Xiamen state-owned enterprise Jianfa is aggressive in acquiring land
2024-08-07
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
The desire for land and ambition for expansion are fully revealed.China Real Estate News reporter Xu Qian丨Beijing report
Under downward pressure from the market, most real estate companies are shrinking their investment fronts.According to data from the China Index Academy, in the first seven months of this year, the total sales of the top 100 real estate companies was 2.39 trillion yuan, a year-on-year decrease of 40%; the total land acquisition was 430.71 billion yuan, a year-on-year decrease of 38%, and the decline continued to expand by 2.2 percentage points compared with the previous six months. This is also the result of the "5.17 New Policy" in real estate.Even the top three real estate developers in terms of sales are shrinking their operations. In the first seven months, the amount of land acquired by Poly Developments and China Overseas Land & Investment dropped by 56% and 61% year-on-year respectively, and Vanke has "disappeared" from the list of the top 100 real estate developers in terms of land acquisition.However, the "C&D Group" still maintains a fierce momentum in the land market. The "C&D Group" owns two important real estate platforms, namely C&D Real Estate and Lianfa Group. In the first seven months, C&D Real Estate ranked first in both the land acquisition list and the new land value list, showing its desire for land and expansion ambition."The market environment has changed rapidly in the past two years, and each company is facing different pressures. The impression that Jianfa has left on the industry is like that of an 'engineering student', who works pragmatically from top to bottom and develops quietly." said a person close to Jianfa Real Estate."Currently, some real estate developers are relatively active in acquiring land, mainly because they have relatively abundant funds. These real estate developers mainly acquire land in core cities in urban agglomerations. In the past two years, the land parcels sold in these cities are relatively high-quality, and the future sales pressure is relatively small. Overall, the risk is not great." said a real estate researcher.The reporter called the relevant personnel of the brand department of Jianfa Real Estate to ask about the land acquisition and development strategy of the company. He said that the company almost never accepts interviews, and "the company still hopes to do what it should do well and focus more on products, services and sales."Land acquisition and expansion are "ferocious"The rapid expansion of Jianfa Real Estate is closely related to its background in Xiamen State-owned Assets Supervision and Administration Commission.C&D Real Estate, full name C&D Real Estate Group Co., Ltd., is jointly held by Xiamen C&D Group (a group 100% controlled by Xiamen State-owned Assets Supervision and Administration Commission) and its core listed platform C&D Holdings. Currently, C&D Holdings has two major holding subsidiaries in the field of real estate development, namely C&D Real Estate and Lianfa Group.According to the official website, C&D Real Estate holds controlling stakes in three listed platforms, namely C&D International Group, C&D Property Management Group and C&D Hecheng Engineering Consulting Co., Ltd.At present, the main business segments of Jianfa Real Estate include seven major business segments: real estate development, property management, urban renewal and transformation, commercial management, construction operation, engineering and design services, and investment in related industries. It involves a full-chain real estate business system covering everything from primary land planning, acquisition and demolition, construction to secondary real estate development, property, commerce, and then to hotels, elderly care, culture, technology and other related industries.Jianfa Real Estate's desire for land and scale was revealed as early as 2022.The national land auction market cooled down in 2022, but Jianfa Real Estate is still a frequent visitor to the national land auction market. According to data from China Index Academy, in 2022, Jianfa Real Estate's equity land acquisition amount was 54.4 billion yuan, ranking fourth, second only to China Resources Land, China Overseas Land and Poly Development; the newly added land value was 110.4 billion yuan, ranking seventh.Data from the annual report of China Development Bank International Holdings Group shows that as of the end of 2022, the company's land reserves were approximately 16.2 million square meters, with a total saleable inventory value of 250.1 billion yuan, of which 91% of the new land in 2022 was located in first- and second-tier cities.In 2023, Jianfa's land acquisition target has not decreased. Jianfa International's senior management said at the performance meeting at the beginning of the year that the company's land acquisition target in 2023 will definitely be more than that in 2022, and it is expected to achieve a cargo value of about 200 billion yuan, and sales will increase by 10% to 20%. "As long as the area meets the demand for improvement, we will work hard to strengthen the expansion."In 2023, Jianfa International, a subsidiary of Jianfa Real Estate, acquired a total of 78 projects, with a total value of approximately RMB 218 billion. The equity ratio of land acquisition was 73%, mainly distributed in core cities such as Shanghai, Xiamen, and Hangzhou. In the 2023 equity land acquisition amount ranking, Jianfa Real Estate ranked fourth, closely following Poly Developments, China Overseas Land and China Resources Land.Entering 2024, the "C&D Group" finally ranked first in the industry in terms of land acquisition amount. According to