[ad_1]
Original title: Sales and gross profit decline by 100 billion yuan, Zhengrong changes “position”
Zhengrong Real Estate is going through an “acceleration period” of strategic adjustment. In 2020, Zhengrong Real Estate achieved contracted sales of 141.9 billion yuan, an increase of only 8.6% year-on-year, which is also its lowest growth rate in recent years.
At the same time, the problem of low gross profit margin has always been a problem for Zhengrong Real Estate. In 2020, Zhengrong Real Estate’s gross profit margin will continue to decline, from 20% in 2019 to 19.1%, which is lower than the industry average. Under the “new three-year strategy”, Zhengrong 100 billion has entered its closing year, but while optimizing financial indicators, how will it get out of the low gross profit margin dilemma?
Target sales growth rate of 150 billion fell to 6%
The financial report data shows that Zhengrong Real Estate will achieve contracted sales of 141.9 billion yuan in 2020 and complete the annual contract sales target. The accumulated contracted sales floor area is 8.9 million square meters and the average contract price is 15,949 yuan / square. subway.
As a representative of 100 billion real estate companies, Zhengrong Real Estate has maintained a relatively high sales growth rate before, but its 2020 sales growth rate is only 8.6%, which is also the fastest growth rate. low of Zhengrong Real Estate in recent years. A reporter from Beijing Business Daily reviewed the annual report and found that from 2017 to 2019, Zhengrong Real Estate’s contracted sales were about 70.1 billion yuan, 108 billion yuan and 130.7 billion yuan, respectively, with sales growth of approximately 78%, 54% and 21%, respectively.
As for the drop in sales growth, Zhengrong Real Estate attributed it to adjusting its development strategy. After breaking the 100 billion yuan scale, Zhengrong Real Estate proposed a “new three-year strategy” in 2019. The goal is to achieve high-quality development in the three dimensions of scale, profit and financial structure from 2019 to 2021. From the point of view of the moment, the changes in the sales growth rate of Zhengrong Real Estate are also in line with its “new three-year strategy”.
In 2021, Zhengrong Real Estate will continue to opt for a “conservative” attitude in terms of scale. It has set a new annual sales target of 150 billion yuan, an increase of less than 6% compared to 2020. In this regard, Huang Xianzhi, Chairman and CEO of Zhengrong Real Estate, revealed at the performance meeting: ” For scale growth, I believe it is enough to maintain adequate scale advantage. Zhengrong Real Estate still needs to adhere to high quality development, especially in the long term. “
Yan Yuejin, a real estate analyst, said that the 100 billion yuan scale is a threshold for financing real estate companies, so small and medium-sized real estate companies will reach one billion yuan. After exceeding 100 billion, the initiative to reduce speed is also to avoid the risks caused by high indebtedness, especially after the introduction of the “three red lines”, the active speed reduction strategy has been widely used.
Gross profit margin keeps falling
In terms of profitability, Zhengrong Real Estate achieved revenue of 36.126 billion yuan in 2020, an increase of 11% year-on-year; profit was 3.559 billion yuan, an increase of 15% year-on-year; main profit was 3.304 billion yuan, an increase of 18.9%, gross profit was 6.904 billion yuan, an increase of 6.3% year-on-year.
Although gross profit continues to grow, Zhengrong Real Estate’s gross profit margin will continue to decline in 2020, from 20% in 2019 to 19.1%, which is lower than the industry average.
However, the management of Zhengrong Real Estate did not respond to the decrease in gross profit margin at the performance conference that day. However, according to the previous management statement, “Because Zhengrong has processed a batch of high-cost old inventory, the gross profit margin of the inventory is low, which affects the overall gross profit margin. While resolved the old inventory problem will reduce development financing. Zhengrong’s gross profit margin should be kept in the range of 22% to 25%. “
Xie Yifeng, director of the China Urban Real Estate Research Institute, said cost spending is a central point of Zhengrong Real Estate’s misappropriation of profits. Nowadays, the real estate market has entered a mature stage, and large real estate companies are demanding dividends from management, which to some extent also shows that the aforementioned cost reduction is difficult.
This year’s stock sales rate is around 60%
In addition to the decline in gross profit margin, Zhengrong Real Estate’s capital ratio has always been “weak points” to be resolved.
At the performance conference that day, Zhengrong Real Estate also responded to the equity “cooperation” model. “The ‘cooperation’ model that Zhengrong Real Estate will continue to adhere to this year, but is currently in a period of adjustment and will continue to try to increase the capital share of the project in the future,” said Liu Weiliang, vice chairman of the board of directors of Zhengrong Real Estate.
According to Liu Weiliang, in 2020, more than half of the more than 40 parcels of land will be cooperative projects. In the future, Zhengrong Real Estate will try to choose two or three companies to cooperate. In addition, you also choose some companies with similar concepts and ideas to Zhengrong Real Estate Become a strategic partner. In 2020, the share sales ratio of Zhengrong Real Estate will increase to 55%, and the share sales ratio in 2021 is expected to reach about 60%.
Financial report data shows that in 2020, Zhengrong Real Estate will add 46 lots in 21 cities across the country, with an estimated total construction area of about 7.14 million square meters. Of the newly added land bank, 43% and 31% are in the two central regions of the Yangtze River Delta and the west coast of the Taiwan Strait, which have contributed a lot to Zhengrong’s sales.
From the perspective of the capital ratio of the newly added land, Zhengrong Real Estate has already taken action to optimize the capital ratio. In 2020, your capital ratio (by construction area) will be approximately 70%.
By the end of 2020, Zhengrong Real Estate has a land bank of 28.5 million square meters of construction area in 32 cities across the country, of which 82% is in first and second tier cities; The land bank equity ratio (by construction area) has increased from 55% at the end of 2019 to 58% at the end of 2020.
In the first half of next year, the “three red lines” fully meet the standards.
After the introduction of the “three red lines”, how to reduce the level of debt and achieve steady business growth has become the central theme of this year’s major real estate business performance meetings.
Speaking of the “three red lines” indicators, Huang Xianzhi said that in 2019, Zhengrong Real Estate proposed a “new three-year strategy”, which basically achieved the financial stability of the company. At the end of 2020, Zhengrong Real Estate’s net debt ratio continued its downward trend, falling to 64.7%, and the short-term cash debt ratio increased to 2.2 times. The two indicators successfully achieved the standard “three red lines” policy, and strive to complete the “three red lines” by the first half of next year. The “red line” met the standard.
At the end of 2020, Zhengrong Real Estate has cash and cash equivalents of approximately 35,478 million yuan (28,369 million yuan in the same period of 2019), promised deposits of approximately 610 million yuan (1,810 million yuan in the same period 2019). and restricted cash of approximately 6,885 million yuan (5,137 million yuan in the same period in 2019).
In terms of debt, at the end of 2020, Zhengrong Real Estate had a total of bank loans and other outstanding loans of 41,761 million yuan, compared with 36,317 million yuan in the same period in 2019; National corporate bonds and senior notes with a book value of approximately 25.523 billion yuan were in the same period in 2019. 22.348 billion yuan.
Beijing Business Daily Reporter Lu Yang and Wang Yinhao
