Younger clothing brand invades the wealth path of real estate

More and more outsiders are trying to get involved or expand their place in real estate, despite the increasing competition and specialization of the real estate industry.

On November 26, the first marketization project of China Southern Airlines’s real estate project, “Pearl Nga Court” on Guangzhou Airport Road, held a grand foundation stone laying ceremony. The helicopter took off from Baiyun New City to perform an “air parade”, implying its entry into the real estate industry. "First flight." According to reports, the China Southern Airlines Group has already restructured its existing property and stock land of more than 40 companies belonging to China Southern Airlines, Singapore Airlines, and Northern Airlines, and gradually injected it into China Southern Airlines.

In addition to China Southern Airlines, Hainan Airlines, Eastern Airlines and other aviation groups have also established subsidiaries to run real estate business. It has become a trend for civil aviation companies to spin off real estate business and conduct professional real estate development. Another clothing and textile company that had stripped its real estate out of its main business, such as Youngor, re-entered the listed company in the listed company as early as in 2002. It was then confined to Ningbo and regionalized the Yangtze River Delta. expansion.

On November 28, Youngor announced that its holding subsidiary, Youngor Real Estate, won a piece of land in Ningbo City for 405 million yuan. This was after Younger acquired the Suzhou land plot of 1.45 billion yuan last year. Youngor again took the land again. When it comes to Youngor, it usually thinks of clothing. However, this leader in the apparel industry is also the real estate boss in Ningbo. In 2004, its real estate business was equal to its main business. "In the next two years, the contribution of its real estate performance to listed companies will certainly exceed that of the main business," said Gu Gang, a textile industry analyst at GF Securities. Under the leadership of Youngor, listed companies such as Red Bean, Veken Elite, and other textile and apparel products all entered the real estate market in different shades.

The direct reason for these lay invasions is to find a way for the large amount of spare cash in the hands. "Younger has more than 4 billion net assets, and it is impossible for it to grow indefinitely in an industry," said Li Rucheng, president of Youngor Group, two months ago. In addition, these industrial companies have their own land reserves. Therefore, the real estate industries that do not require a high level of professionalism usually become their choice. "As long as the intentions, resources and resources are available, any industry that enters real estate for three or five years can do a good job," said Quan Zhong, chairman of Chengquan.

In 2004, Youngor Real Estate's net profit reached 200 million yuan, while Gemdale's profit was only 246 million yuan. Perhaps, for them, the problem of specialization is not difficult to solve, and how to balance the diversification is the key to the contradiction such as the absence of prominent main business or the risk of real estate investment.

Resources

Most of the laymen entering real estate are the children of the rich and the land. Of course, there are also many accidental factors in and out, and that is how Youngor is.

In 1992, Youngor Real Estate was established. Between 1992 and 1995, it developed 67,000 square meters. Subsequently, due to macro-control, real estate development has stopped, but the land reserve is still there. "When it was listed on the market in 1998, real estate was still in a low tide, so the real estate was stripped out." Vice President Young Jiang of Youngor said in a phone interview with this reporter.

“In 1999, Youngor relocated the factory and started the original real estate business in the original factory area. It found that the sale was very hot and the profits were high.” Yu Gang just said that land prices in Ningbo have risen quite a bit in the past few years, and cheap land reserves have caused the gross profit of the real estate business once. Up to 40% more. In 2002 Youngor incorporated it into a listed company by way of acquisition. “Yorgor has become the leading garment industry year after year, and the apparel industry has limited market space for upward growth. There must be high-growth businesses to support the performance of listed companies. Otherwise, the stock price will fall.” At the same time, Younger must lay himself in Billions of funds on the books seek a way out.

The temptation of high profits of real estate and the pressure of growth in performance have driven these listed companies to diversify into real estate.

In fact, since 2002, real estate business has become the main source of growth for Youngor's performance. From 2002 to 2004, the performance of various businesses including clothing, real estate, and trade remained basically the same each year. In addition to the new textile business, Youngor's performance growth comes from real estate.

In terms of key land, these local companies have obtained some good land plots in the past few years due to industrial development, and they also have easier access to land due to good government relations. "Because Veken can place workers, the way and conditions for him to get the land are more favorable than pure developers such as Vanke," Quan Zhong said. In the Ningbo area, in addition to the textile industry, household appliances and mobile phone companies such as Oaks and Bird, etc., have also entered property development through their existing plant sites. Among them, Oaks is opening two projects.

