It Is Expected That Equity Sales Will Increase By 10% Annually In The Next Three Years, And Country Garden Has High Expectations For New Business

Affected by the new crown pneumonia epidemic in early 2020, the development process of domestic real estate industry has been restrained to a certain extent. With the continuous promotion of the real estate regulation policy here, there is no doubt that the real estate enterprises are facing a new development test, and those who have improved their corresponding ability before will have a more long-term and healthy development process.

On March 25, country garden released financial report, during the period, the company realized about 570.66 billion yuan of contract sales amount belonging to the company's shareholders' equity, with a year-on-year increase of 3.3%; under the background of strong assessment of the company's payment collection target, the equity return rate during the period reached 91%, which has been higher than 90% for five consecutive years.

During the performance conference held on the same day, Mo bin, President and executive director of country garden, pointed out that under the background of stable industry development, strengthened supervision and the existence of overall market development space, China's real estate industry has entered the era of management dividend, which requires real estate enterprises not only to strengthen their own resource endowment and operation ability, but also to closely follow the direction of national policies, observe market opportunities and shape The new driving force of enterprise development has shifted from scale development to high quality development.

The management is confident that in the next three years, it will record an annual increase of 10% in equity sales, and maintain a stable, sustainable and healthy development of various business indicators. In addition, the troika's development began to enter the fast track, Mo bin revealed that it is expected that in next year, its two major robot businesses will fully enter the profit period.

Benign growth of main real estate industry

According to the financial report, as of December 31, 2020, the sales amount of equity contract of country garden was about 570.66 billion yuan, with a year-on-year increase of 3.3%; the sales area of equity contract was about 67.33 million square meters, with a year-on-year increase of 8%, and the sales performance reached a new high. According to statistics, from 2016 to 2020, the compound growth rate of the company's equity contract sales amount reached 25%.

At present, the negative impact of the epidemic is gradually fading away, and the accumulated demand for house purchase has been released in succession. From January to February this year, country garden achieved a total of 86.86 billion yuan of equity contract sales, an increase of 61.33% year-on-year. Among the top ten real estate enterprises, country garden was the only one to achieve month on month growth in February, with a growth rate of 15.45%.

This is related to the rationality and fine management of the company's land reserve planning and deployment. Cheng Guangyu, executive vice president of country garden group, pointed out to reporters that the current layout logic of the company is also in line with the development concept of urban agglomeration proposed by the state in the "14th five year plan".

According to the analysis of Yihan think tank, the transfer of rural population to 19 "two horizontal and three vertical" urban agglomerations will be accelerated during the period of the "14th five year plan". Among them, Beijing Tianjin Hebei, Yangtze River Delta, Pearl River Delta, Chengdu Chongqing and the middle reaches of the Yangtze River in the "optimization and upgrading" stage will become the first batch of urban agglomerations with good absorption of population transfer.

Country garden has a deep layout in the Yangtze River Delta, Pearl River Delta, Bohai rim, the middle reaches of the Yangtze River and Chengdu Chongqing five metropolitan areas. By the end of 2020, 98% of the available sales value is located in the area with a permanent population of more than 500000, 93% in the inflow area, and 73% in the five metropolitan areas. The distribution of most goods conforms to the trend of population flow.

According to statistics, by target market in 2020, the proportion of sales amount of country garden's target first and second line and target third and fourth line is 46:54. Through the accurate monitoring of four kinds of inventory, average monthly sales area and average opening time of each specific city, it is found that 84% of the 245 third and fourth tier cities that it has settled in are in a shortage or reasonable state.

Behind the rationalization of reserve capacity, enterprises will be supported to achieve the sound development goals under the red line of policy. During the press conference, Wu Bijun, CFO and vice president of country garden, pointed out that "at present, the net debt ratio and cash short-term debt ratio of country garden have reached the standard, and the company's entire debt scale will gradually decline in 2021 and 2022, and we are confident that it will reach the standard and return to green before June 30, 2023."

