Biguiyuan: A Balanced Sample Of The Size And Profit Of The Housing Enterprises In The Downlink Cycle

In the vigorous wave of urbanization in China, it took only six years, and the country garden has achieved 700 billion from 100 billion.

At the same time, the net profit of Biguiyuan to the mother has increased from 10 billion to 39 billion 550 million, approaching the "net profit" of China real estate, more than Vanke, Hengda and many other leading companies.

Such a business miracle is built on Biguiyuan's insistence on urbanization strategy, strict control over asset turnover, financial safety and profits.

Since 2017, from the beginning of Hengda, high turnover Housing enterprises will focus on the pursuit of scale to pursue "scale plus efficiency". In the past few years, Biguiyuan has been the best in terms of scale and profit balance.

It is noteworthy that in the new stage of urbanization, the three or four line and four or five line property market in the non metropolitan area is facing contraction. The transformation of high technology to high cost will challenge the sustainable growth of the country's future net profit.

In this regard, Biguiyuan management said that the market in the low tier cities is not as bad as expected, and the company has rearranged the region. The company's abundant sales of unfinished resources and land reserves, as well as abundant handheld cash, will support future profit growth.

Double growth of scale and profit

When the impression of Biguiyuan is still on the high turnover, the company has quietly shifted its focus to the level of profitability.

In 2019, the growth rate of Biguiyuan sales slowed down by the market environment. The contract sales volume was about 552 billion 200 million yuan, an increase of 10% over the same period last year, a decrease of 21 percentage points compared with 2018.

But horizontally, the growth rate of Biguiyuan still leads the average of the same industry. According to Ke Rui statistics, the total sales volume of TOP100 Housing enterprises in 2019 increased by only 6.5%.

Although sales are slowing down, Biguiyuan still wins the championship, and the sales volume of the total caliber exceeds 700 billion for the first time, ranking first in the industry.

While the sales scale continues to be in place, Biguiyuan is committed to improving its revenue and profit levels.

In 2019, the company achieved a total revenue of about 485 billion 910 million yuan, an increase of 28.2% over the same period last year, a gross profit of 126 billion 640 million yuan, an increase of 23.6% over the same period last year, and a net profit of 39 billion 550 million yuan, an increase of 14.2% over the same period last year.

In the leading housing sector, the net profit of Biguiyuan to the mother is only 41 billion 600 million of that in the sea, and surpassed Vanke, Hengda, Longhu, and other housing companies.

In terms of growth rate, compared with similar head housing companies, the net profit growth of country garden is almost flat with Vanke.

Up to the end of the reporting period, the Yuan Yuan's sale of non VAT revenue was 715 billion 800 million yuan, locking the space for performance improvement in the next two or three years.

When the scale of real estate development to today, such as Vanke, Biguiyuan giant Housing enterprises, to achieve a balance of size and profits, it is not easy; at the same time, they have to achieve the ultimate financial security control.

Under the cyclical adjustment of the industry and the "black swan" under the epidemic situation, like Vanke, Biguiyuan has always been committed to raising the rate of repayment and stabilizing the cash flow.

In 2019, the rights and interests of Biguiyuan sold for about 530 billion 100 million yuan, and the rate of return on equity sales was as high as 96%, and the net operating cash flow was fourth times since 2016.

By the end of 2019, the cash balance of Biguiyuan account was 268 billion 350 million, which was the highest in the group's history, and the cash balance accounted for 14.1% of the total assets.

Biguiyuan also prudently reduced its debt ratio in the past year, with a net loan ratio of only 46.3%, down 3.3 percentage points from the same period last year. Although it is over 33% of Vanke and China shipping, it is also a lower level of industry, which is close to Huarun and Pauli.

By the end of 2019, the group's total interest bearing liabilities amounted to 369 billion 600 million (including banks and other borrowings, senior notes, corporate bonds and convertible bonds), of which the short-term interest bearing debt needed to be repaid within a year was about 116 billion 300 million, accounting for 31% of the total interest bearing liabilities, and the cash short debt ratio was 2.3 times.

