On March 29, 2022, the comprehensive strength evaluation results of real estate development enterprises were officially released, and the evaluation lists such as “top 500 comprehensive strength of real estate development enterprises” were announced. The evaluation work jointly sponsored by China Real Estate Association and Shanghai E-House Real Estate Research Institute has been carried out for 14 consecutive years, and the relevant evaluation results have become an important standard for comprehensively evaluating the comprehensive strength and industry status of real estate development enterprises.
The 2022 top 500 evaluation report on the comprehensive strength of real estate development enterprises released this time points out that the high turnover mode of the real estate industry has encountered a bottleneck. At present, the tide of default of real estate enterprises continues to break out, and it is difficult to improve the debt repayment pressure of most enterprises in the short term. With the change of the development logic of the real estate industry, enterprises need to change their path dependence, truly return to the product era and adhere to long-term ism. Real estate will still be an important ballast and pillar industry of China’s economy.
ranking: the industry has changed greatly
Vanke won the first place in succession
According to the evaluation research report, Vanke, CNOOC and poly occupy the top three in the comprehensive strength of real estate development enterprises in 2022. Among them, Vanke ranked first, CNOOC and poly ranked second and third respectively, and country garden, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , China Resources, Longhu, rongchuang, Jindi and Xincheng ranked fourth to tenth respectively.
Compared with 2021, the change rate of the list in 2022 is significantly larger. Among them, the change rate of TOP10 is 20% and that of Top50 is 26%. The ranking of real estate enterprises with excellent product quality and good financial cost control has improved significantly. The real estate enterprises with huge scale but liquidity problems declined more.
In terms of regional division, East China accounts for 38%, South China 21% and central China 15%, which has increased year-on-year; North China accounted for 17%, the western region accounted for 7%, and the northeast region accounted for 2%, which decreased year-on-year. The number of enterprises in East and South China accounted for nearly 60%, and the proportion in the central region increased slightly, and continued to maintain a good development trend.
scale: there is progress in the stabilization of leading houses
concentration trend decreases
In 2021, the average value of total assets of TOP500 real estate development enterprises was 91.678 billion yuan, a year-on-year increase of 10.47%, and the growth rate decreased by 6.17 percentage points compared with the previous year; The average net assets was 21.193 billion yuan, a year-on-year increase of 18.52%, an increase of 0.63 percentage points over the previous year. Overall, the total asset scale of the top 500 real estate enterprises maintained growth, and the growth rate decreased for four consecutive years after peaking in 2017. Net assets also maintained growth, and the growth rate remained stable in recent three years.
At the enterprise level, some leading real estate enterprises still maintained steady asset growth. On the other hand, in the second half of 2021, in the face of market cooling and financing tightening, some real estate enterprises had liquidity problems and were forced to sell some assets to alleviate their difficulties.
From the evaluation results, the sales amount of TOP10, Top50, Top100 and TOP200 accounted for about 30%, 65%, 83% and 92% of the sales amount of TOP500 respectively in 2021. Compared with 33%, 68%, 82% and 94% in 2020, the concentration trend of top 10 and top 50 real estate enterprises has decreased, mainly because some large-scale real estate enterprises are not included in the list or have a sharp decline in ranking due to debt risk.
risk: financing environment continues to tighten
debt repayment pressure is still high
In 2021, under the background of “no speculation in housing and housing” and “three red lines” and the policy of real estate loan concentration, the policy was tightened first and then relaxed throughout the year, and the financing of real estate enterprises showed a trend of continuous tightening on the supply and demand side.
Specifically, for the top real estate enterprises, the total financing of top 50 real estate enterprises in 2021 was 1054 billion yuan, a decrease of 2.34% compared with 2020. Quarterly, the first quarter of 2021 has the highest financing amount, about 325.8 billion yuan; The financing amount in the second quarter decreased by 8.76% compared with the first quarter. In the second half of the year, affected by the default events of some enterprises, the financing amount continued to decline. Especially in the fourth quarter, it was only 171.3 billion yuan, about 50% of the financing amount in the first quarter.
From the compliance rate of the “three red lines” of the top 500 real estate enterprises, the compliance rate of the asset liability ratio excluding advance receipts increased slightly in the third quarter of 2021, while the compliance rate of the net debt ratio and the cash short debt ratio decreased slightly. In the past two years, the overall debt repayment scale of real estate enterprises is still at a high level, and the debt repayment gap has a great test on the depth of the short-term capital pool of real estate enterprises. From the maturity balance of overseas bonds, real estate enterprises will still face great debt repayment pressure in the next three years.
The evaluation research report points out that the society is making continuous progress, and the real estate industry is no longer in an era when profit growth can be achieved only by improving the market scale and relying on the rise of house prices. In the stock era, there are fewer and fewer opportunities to make big money quickly, and sustainable and refined management has gradually become the mainstream. In terms of main business, we need to return to the product itself, intensively cultivate and continuously polish, find new marketing paths, and take into account the protection of people’s livelihood while controlling risks. On the second curve, the future real estate enterprises need to rationally choose the track and open up new profit growth points.
