enterprise to enjoy the asset price rise to bring the benefit. such as Vanke's 2008-year profit statement, the cost of land is from June 30, 2005 to June 30, 2006 of the premium price, and sales are from June 30, 2007 to June 30, 2008 prices.　　In this period of more than two years of the project cycle, only the rise in house prices can bring vanke a lot of profits. 2002 ~2007 years, Vanke's average sales gross profit margin of 33%, the average sales net interest rate of 12%, and the deduction of house prices, land price rising factors (according to the National Bureau of Statistics on the housing sales price index and land Transaction price index adjustment), the same time Vanke's average sales gross profit margin of 25%, The average net sales rate is 5%. In other words, the rise in the price of Vanke's sales gross margin contribution of 8%, accounting for its share of about 1/4; the contribution of house prices to Vanke's net interest rate is 7%, accounting for more than half of its share.　　In other words, more than half of Vanke's net profit is caused by rising house prices. "Such performance is a product of China's particular historical background over the past more than 10 years, and it is unsustainable." "Dingyuan bluntly," Enterprises in order to maintain the existing scale also have to put the earned and melted money back, the real estate business seems to always be a shortage of money, rather than a money-making person. The problem is even more serious for developers who prefer to hoard land. Dingyuan pointed out that the above "profit by inflation, growth by investment" model is based on the premise that house prices are rising. Rising house prices have increased the profits of real estate companies, and good profitability has given companies a "pass" for further financing in the capital markets.　　The new capital makes the enterprise expand rapidly, and the scale effect further contributes profits to the enterprise. By the policy positive, confidence recovery, and many other factors, combined with a large number of home purchase demand from 2008 to 2009 release, the real estate market in 2009, a significant increase in transactions, a record high. The annual commercial residential sales area of 853 million square meters, sales of 3.82 trillion yuan, compared to 2008 growth of 43.9% and 80% respectively, compared to 2007 respectively, the increase of 23.4% and 50.7%.　　In the whole year of 2009, real estate listed companies did not stop the pace of expansion, land reserve and refinancing plan is still regarded as the real estate enterprises have the core competitiveness of the important reference. The reporter has consulted several listed real estate company's annual report to discover, as of 2009, the Gold Land Group has obtained 18 new projects, newLand reserves of 5.23 million square meters, and in the year completed 4.1 billion yuan equity financing.　　At present, the company has a total of 43 projects in development, including those in the prophase planning. Poly Real Estate Also in August 2009 to achieve a private issue, financing 7.815 billion yuan, the company announced, "(this financing) to a greater extent to supplement the company's own capital, reduce the debt rate, as of the end of the year with money capital of 15.2 billion yuan, with a strong ability to resist risk."　　This year, Poly Real Estate has 102 projects under construction. Last year, China Resources land in the residential development business gross profit margin of 34.1%, and 2008 basically flat.　　By the end of 2009, China Resources Land Reserve capacity reached 22 million square meters in 21 cities nationwide.　　When the real estate companies are able to show their energy, we will go back to compare the above Vanke indicators, taking the Golden Land group and poly Real Estate as an example, the net profit and the net cash flow generated in the operation flow are still "positive and negative" distribution. In the long run, the real estate enterprise's current business model is only staged, the real estate enterprise's current profit can not truly reflect the real estate investment value. Whether it's buying a property or buying a real estate stock. "The so-called growth by investment, refers to the real estate enterprises continue to expand real estate projects, which also need to continue to blood transfusion, continue to issue additional." These projects do much more than they do, by accumulating greater risks in the event of an inflection point for future land or house prices. "In particular, when house prices fall, the market will also magnify the impact of the decline on corporate profits," Dingyuan warned. In the 2008, the enterprise once experienced such a dilemma. "As an independent director of a real estate company, Dingyuan said that the extreme means by which real estate companies are going to achieve profits is not to take part in the next stage of higher-priced land auctions. After that, the profits of the business will be gradually converted into cash. In the real estate bubble more blowing, so "inaction" is in virtually "solution set". For the continuous operation of real estate enterprises in the future market operation, they must change habitual thinking, in order to reduce the industry's systemic risk to the impact of enterprises. Dingyuan has three suggestions for enterprises: first, speed up the turnover of the project. There are currently reserved land projects to be developed and sold as soon as possible. Do not deliberately to predict land prices, and then cover the disk, adjust the development cycle, the future such a "forecast" will become very dangerous; second, the overall cost control of the grasp. When bidding on land, the developer should have the concept of cost, consider open margin of safety, and third, make differentiated market. At present, property with technical content and special concept is on the rise. Real estate projects, such as Low-carbon, health care and pensions, can avoid a homogeneous price war on the market.　　Enterprises can also give full play to their own strength, access to differentiated premiums, to enhance the loyalty of owners. Dingyuan also reminded individual investors, "we should be rational to face the market." The rise in house prices over the past 15 years does not necessarily mean that the future will rise. Future market demand for houses, or to return to the house is the consumer goods thisproperty. The reasonable price of a house as a consumer product is reflected in its rent pricing. The world's mature market, the real estate cycle of roughly 10, the current situation is not replicable in the future, but we do not realize that the risk has come. ”