However, compared with China Southern Airlines, these industrial companies have very little land reserve. China Southern’s real estate land bank is mainly concentrated in the surrounding areas of Guangzhou’s old Baiyun Airport and in several provinces in Northeast and Central China, “a total of several million square meters”. Wang Zhixiang, deputy general manager of China Southern Airlines Real Estate, told this reporter. Due to the relocation of Baiyun Airport and the planning of the Baiyun New City in Guangzhou, the old Baiyun Airport site quickly appreciated.

“The China Southern Group’s main business is air transport, but in the future, real estate and finance will be developed as an important non-core business of the Group. Therefore, China Southern Airlines’ real estate will be further enlarged. It is not enough to rely solely on the stock of land. The time is ripe and we will enter. The market has large-scale land acquisition.” Wang Zhixiang introduced Mingzhu Yayuan that China Southern Airlines had won at the Guangzhou City Land Auction at the end of last year.

“Money is not a big problem for China Southern Airlines. First, the strength of our partners is very strong; in addition, China Southern Airlines Group is a very good support. For example, China Southern Airlines Group has a financial company. We can make full use of the idle capital development within the group. “Wang Zhixiang said that an important goal of China Southern Airlines’ real estate industry is to revitalize the Group’s internal stock assets, including capital and land.

Follow and risk

The strategic shift of the industry leader tends to have a strong follow-through effect. “Youngor has always been a leading player in the apparel industry. After its annual report comes out, all companies in the industry will make a very careful interpretation.” Yan Gang said that in 2002, when Youngor’s acquisition of real estate, Red Bean had consulted himself whether he could also do real estate. , and also acquired a real estate company in the same year. In addition to real estate, Youngor’s other investment projects are also followed, such as thermal power projects. In March of last year, Youngor purchased RMB 68.1.10 million as a 50% stake in Ningbo Changfeng Thermal Power. In June, Veken's essence also established a joint venture with China Vanke Energy and other 10 million yuan in thermoelectric company.

According to incomplete statistics, almost one-half of the more than 60 textile listed companies in the Shanghai and Shenzhen A-share stock markets are involved in the real estate industry, including Shanshan, Shengxue, Jiangsu Sunshine and Jinlong. Even the seven wolves of the small and medium-sized board enterprises also participated in the auction of approximately 300 acres in Yanping District, Nanping City, Fujian Province in April this year.

Because profits are higher than those of the textile industry, these companies choose to work on their own rather than cooperate with professional developers, and because of their industrial origin, they are quite confident of their own cost management capabilities. “The people who do real estate work are basically made of textiles. They have strong learning abilities, and they have a good industrial background. They are relatively fine in terms of costs.” Quan Zhong said.

“Management personnel who operate Mingzhu Ngayuan are partly from the internal deployment of China Southern Airlines Group, and partly from market recruitment. In addition, we also cooperate with professional companies in some key areas.” Wang Zhixiang said, “The advantages of the stock of land in addition to us A part of the land can be obtained at a lower price, and at the same time, the team can be trained to gain experience through the development of these lands."

“However, their professional accumulation will take time. Perhaps it will be offset by the same amount as mature developers.” Although Youngor’s gross profit was about 41% in 2003, one of the reasons for its high gross profit is the low cost of land, and its gross profit in 2004. It dropped to 34%; while the gross profit of Hongdou Property was only 17.28%.

Jinlong Co., Ltd. is a typical case of failure due to specialized management. Since 2003, Jinlong has implemented a series of acquisitions and leaned toward real estate. In the semi-annual report last year, the company's main business income increased by 63.12% compared with the same period of last year, and its main business profit increased by 44.59%. However, the sudden increase in administrative expenses and financial expenses directly led to a 34.88% year-on-year decrease in net profit. In response to questions from investors, the company said that due to a series of mergers and acquisitions that occurred in the real estate industry, various expenses increased and profits declined.

Jiangsu Sunshine, which relinquished real estate and returned to its main business, said that the real estate sales situation is not good. The lack of competitiveness compared with large real estate companies such as Vanke and Shunchi is the main reason for its withdrawal.

