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Wen Brigade Is Not "Making Quick Money".

2019/12/1 16:02:00 0

Quick Money

"The era of high turnover has passed, and the past experience and models will be used for investment or products in the next few years, which is not logical and common sense, and the probability of success will be reduced." Song Yanqing, President of lander consulting, believes that the logic of the development and operation of Wen brigade products and traditional residential products is completely different. For real estate enterprises, changing their concepts is the biggest challenge.

A person in charge of a large housing company in Beijing said to the twenty-first Century economic report that there are even some differences between Wen's business and real estate business. For example, the real estate business pays attention to high turnover, while Wen travel is a typical slow turnover; real estate business is a heavy asset; tourism business is best to do light assets; real estate business has a higher demand for sales, and pays attention to "making quick money".

He said that it takes time to completely transform ideas, and sometimes the profit margin of Wen brigade project is not as good as real estate.

From the perspective of business models, large investment volume and long cycle of return are the biggest characteristics of Wen brigade project. At the same time, the complexity of the tourism business in planning, design, construction and so on is far higher than that of real estate.

As early as in December 2015, Nie Heping, general manager of Wanda city investment company in Chengdu, once said in an interview with the media that the difficulties in project development are mainly reflected in the long construction cycle, large scale and difficult development rhythm. "In the short term, even if we can figure out all the properties available in Chengdu Wanda City, the investment of 55 billion yuan will not be able to break even. In the long run, it will take at least 15 to 20 years to bring in the rental of the property and the income from the amusement park.

He also pointed out that there are two biggest difficulties in Chengdu Wen Li Cheng: first, the difficulty of construction. The project is equipped with the most advanced equipment in the world. Therefore, there are great difficulties in procurement, installation and technology. The two is the difficulty of real estate development, which is embodied in the long construction cycle, large scale, difficult to grasp the pace of development, and convergence with the market.

Because of this, the real estate enterprises often adopt the mode of "supporting property and supporting cultural tourism". Specifically, "real estate is the first step to promote the subsequent development and operation of cultural tourism projects, and then enhance the overall value of the region through the operation of cultural tourism projects."

"In the early stage of the operation of Wen brigade project, it is very necessary to support the cash flow of real estate." The housing companies said that even in the early days of the project, medical, pension, service and other investments also needed real estate support. Unless the light assets operation is done as far as possible, otherwise the capital investment in the early stage is relatively large.

He also said that if there are more cultural tourism projects, the investment cycle in the early stage will be relatively long. In view of the characteristics of the travel industry, it is unrealistic to expect the rapid growth of the travel business and even become the main business.

It is learnt that even in the field of culture and tourism, and has achieved some success in housing prices, it is difficult for Wen brigade business to occupy the main body of the company's revenue.

After the listing of new Hualian, it accelerated the transformation to Wen brigade, hoping to get out of a "ancient town +" tourism development road, once known as one of the most resolute and thorough tourism companies in the transformation of listed companies.

Today's new Hualian looks like it has changed from a traditional housing enterprise to a diversified business of "Wen Lu + real estate + finance". By 2019, the company's flag industry has included the ancient town of Tongguan kiln in Changsha, 4A scenic area, Anhui Wuhu Wuhu Town, Xining New Hualian children's Dream Park, Sichuan scenic spot, Sichuan Langzhong ancient city and so on.

But financial data show that in 2018, the new Hualian revenue scale was 14 billion, of which sales of commercial housing sales accounted for 11 billion 350 million, accounting for 81.1%. Despite the constant emphasis on transformation, the real estate business is still the main support for the company from its revenue contribution and cash flow contribution.

Another overseas Chinese housing company, which is deeply ploughed in the cultural tourism field, has a 28 billion revenue in real estate business in 2018, accounting for 58% of the total revenue of the company. The first half of 2019, Oct's real estate business revenue accounted for 68%. Over the years, real estate has been the main source of revenue for OCT, and tourism revenue has not exceeded 50%.

Yan Yuejin believes that real estate is a policy oriented industry, housing companies tend to diversify in the choice of capital into the field of policy support. He believes that housing companies have invested in the field of tourism, and do not exclude speculative elements. But if we return to business logic, our travel business can not become the main support of real estate companies.

He also pointed out that with the real estate market entering the downlink period, the protection of capital chain has become the first choice for enterprises. In this context, whether the real estate enterprises can be patient and continue to invest more in the tourism business is worth further observation.

 

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