At the moment when the industry is in the period of adjustment, the relationship between real estate enterprises and intermediary agencies is also undergoing subtle changes.
Recently, Hefu brilliant (00733, HK; yesterday’s closing price of HK $1.41) announced that Poly Developments And Holdings Group Co.Ltd(600048) will no longer hold 43.9% equity of Hefu China, and Hefu brilliant will take over the corresponding equity. At the same time, both parties lift the commitment of non competition and Poly Developments And Holdings Group Co.Ltd(600048) will enter into a first-hand property agency business contract with Hefu or its member companies every 12 months for real estate projects with a property value of no less than 80 billion yuan for a period of five years.
This also means that the brilliant cooperation between Poly Developments And Holdings Group Co.Ltd(600048) and Hefu will move from equity connection to strategic cooperation. In addition, Hefu brilliant will sell poly consulting group to Poly Developments And Holdings Group Co.Ltd(600048) Poly Developments And Holdings Group Co.Ltd(600048) .
In an interview with the daily economic news, Hefu brilliant said that after optimization and adjustment, Hefu brilliant and Poly Developments And Holdings Group Co.Ltd(600048) will carry out nationwide business cooperation under the new cooperation framework to realize greater cooperation value between the two sides.
4 year integrated transformation
In 2018, Poly Developments And Holdings Group Co.Ltd(600048) injected all the interests of poly consulting group into Hefu China in exchange for 43.9% equity of Hefu China, and Hefu brilliant held 56.1% equity of Hefu China. On January 31, 2018, Hefu China was valued at HK $2.15 billion and poly consulting was valued at HK $1.68 billion.
At that time, Poly Developments And Holdings Group Co.Ltd(600048) promised to continue to appoint a property agent to sell the relevant properties, and poly consulting group or Hefu China will have the priority to be appointed as the property agent of the relevant property development projects on the same commercial terms.
Since then, poly investment consulting has expanded rapidly. The reporter of the daily economic news learned that, taking a place in East China as an example, poly investment advisers usually act as sole agents for poly projects, and only one agent company will be brought for projects that are not easy to sell.
As of 2020, Poly Real Estate Investment Co., Ltd. has successfully invested in nearly 100 cities in the Pearl River Delta and Bohai rim, and the data of Poly Real Estate Investment Co., Ltd. for short has been published, covering nearly 10 months in the whole country.
After this reorganization, Poly Developments And Holdings Group Co.Ltd(600048) will no longer hold any equity of Hefu China, and poly consultant will also be operated and handled by Poly Developments And Holdings Group Co.Ltd(600048) independently.
As for the reasons for the change of integration cooperation lasting for 4 years, Hefu brilliant said that the company and Poly Developments And Holdings Group Co.Ltd(600048) have made every effort to jointly promote the comprehensive integration of Hefu China and its subsidiaries (including poly Consulting Group). However, despite the above and based on the differences between the company and Poly Developments And Holdings Group Co.Ltd(600048) in business culture, organizational structure and operation mode, the company and Poly Developments And Holdings Group Co.Ltd(600048) failed to reach a comprehensive consensus on all aspects of integration (including the business, employee compensation and management system of Hefu China group and poly Consulting Group). In view of the slow progress of relevant integration and despite the continuous friendly cooperation between the contracting parties, the actual daily operation and management of Hefu China group and poly consulting group below the board level are still relatively independent, mainly affected by the culture and system of the company and Poly Developments And Holdings Group Co.Ltd(600048) respectively, which is similar to the business model before the cooperative restructuring in 2018.
From 2019 to 2021, the net profit after tax of Hefu China was 154 million yuan, 192 million yuan and – 397 million yuan respectively, and the net profit after tax of poly consultant was 259 million yuan, 152 million yuan and – 153 million yuan respectively. However, the income of poly consultants has continued to grow in three years, reaching 4.477 billion yuan in 2021.
After this restructuring, Hefu brilliant is expected to record an unaudited loss on sale (excluding taxes and expenses) of about HK $282 million.
focus on business cooperation
\u3000\u3000 “Considering the original cooperation model and the results achieved so far, we believe that most of the value of the cooperation has been obtained, and further integration will not create additional value or assist the group’s long-term strategy. On the other hand, by changing the cooperation model in the form of proposed restructuring, Hefu China group and poly consulting group can fully achieve growth value and explore new business synergies, such as property agency transactions.”
After dismantling the equity connection, Poly Developments And Holdings Group Co.Ltd(600048) and Hefu brilliant have a new cooperation mode.
According to the announcement, Poly Developments And Holdings Group Co.Ltd(600048) has promised the Hefu contractor that it will enter into a primary agency business contract with the Hefu contractor or its designated member company of the group for the real estate development project with the saleable property value of no less than 80 billion yuan every 12 months (depending on the actual value agreed in the relevant sales agency contract between Poly Developments And Holdings Group Co.Ltd(600048) or its designated subsidiary and Hefu China or its designated member company of the group), For five years.
In terms of property agency transactions, Poly Developments And Holdings Group Co.Ltd(600048) may appoint Hefu contractor as the sole agent, or Hefu contractor and another agent as the joint agent to sell the properties of Poly Developments And Holdings Group Co.Ltd(600048) the real estate development project Poly Developments And Holdings Group Co.Ltd(600048) the type of real estate development projects for property agency transactions will mainly be residential projects.
Poly Developments And Holdings Group Co.Ltd(600048) responded to the reporter of the daily economic news that in view of the complex and changeable situation of the real estate industry, the shareholders of both sides believe that adjusting the cooperation mode is more in line with the current market characteristics, can promote real estate sales and is more conducive to their respective development. Therefore, both shareholders reached a consensus to change the cooperation mode and focus on business cooperation.
Since the establishment of the owner’s agreement, the property transaction value of Hefu China providing such property agency services to Poly Developments And Holdings Group Co.Ltd(600048) from 2019 to 2021 is about 13 billion yuan, 11 billion yuan and 13 billion yuan respectively.
Hefu brilliant told the reporter of daily economic news that the cooperative relationship between Hefu brilliant and Poly Developments And Holdings Group Co.Ltd(600048) was adjusted from equity cooperative relationship to strategic cooperative relationship at the group level. In the future, Hefu brilliant will give full play to its advantages and market competitiveness in corporate culture and operation mode, and provide more focused and efficient professional services for major real estate development enterprises and partners in China in a more open and comprehensive manner.
In today’s market environment, business cooperation may be a better way than equity cooperation. E-House China recorded a loss of about 9.2 billion yuan to 9.6 billion yuan in 2021. Shenzhen Worldunion Group Incorporated(002285) it is estimated that the net profit attributable to shareholders of Listed Companies in 2021 will be a loss of 850 million yuan to 1.25 billion yuan. Rongchuang sold shell stocks in 2021. It is expected that the sale will record a pre tax loss of about RMB 5.63 billion in 2021.
According to the annual report of fiscal year 2021, Hefu brilliant achieved revenue of HK $7.166 billion, a year-on-year increase of 15.72%; The loss attributable to the owners of the company for the period was HK $545 million and the profit for the same period last year was HK $184 million. In its annual report, it said that due to the operating difficulties of many large developers of the partners and the great increase in the difficulty of obtaining the group’s Commission, the annual performance and income can not be avoided to be seriously affected.
“Due to the deterioration of the credit quality of some customers engaged in real estate development in the fourth quarter of 2021, the group made additional provisions for the expected credit loss (expected credit loss) of its outstanding accounts receivable, which also affected the overall performance of the group. Therefore, the provision for the expected credit loss of accounts receivable increased by HK $306 million.”
