Affected by the downward trend of the real estate industry, the real estate agency industry is experiencing severe cold.
Judging from the recent results of 2021 released by four top listed companies in the real estate agency industry Shenzhen Worldunion Group Incorporated(002285) ( Shenzhen Worldunion Group Incorporated(002285) . SZ), E-House enterprise holding (02048. HK), Hefu brilliant (00733. HK) and Beck, without exception, they all turned from profit to loss.
Among them, Shenzhen Worldunion Group Incorporated(002285) recorded a net profit loss of 1.129 billion yuan in 2021, compared with 110 million yuan in the same period in 2020; The holding loss of E-House enterprise was 8.893 billion yuan (the net profit in 2020 was 304 million yuan); Hefu brilliant recorded a net profit loss of HK $545 million (about 446 million yuan), compared with HK $155 million in the same period in 2020; The net profit attributable to the parent company of shell lost 525 million yuan (2.778 billion yuan in the same period in 2020). In other words, the losses of the four leading real estate agents totaled 10.992 billion yuan in 2021.
In this regard, Deng Haozhi, an expert member of Guangzhou Housing Association, analyzed and pointed out to the reporter of daily economic news, “The transformation of the agency industry from profit to loss is determined by many factors. First, it is closely related to the real estate industry. The sales of the real estate industry decline, and the sales received by the agency company decrease; second, due to the credit risk of some real estate companies, the Commission of the agency company can not be obtained, which is often referred to as bad debt. In addition, the diversified development of the agency company is not as expected. In the past few transformations, some agency companies tried to get from the gold Financial, long-term rental apartments and other fields seek the second curve, but it seems that the development is not ideal. “
The decline of the property market has affected the agency industry
The reasons for the change from profit to loss in 2021 are mentioned in the annual report of the above Xiangjia real estate agency enterprises, which are basically related to the impact of the upstream real estate industry. Generally speaking, it mainly focuses on “the decline of business scale caused by the decline of real estate market”, “the deterioration of credit of some real estate enterprises, resulting in the loss of accounts receivable”, “the decline of real estate market, resulting in asset impairment loss”, etc.
It can be said that the bad debt problem is an unavoidable “embarrassment” for the real estate agency industry. Shell mentioned in the annual report, “the management expense in the fourth quarter of 2021 was 2.202 billion yuan, compared with 1.884 billion yuan in the same period last year, mainly due to the increase in bad debt losses.”
Shenzhen Worldunion Group Incorporated(002285) mentioned in the annual report that the most important reason for the loss lies in the difficulty of capital turnover of a major customer, the overdue payment of commercial acceptance bills, and the financing difficulties and tight capital chain of some developer customers. The company analyzed and evaluated that there are obvious signs of impairment of its receivables. “The provision for impairment of various assets of the group in this year is 1.66 billion yuan, and the impact on the net profit attributable to shareholders of Listed Companies in 2021 is – 1.436 billion yuan.”
Specifically, in 2021, the revenue from Shenzhen Worldunion Group Incorporated(002285) agency sales was 2.401 billion yuan, a year-on-year decrease of 19.81%; The settled agency sales reached RMB 313479 billion, an increase rate of -18.43%; The settled agent sales area was 295965 million square meters, with an increase rate of – 13.63%; The average rate of agency fees is 0.77%, lower than 0.78% in 2020 and 0.8% in 2019.
A similar situation is also obvious in E-House enterprise holding. Among the three business sectors controlled by E-House enterprises, the revenue contributed by primary agency services decreased the most, with a year-on-year decrease of 38.3% to 1.976 billion yuan. In addition, due to the deterioration of the credit quality of individual real estate enterprise customers, the company expects the provision for financial asset losses (net of reversal) of credit losses to increase by 3765.7% from about 172 million yuan in 2020 to about 6.668 billion yuan.
