Many Service Companies "Big Guys" Enter The Real Estate Sector &Nbsp; Crazy Profits Are Pushing Prices Up.

Recently, Chinese clothing brand

Lining was not the first to enter the real estate sector.

Why did the "big guys" who succeed in clothing and home appliances industry enter into the real estate industry? According to media reports, the profit margin of the general manufacturing industry is only 3% to 5%, while the gross profit margin of the real estate industry is at least 30%.

In a word, the real estate industry is tempting huge profits.

The nature of capital is profit seeking.

The author thinks that, in fairness, the "big guys" make money in their familiar fields, and then invest in the capital operation and invest in a profitable industry.

However, if clothing, household appliances and other manufacturing enterprises, especially the "big guys" enterprises, are scrambling to enter the real estate industry, there will be problems.

First, many non real estate companies enter the real estate market competition and will not lower housing prices, but will help increase house prices.

Because the land resources of building houses are limited, the "big guys" who are "not bad money" are pouring large amounts of capital into the real estate market, which will only further push up land prices, and may produce new "land kings".

Just imagine that land prices will not drop and house prices may drop?

Second, if the enterprise is rich, it should focus on its main business and engage in R & D and innovation. However, it has been chasing short-term profits and keen capital speculation. It may neglect the main business for a long time.

For example, overseas multinational appliance companies generally invest more than 5% of their income in R & D, but few Chinese household electrical appliance enterprises can achieve this standard.

Over time, Chinese household electrical appliance enterprises will only be less profitable and less competitive in the international market, and the industrial upgrading made in China will not be mentioned.

For our "big guys", when they complain about their industry, why do they not learn those well-known multinational companies, even in the fierce competition, they can hold their main business.

GE's capital strength should be more powerful than our "big guys", but in its 100 years of development, it mainly revolves around traditional manufacturing and energy industries, although in recent years, it has only a small part of its total assets in capital market.

In contrast, a domestic clothing brand listed on A shares, most of its profits come from real estate, and its clothing industry has made little profit in recent years.

The "big guys" have entered the real estate industry, and they also give the government a wake-up call again. The real estate regulation in China is still a long way to go.

The hot real estate industry is determined by the market, but hot is not equal to health.

The unhealthy real estate industry is hard to be healthy only on the strength of the market.

If we can not control the huge profits of the real estate industry from the source, if we do not give more tilt to the investment in industrial entities and hi-tech innovation from the fiscal policy, there will be more "big guys" in the real estate industry.