According to industry insiders, besides financial strength and land factors, these followers failed because it was too late. Taken together, most of the successful laymen are now entering from 1997 to 1999. For example, Agile, which is preparing to list in Hong Kong, started in the furniture industry in 1985. In 1997, it entered the Guangzhou real estate industry with great efforts to attract talents and become a turning point. “Real estate is becoming more and more specialized, and the era of earning money by taking advantage of land has passed.” Jiang Qun said, and further deepening of macroeconomic regulation and interest rate hikes are expected to make the external environment of the industry worse.

Even if real estate is successful, such as Youngor, it is also facing industry risks. The limited increase in land costs and selling prices in the Yangtze River Delta region has weighed on its profit returns. At the same time, due to the obvious cyclical nature of real estate, and related to land reserves and capital conditions, these enterprises mostly regard it as a source of short-term profit growth, and for the time being they have not yet achieved the grand goal of a national real estate company. "A step by step, the current goal is to strive to become a regional developer of the Yangtze River Delta." Jiang Qun's answer is more conservative. Judging from Youngor’s current land bank of approximately 1.368 million square meters, Youngor, who is “deteriorated” in the absence of land, is only doing a three-year “granary”.

In addition, they focus on a certain area is also considered for its main brand radiation capabilities. "Younger's real estate brand is not necessarily used in other regions." A brokerage said.

Wang Shi publicly stated that he would not be optimistic about these invaders in the long run, and he would not treat these developers as rivals. It is possible that the first two projects will theoretically make money, but the profits will be reflected in the inventory. Once they encounter the cyclical adjustment of the industry, they will return to the main business. “New hope Liu Yonghao, also wanted to be a real estate king, but now there is not much to raise real estate.” An industry source disclosed, “Liu Jincheng New Investment in Chengdu invested 50 million in cash, profit of 50 million, but This 50 million are inventory assets."

Just this year, Wang Shi, who advocated specialization, also advised a domestic high-tech company listed in Hong Kong. The president of the company believes that he has already achieved the top three in the industry and has limited room for growth. At the same time, he believes that the threshold for real estate is low and the money is profitable. Wang Shi denied his idea: If you want to do both sides, you can't do both. If you want to do real estate, give up your main business.

The professionalization of the real estate industry and the improvement of brand awareness have enabled the bigwigs in the laymen to also choose to cooperate with professional developers to find the maximum profits. The cooperation between COFCO and Vanke last month. “Real estate needs professionals and professional experience to operate. If it is an experienced collaborator, we can successfully span the learning phase.” Wang Zhixiang said, “We will seek cooperation with domestic and foreign companies with professional backgrounds. Currently operating in China Good real estate developers, as well as some of the world's 500 real estate back companies, may be partners."

Reverse

When lay people with spare cash go to real estate, the lack of money insiders are turning to financial investment. Recently, it was rumored that Sunco Real Estate intends to acquire a professional insurance company within a few years. Shun Chi public relations department Han Yue denied this rumors, "We just apply for the insurance's dual-career qualification, and now we are still investigating the needs of our customers' insurance, even insurance has not been set down, not to take this step."

"Shunchi Real Estate entered the insurance industry because its stores could reach end customers and could sell its existing customers many times, including renovations, building materials, etc." Someone close to Sun Hongbin said, "The previous 45 million US dollars Venture capital is used in the real estate company itself, and the industry is also guessing where it will use the extra money.” Sunco China Holdings and Sunco Real Estate Network are two independent companies run by Sun Hongbin, and Sun Youyi lets two The company is listed on Hong Kong and Nasdaq respectively. Sunco China's financing was suspended for a while, and immovable property is expected to be listed at the latest in 2007.

In addition to the financing channels for listing, it is not impossible for outsiders to guess that they are cut into the insurance upstream by insurance agents because the insurance industry can provide stable cash flow for a long period of time. This is a good complement to developers with huge fund throughput. COSCO Group's shareholding in Ping An Insurance for 6 years has returned more than 400%; Shougang Co., Ltd. has participated in Life Insurance Life for 2 years, and owner's equity growth of 152.8% has provided a demonstration effect for laymen.

Among the insurance companies established this year, Beijing Zhaotai Property held 10% of Great Wall Life Insurance, Chongqing Real Estate Group and Singapore’s Great Eastern Life Insurance Co., Ltd. formed China Eastern New Life Insurance Co., Ltd.; and DuPont Property Insurance's real estate background is even more intense. Wang Liying, who owns 1 billion property, and Du Bangbang Assets, started from real estate. Zhejiang Huarui Group and Zhejiang Jihua Group, both of which are the four major shareholders of Duban, are real estate companies.