The reason for Hefu brilliant’s loss is also the expected credit impairment brought by accounts receivable. In Hefu brilliant’s annual report, it is mentioned that “in the fourth quarter of 2021, due to the deterioration of the credit quality of some real estate development customers, the provision for the expected credit loss of the group’s accounts receivable increased by HK $306 million.”
Adjust development strategies to deal with the crisis
“For the agency industry, with the aggravation of the severe situation of the real estate market, the requirements for employees will only be higher and higher. Now we pay more attention to the professionalism of employees, such as being familiar with real estate, knowing how to recommend real estate and understand customer needs. In addition, we should know how to combine with the Internet, including online display of housing sources and online marketing, which is determined by the trend.”
Wang Yue, the person in charge of a company who has been engaged in real estate agency for many years in Guangzhou, told the reporter of daily economic news that now the sales channels are becoming wider and wider, and even developers are doing their own sales channels, which also reduces the market share of agency enterprises to a certain extent. Therefore, the agency industry must pay more attention to professionalism in the next few years from the king of channels.
For Liu Peng, similar feelings are more direct. Liu Peng, once a senior executive of a real estate agency, resigned and started his business in the middle of last year and moved to the short video platform as an agent entrepreneur.
“The agency industry is closely related to the real estate industry. Since last year, due to the continuous tightening of real estate financing channels, some real estate enterprises have fallen into business difficulties, which also has a great impact on the agency sales industry. It is common to postpone the settlement of commissions. It is after seeing this crisis (deeply bundled with real estate enterprises) that they have their own plans to start a business.”
Liu Peng told reporters that now the agency industry has entered the stage of professional ability. Compared with traditional brokers, they also have professional skills in real estate. What they want to do is to achieve greater transformation and liquidity with the help of video platform. For example, communicating with customers, locking houses, signing letters of intent and paying deposits, which were originally needed to meet offline, can now be completed online.
In fact, after the great changes in the property market since the second half of 2021, real estate agents have begun to adjust their development strategies, including optimizing business segments, controlling payment collection cycles, holding hands with central and state-owned enterprises, digital efficiency and other means.
In the shell annual report, the development strategy of “one body and two wings” is often mentioned. One refers to the “real estate trading track”, and the two wings are the home decoration track and Pratt & Whitney rental business. It can be seen that shell housing is not limited to the real estate transaction business, but has gradually developed the home decoration and rental business.
Shenzhen Worldunion Group Incorporated(002285) said in the annual report that it would adjust its business strategy, focus on accounts receivable and ensure the stability of cash flow. In the face of the increased market liquidity risk, the company took the initiative to adjust the organization and regional layout, and set up a collection system for accounts receivable. The effect of active collection was remarkable, ensuring the stability of the company’s cash flow. With regard to digital development, “actively explore and gradually implement digital transformation, fully integrate the ‘smart case field’ into the operation process and performance management, systematically improve operation efficiency and reduce transaction costs.”
E-House Enterprise Holdings has also made similar adjustments, which will abolish the problem projects in the original first-hand housing agency business sector, give priority to high-quality projects with guaranteed collection, and strictly control the collection accounting period. In addition, focusing on tmall Haofang’s digital marketing strategy, actively build a full chain platform for online and offline real estate digital marketing; Build an ecosystem of real estate digital solution platform around Kerui big data’s digital service strategy.
Hefu brilliant mentioned in the annual report that it will focus on maintaining stable real estate developers in the market, and further expand the business in Guangdong, Hong Kong, Macao, the Great Bay area, the Yangtze River Delta and other key regions on the premise of ensuring the basic stability of performance and income.
When it comes to the breakthrough of agency enterprises, Deng Haozhi believes that “for agency enterprises, there seems to be no big way out for short-term breakthrough. The only thing they can do is to minimize losses and survive the market downturn. For example, it takes a long time period to achieve new profit growth through diversification. At present, what agency enterprises can do is to reduce costs, increase cash inflow, improve main business income, etc.”
