Vanke’s sales performance in 2021 opened a corner. On January 6, Vanke announced the sales briefing for December 2021. From January to December last year, it achieved a total contractual sales area of 38.078 million square meters and a contractual sales amount of 627.78 billion yuan.
Under the overall pressure of the industry, Vanke’s annual sales also declined in 2021. At the same time, Vanke is paying more attention to security than ever before. In 2021, Vanke did not acquire land in first tier cities for the first time since 2000.
the sales in 2021 exceeded 600 billion yuan
Vanke actively controls speed
In 2021, the real estate market has cooled significantly, and even leaders such as Vanke have not been spared. Compared with 2020, Vanke’s contract sales area decreased by 18.42% and contract sales amount decreased by about 10.85% in 2021.
Vanke’s experience is not alone. From the perspective of some real estate enterprises that have announced their sales, the equity sales of country garden in 2021 was about 558 billion yuan, a year-on-year decrease of about 2.22%; The sales of relatively small real estate enterprises, such as Huaxiang holding and Jiangsu Zhongnan Construction Group Co.Ltd(000961) 2021, decreased by 5.31% and 11.8% respectively year-on-year.
“The real estate industry has started the mode of reducing speed and seeking stability. From the sales performance of real estate enterprises in 2021, the sales of many real estate enterprises have shrunk slightly compared with that in 2020, and Vanke is no exception.” Wang Xiaoyi, head of Zhuge housing search data research center, told the Securities Daily that in combination with the overall downturn of the industry in the early stage, Vanke’s sales performance in 2021 was not bad. Vanke has carried out strategic transformation since 2014, gradually balanced security and development, and strictly controlled the growth rate and scale of development business, Therefore, this achievement is more like the feedback of enterprise strategic transformation and Vanke’s own active choice.
According to Kerui data, the sales growth of large-scale real estate enterprises rarely showed negative growth in 2021. The annual cumulative equity sales amount of the top 100 real estate enterprises was about 8.88 trillion yuan, a year-on-year decrease of 6.0%. By the end of December 2021, the cumulative performance of nearly 40% of the top 100 real estate enterprises had decreased year-on-year, and the number of enterprises with negative growth in sales scale had increased significantly compared with 2020.
Kerry further judged that the current expected market bottom has not really come, the real estate market is still difficult to be optimistic in the short term, and the national commercial housing sales scale will enter an era of no growth. To a certain extent, this is consistent with the judgment of Yu Liang, chairman of Vanke’s board of directors, on the “shrinkage” of the industry. At the business exchange meeting in 2021, Yu Liang used the analogy between the home appliance industry and the sportswear industry to point out that the real estate industry expanded its watch in the golden age, and now there is no doubt that it should shrink its watch.
“The whole process of shrinking the table is to remove the financial dividend from the real estate industry, just like shrinking the bone and losing weight. The impact is very great and must be accompanied by suffering. Therefore, there will be pain when returning to normal. The pain is a very painful and painful process.” Yu Liang said.
At the first extraordinary shareholders’ meeting in 2021 at the end of November 2021, the management of Vanke said that it could not see the real estate trend in 2022 and lowered its minimum sales target in 2022, which would be lower than the target in 2021.
Zhu Xiaohong, President of China Luxury House Research Institute and urban operation expert, believes that Vanke is more realistic. The style of not fighting for the boss and being vigilant in times of peace has begun to take shape since 2016. The 2021 grade sheet is expected for Vanke, and Yu Liang’s style is still affecting the enterprise and even the industry.
investment tends to be cautious
no land acquisition in first tier cities in 2021
In November 2021, an internal document of Vanke, entitled “the proposal on” saving food and clothing “and creating a” wartime atmosphere “by the headquarters of Vanke Group, brushed the screen in the real estate circle. The document proposed to change the inertial thinking mode in the golden age, run the business philosophy through the whole process, subtract actions and expenses that do not produce value, and do great things with small money.
In terms of investment, Vanke seems to practice a similar sense of economy. In December 2021, Vanke’s new land equity premium was 2.855 billion yuan, accounting for only 4.49% of the contract sales of 63.56 billion yuan in the current month. According to the data of Shenwan Hongyuan Group Co.Ltd(000166) Research Report, from January to November 2021, the ratio of Vanke land to sales amount was 33.3%, which was equivalent to taking out one third of the sales to buy land.
In addition, according to the statistics of the company’s announcement, the reporter of Securities Daily found that Vanke’s land for bidding, auction and hanging in 2021 avoided the four first tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, which is the first natural year of zero land acquisition in first tier cities since 2000. In contrast, even in 2008, when it faced serious difficulties, Vanke still obtained some land in Shanghai and Shenzhen.
A person close to Vanke told reporters that among the three centralized land supply in 2021, the land price in the first round of land supply was more expensive in the first tier cities, so the company did not sell, and the latter two rounds of land supply were consciously controlled by Vanke. At present, Vanke’s strategy is to sacrifice speed and ensure safety.
Wang Xiaoyi believes that Vanke’s failure to acquire projects in first tier cities in 2021 is a timely adjustment made by the enterprise in combination with its own development strategy and market trend. The main consideration behind it may be the problem of risk preference. Vanke has gradually transitioned from the stage of pursuing low profit and scale expansion to benign development, and paid more attention to business robustness and project payment collection ability.
“Although there are many high-quality plots in the first tier cities, the ensuing competition will also increase, and the profit space of the project is limited, which is not in line with Vanke’s preference to a great extent, which will weaken Vanke’s determination to obtain land in the first tier cities.” Wang Xiaoyi said.
Zhu Xiaohong believes that Vanke land has always adhered to the principle of matching resources with product positioning and market positioning. It may be that most of the main urban areas of the first tier cities have entered the period of urban renewal. Now most of the land provided by the first tier cities is “remote and poor”, the value appreciation of the lot is slow, and it is difficult to find new growth points of the city.
At present, Vanke is more willing to develop business in first tier cities in the way of urban renewal. On December 17, 2021, Vanke announced that its subsidiary, Shanghai Vanke, invested 2 billion yuan to participate in the establishment of Shanghai urban renewal guidance fund with a raising scale of 10.002 billion yuan, focusing on urban renewal projects such as old city reconstruction, historical feature protection and rental housing in the urban area of Shanghai.
While avoiding first tier cities, Vanke has strengthened the layout of second tier cities. According to the statistics of Securities Daily, according to the city level division of the National Bureau of statistics, at least 37% of the land acquired by Vanke in 2021 comes from second tier cities, and the equity land price accounts for more than half.
Citic Securities Company Limited(600030) the research report points out that Vanke is more cautious when participating in local local auction registration. House prices are still in the decline range. Many cooperation projects of the company may have the problem that partners have financial difficulties and need to withdraw. It is reasonable to retain funds. In the medium term, Vanke will encounter new challenges in the first quarter of 2022, that is, whether to invest in expansion and M & A or continue to seek cash as king.
(Securities Daily)
