"This year is particularly difficult. This is also the most stressful period of time since I started my career. The hardest thing is when I handed over our transcripts to everyone at the end of March, the pressure was very high."
On the afternoon of June 28, Vanke A (SZ000002, stock price 18.45 yuan, market value 214.488 billion yuan) held the 2021 Annual General Meeting of Shareholders in Shenzhen.At the meeting, in the face of the current real estate market situation that investors are most concerned about, Yu Liang, chairman of the board of Vanke, said that the short-term real estate market has bottomed out, and the market recovery is a slow and gentle process, and recovery will still take time.
In the past few years, Vanke has paid a lot of tuition fees and costs to explore diversified track businesses at the same time.Yu Liang believes that operating service businesses such as property, logistics, commerce, and long-term rental apartments will constitute Vanke's future growth space.
"What does the industry need today? The industry needs confidence, and there is no need to be vigilant." Yu Liang, who used to be good at alerting the industry in the past, hopes to convey confidence to the industry this time.
"The most stressful phase is over"
Confusion is still the norm in the environment of industry uncertainty and low confidence in the capital market.
Yu Liang, who is often a bell ringer and prophet, hopes to send a clear message to the industry this time.He shared a set of industry data-although the industry has experienced a difficult time in the first half of this year, according to the statistics of public online signing data in various places, the sales area of commercial housing in major first- and second-tier cities decreased by 36% year-on-year from January to February, and year-on-year in April. It has dropped by about 60%, but the situation has improved in May, and the month-on-month increase has increased significantly since June.
Yu Liang believes that the short-term market has bottomed out, but it is not a rebound, but a recovery.Market recovery is a slow and gentle process that will still take time.Although the month-on-month increase in June was obvious, it still fell year-on-year, but the decline was relatively narrow.More importantly, the current real estate market environment is different from the past.
In other words, the most stressful stage has passed, and now it is at least a little better than at the beginning of the year, both for the industry and for Yu Liang personally.
"This year has been very difficult. This is also the most stressful period of time since I started my career. The most difficult thing was when I handed over our transcripts to everyone at the end of March, and the pressure was very high." Yu Liang said.
The life of the industry is very difficult, but he believes that in the society, the real estate industry must not be the most difficult one, so there is no reason to lie down.As long as an enterprise can serve its most important customers and make good products and services, it can still survive.
In 2021, Vanke will achieve an operating income of 452.8 billion yuan, a year-on-year increase of 8.0%; the net profit attributable to shareholders of the listed company is 22.52 billion yuan, a year-on-year decrease of 45.7%.This is Vanke's third net profit decline since its listing in 1995 and 2008.
The focus of Vanke's work this year is to stop falling and stabilize, and improve while maintaining stability.In the main business of real estate development, Vanke has further optimized its investment mechanism this year, and the improvement of investment targets is expected to play a relatively supportive role in its future performance.
"We had an estimate for the market downturn at the beginning of the year or in March, but we didn't expect it to be so severe." Zhu Jiusheng, president of Vanke, said that Vanke's sales from January to May fell by about 41%, which was slightly stronger, but there were also better performances in the industry. Good business, this does create a bigger challenge.For Vanke, all the difficulties were taken into consideration, and some arrangements and arrangements were made in advance. At present, it has only increased the difficulty of the work. It will use more active sales and more specific measures to fulfill its promise to stabilize its performance this year.
The industry needs confidence to move forward
In the past many years, Vanke has been good at being a pessimist and an anxiety teacher in the industry. From another perspective, this is called a sense of urgency, such as the "survive" in 2018 and the "black iron age" at the beginning of this year.
Yu Liang explained at the shareholders' meeting why Vanke always acted as a child who said "the wolf is coming" at an inopportune time. He hoped to adhere to the strategic determination of "no greed and no fear", that is, to stay awake in good times. Have faith in bad times.
"When the market is good, we know that we need to stay awake and not to earn the last copper plate. How can there be no opportunities in this 10 trillion-level industry in the future? We need to find opportunities by ourselves."
Why does Vanke seem more optimistic now?Yu Liang pointed out that people sometimes have different perspectives on the same thing. Whether it is using alertness or pressure, the goal is to make the enterprise better.Today, the industry needs confidence and needs to move forward.At this time, market sentiment has also become very important, as long as there is a glimmer of light, it is the bright spot to move forward, so we need to explore the good side more.
A single residential development can no longer meet the requirements of the times, but the diversification of business cannot currently be equal to the contribution of residential development.Yu Liang said that the structure of Vanke's development, operation and service sector should not undergo major changes in the future. Industries such as logistics and property have a limited market size. If these operation and service sectors account for a large proportion of operating income and profits in the future, it is necessary to challenging.
Except for property, Vanke's diversified business has not been clearly reflected in the financial statements.Zhu Jiusheng pointed out that Vanke will achieve profitability in the logistics business this year, and the long-term rental apartment business has achieved profitability at the cash flow level this year, and is expected to achieve profitability at the accounting statement level next year.
In addition, Vanke's Wanke Cloud has submitted a prospectus on the Hong Kong Stock Exchange. In 2021, Wanke Cloud will achieve operating income of 23.704 billion yuan, a year-on-year increase of 30.6%; gross profit is about 4.02 billion yuan, and net profit is about 1.714 billion yuan.
Yu Liang believes that in addition to the relationship between revenue and profit, a business also has a relationship between market value and social needs.At the beginning of the year, he also called on institutional investors to establish a new valuation model for the above-mentioned operating service business and see the new market value of Vanke.