Continue to watch the three or four line.

As the biggest beneficiary of urbanization in China, Biguiyuan is well versed in the logic of urbanization development, and is deeply aware that urbanization is entering the second stage, that is, entering the stage of urban agglomeration and metropolitan area.

Since the fourth quarter of 2018, Biguiyuan has constantly adjusted its regional structure, from the most fissile up to more than 100 regions, and gradually returned to 55 areas, in order to adapt to changes in the regional market.

Biguiyuan is still the most widely distributed City developer. By the end of 2019, Biguiyuan projects had been distributed in more than 200 prefecture level cities in 31 provinces (municipalities and autonomous regions) of the country, and the rights and interests of them were about 24181 billion yuan, of which 73% were located in five major urban agglomerations in China.

GDP accounts for 53.4% of the five major urban agglomerations and 40.6% of the permanent population. According to the survey, 50.9% of buyers are more likely to buy property in cities where resources are concentrated. Biguiyuan believes that these high-energy cities real estate market will also take the lead in the recovery after the outbreak.

In the past two years, the market has worried about the layout of the three or four tier cities in Biguiyuan, but the data provided by Biguiyuan showed that as at the end of 2019, the investment conversion rate of the three or four line city projects was 18 after 18 months, compared with that of the second tier cities.

Bank of China International data as of October 2019 showed that both the sales area and the average selling price of the low line cities outperformed the second tier cities. Biguiyuan has entered 193 low level cities, of which 92% of the cities are in shortage or in reasonable stock.

By the end of 2019, the rights and interests of the first tier cities in Biguiyuan could be sold for 290 billion 600 million yuan, the second tier cities were 614 billion yuan, while the three or four tier cities were as high as 797 billion 600 million yuan.

Biguiyuan management said that in 2020, the company's investment direction was to insist on occupying the three or four line, firmly sinking five or six lines, and carefully laying out a second line.

At the performance meeting in March 27th, Mo Bin, President of Biguiyuan group, said that the distribution of the group's ready to sell resources was in line with the trend of floating population. The rights and interests of the group could be sold at 97% of the region with a population of more than 500 thousand of the permanent population. 93% of the resources were located in the population inflow area, and 73% in the Yangtze River Delta, the Pearl River Delta and the Bohai rim region.

Mo Bin disclosed that the company has acquired or potential value added resources in the Wan Wan area totaling 637 billion 700 million yuan, of which the sale of equity resources in Shenzhen is about 21 billion 700 million yuan, leading the industry.

After sales of new homes reached 16 trillion peaks last year, the industry generally believed that the ceiling of development market has been reached, and diversification will continue. In addition, Biguiyuan has also established the "three carriages" business structure based on real estate, agriculture and robots.

Yang Guoqiang, chairman of Biguiyuan, has high hopes for the robot industry. Biguiyuan has entered the industry since 2018. First of all, it focuses on the development of construction robots. The existing 50 research robots are being built, of which 32 have been put into site testing, and the cost of R & D investment in 2019 is about 1 billion 970 million yuan.

Agriculture is another major direction for the transformation of Biguiyuan. In March 9, 2020, Biguiyuan agriculture became a shareholder of Huada agricultural holding company at a price of 300 million yuan to acquire 80% stake in Huatai agricultural Holdings Limited.

Yi Han think tank thinks that the reason why Biguiyuan chose agriculture and robotics as the breakthrough point is not only to see the market space of both, but also to cooperate with the real estate industry to create the whole industrial chain, forming an endogenous growth power, helping the company smooth the business cycle risk and continuously enhancing the company's comprehensive competitiveness.

Mo Bin said that the adjustment of the organizational structure of the group is based on the arrangement made by the market and other aspects. The new business in the future will also be completed around the main business, and finally the comprehensive strength will be improved.