This has enabled country garden to have sufficient development advantages in debt level and financing capacity in recent years. According to statistics, as of December 31, 2020, the total amount of interest bearing liabilities of the company decreased from 369.6 billion yuan to 326.5 billion yuan, a year-on-year decrease of 11.7%, and the average financing cost at the end of the period was only 5.56%, with a decrease of 78 basis points on a year-on-year basis, further reducing the financing cost.

During the reporting period, the net debt ratio of country garden was only 55.6%, which has been kept below 70% for many consecutive years. According to the statistics of the China Index Research Institute, the average of the top 100 real estate enterprises in 2020 is 94.6%.

According to the management's disclosure at the performance meeting, the company's newly promoted equity volume in 2021 is more than 700 billion yuan, plus about 260 billion goods brought in by the end of December, the annual equity sales volume is about 960 billion yuan, and the annual available resources are sufficient. Country garden will determine its output according to sales, and the annual de chemical rate is expected to be no less than 65%.

Zhongda Securities believes that country garden should have a reasonable layout, grasp the urbanization dividend, and achieve a steady growth in sales in 2020. Unique business strategies support the company's sales growth: in terms of layout, most of the company's goods value is in line with the trend of population flow; in terms of business model, the company's product strength has a significant advantage in the sinking market, and the excellent cost control enables the company to obtain more sufficient profit space than competitive products in the corresponding market. The unique business strategy also enables the company to achieve excellent market share.

Diversified business will enter profit cycle

The benign development of the main business is closely related to the promotion of country garden in management structure and organization training in recent years.

According to Mo bin, in 2020, country garden will be divided into 105 regions under the background of refined operation. "You may ask whether the management cost and the difficulty of management and control increase after the division into so many areas? I would like to tell you that fission is based on market capacity, management radius and regional operation capacity, and is conducted according to local conditions. At present, the effect is very good. "

He added that after the fission, not only did the various costs not increase, but also the control was more in place. Through the internal establishment of various sharing platforms, it can support the normal operation of financial data of each project, and constantly improve the subdivision platform, so as to lay a solid foundation for each project.

Based on these accumulated capabilities, country garden's new industrial forms based on the main real estate industry in recent years are also on the way to enter the profit cycle.

According to Mo bin, through two and a half years' efforts, bozhilin, a construction robot company, has 46 types of construction robots under research, most of which are commonly used in cast-in-place concrete technology and prefabricated building construction. Among them, 18 construction robots have been put into commercial application, and 28 are under engineering test. In the second half of this year, construction robots will be gradually mass produced, and we are confident that construction robots will be profitable next year.

Qianxi robot has 80 stores in operation, which are distributed in nine big cities in Dawan district. It is also confident that it will be fully profitable next year. According to reports, Qianxi plans to add five production lines in 2021, and it is estimated that the annual production capacity of all kinds of catering robots will reach more than 60000, with an annual output value of 3 billion yuan.

"The implementation and commercial application of construction robots will bring strong support to the main business. All of its businesses are based on the goal of "one-to-one". I believe that the new business will be successful. " Mo bin continued.

Agricultural companies have a more important mission. According to Mo bin at the annual report conference, country garden agriculture, which was established in May 2018, will speed up the research and development of the front-end seed industry and create China's "agricultural chip"; in the middle end, it will use the efficient production mode of "company + base + farmers" to lay out science and technology agriculture; at the market end, modern agriculture will combine with "biyouxun" stores to reduce the circulation of agricultural products and achieve the goal of "from field to field" of healthy food Dining table ".

Nowadays, country garden has laid out various new formats around the main business of real estate, and the advantages of the whole industry chain have been further strengthened, which has become the core competitiveness of enterprises that can not be copied. The rich industrial resources and the advantages of the whole industrial chain mean that country garden can quickly allocate, implement and integrate resources in a short time, so as to serve all aspects of the owners' life.

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