statistics from the China Index Academy, in the first seven months of this year, C&D Real Estate's equity land acquisition amount was 27.9 billion yuan, the new land value was 62.1 billion yuan, and the equity new value was 52.7 billion yuan, winning three first places in one fell swoop. China Resources Land and Poly Development ranked second and third with new land values of 57.1 billion yuan and 50.8 billion yuan respectively.However, year-on-year, China Construction Bank's land acquisition expenditure also shrank in the first seven months of this year, with the equity land acquisition amount decreasing by 25% year-on-year and the new land value decreasing by 37.6% year-on-year.Jianfa Real Estate's sales ranking in the real estate industry is also rising rapidly.In 2022, C&D Real Estate ranked among the top ten in sales; in 2023, C&D Real Estate ranked 8th in the industry with sales of 189 billion yuan. In the first seven months of this year, C&D Real Estate's sales were 72.97 billion yuan, ranking 7th in the industry; its brother company Lianfa Group's sales were 19.32 billion yuan. Adding the two performances together, C&D's total sales amount reached 92.29 billion yuan; there is still a gap of 24.5 billion yuan with China Merchants Shekou, which ranked 6th."It is quite difficult for us to determine the sales target for 2024." Lin Weiguo, executive director and CEO of Jianfa International, said at the performance meeting that Jianfa is currently adopting a strategy of considering and taking inventory on a quarterly and monthly basis, with an optimal sales target to move forward, but there is no way to set a full-year target.According to Lin Weiguo, although Jianfa has not set the growth target and land acquisition value in 2024 like in 2023, it is unwilling to give up its hard-earned position in the industry. Even if it does not advance, it will never retreat.━━━━
Jianfa needs to consider how to maintain its market share and stabilize the group's ranking in the industry, "and probably work towards this direction," said Lin Weiguo.In addition to large-scale land acquisition, mergers and acquisitions are also a magic weapon for enterprises during the period of rapid expansion. In June 2023, Jianfa Group bought 29.95% of the shares of Red Star Macalline Home Furnishing Group for 6.286 billion yuan in cash, becoming its controlling shareholder. Why did Jianfa Group take over Red Star Macalline? Some analysts said that an important reason was that they were attracted by the investment real estate owned by Red Star Macalline.As of the first half of 2022, IKEA operates 94 self-operated shopping malls, 280 entrusted shopping malls, 10 strategic cooperation shopping malls, and 59 franchised home furnishing and building materials projects, including a total of 475 home furnishing and building materials stores/industry streets, covering 30 provinces, autonomous regions,MunicipalitiesThe total shopping mall operating area in 224 cities is 22.27 million square meters.However, affected by the industry downturn, the value of these assets has also shrunk. The financial report disclosed that as of the end of 2023, the book value of Macalline's investment properties was 92.463 billion yuan, and the profit and loss from changes in fair value was -842 million yuan.The deterioration of IKEA's performance is also worthy of attention. The financial report shows that from September to December 2023, the "net profit attributable to the parent company" contributed by IKEA to Jianfa Group was -563 million yuan. The reason is that although the operating profit of IKEA's shopping mall leasing and operation business exceeded 1.4 billion yuan in 2023; IKEA made provisions for asset impairment and credit impairment according to the principle of prudence, lowered the fair value of investment real estate, and stopped some projects with lower-than-expected returns, resulting in non-operating expenses, totaling 3.161 billion yuan. After offsetting the two, the "net profit attributable to the parent company" was -2.216 billion yuan.In addition, how to deal with the high leverage problem that may be caused by IKEA's debt of more than 76 billion yuan has also become a difficult problem facing Jianfa.However, the real estate business, which Jianfa Group is proud of, is not profitable. Jianfa Group's 2023 financial report shows that the net profit attributable to the parent company achieved by the real estate business division is only 190 million yuan, a year-on-year decrease of 2.075 billion yuan.Among them: the subsidiary Jianfa Real Estate made an inventory impairment provision of 1.451 billion yuan based on the principle of prudence, realized a "net profit attributable to the parent company" of 4.468 billion yuan, and contributed a "net profit attributable to the parent company" of 2.05 billion yuan to the company's real estate business division, a year-on-year decrease of 0.25 billion yuan; the subsidiary Lianfa Group made an inventory impairment provision of 1.48 billion yuan based on the principle of prudence, and the real estate business realized a "net profit attributable to the parent company" of -1.781 billion yuan, and contributed a "net profit attributable to the parent company" of -1.858 billion yuan to the company's real estate business division, a year-on-year decrease of 2.05 billion yuan.The rapid expansion of Jianfa Group in recent years has also caused concerns about its funds. Perhaps realizing this, Jianfa Real Estate's aggressive strategy is changing: stable operation is more important, hoping to consolidate the basic skills of products and services.Editorial Board Member on Duty: Li HongmeiEditor-in-charge: Ma Lin, Wen Hongmei
Copyright by China Real Estate News
Reproduction and use in any form without authorization is prohibited
