(Economic Observer) Why did Xu Jiayin say that "New Evergrande" is here?

　　China News Service, Beijing, March 31 (Reporter Pang Wuji) On the 31st, China Evergrande announced its 2020 annual results.

Xu Jiayin, chairman of the board of directors of Evergrande, announced the arrival of "New Evergrande" at the performance conference that day.

He explained that "New Evergrande" is actually Evergrande's transformation from a pure real estate business to a "multi-industry + digital technology".

Judging from the information released on that day, Evergrande’s framework for debt reduction and diversification has emerged.

　　Liabilities drop by 200 billion yuan

　　The performance data released on the same day showed that Evergrande achieved sales of 723.2 billion yuan (RMB, the same below) in 2020, an increase of 20.3% over 2019.

The turnover was 507.2 billion yuan, a year-on-year increase of 6.2%, and the net profit fell slightly to 31.4 billion yuan.

　　In terms of debt reduction, Xia Haijun, President of China Evergrande Group, stated that Evergrande’s interest-bearing debt has dropped by 200 billion yuan since the strategy of “high growth, scale control, and debt reduction” was put forward at the end of March last year. Strategic investment, the spin-off of high-quality assets and the listing increased equity by HK$88.8 billion, optimizing the liability structure.

　　At the performance meeting, Evergrande also announced the goal of reducing debt in the next three years: On June 30, 2023, interest-bearing debt will fall below 350 billion yuan.

In response to the "three red lines" regulatory requirements, Evergrande stated that it plans to reduce the net debt ratio to below 100% on June 30, 2021, and the cash short-term debt ratio will reach 1 or more on December 31, 2021, and December 2022 On the 31st, the asset-liability ratio was reduced to below 70%, fully meeting regulatory requirements.

　　Diversified industrial layout

　　In recent years, as the growth "ceiling" of real estate development business has gradually emerged, major real estate companies have explored "new growth curves" in addition to their main real estate businesses.

For example: Country Garden focuses on the layout of the robotics industry and claims that its construction robots and robotic restaurants are expected to achieve full profitability next year.

Vanke continues to increase investment in services such as elderly care, urban renewal, leasing, and logistics.

　　Evergrande’s goal is to transform from a real estate leader to a comprehensive enterprise group.

At present, in addition to the real estate business, Evergrande Group has eight industrial platforms including Evergrande Automobile, Evergrande Property, Hengteng Network, RV Bao, Evergrande Children's World, Big Health Industry, Evergrande Bingquan, covering clothing, food, housing, transportation, cultural tourism, and health care. And other fields.

　　Among them, Evergrande's car-building plan is the most interesting.

On the same day, Xu Jiayin said that Evergrande Motor plans to make trial production in the fourth quarter of this year and achieve a large number of deliveries next year.

It is understood that Evergrande Automobile has invested a total of 47.4 billion yuan, and will become the world's largest new energy vehicle group as its goal.

　　In addition to automobiles, Evergrande said that its RV trading service platform, RVbao, plans to go public at the end of this year or early next year.

At present, the platform has 21.29 million national broker members and 43,000 stores. It is expected that the transaction scale will exceed 2 trillion yuan this year.

A few days ago, Evergrande announced that RV Bao introduced strategic investors such as Hony Capital, CITIC, Zhongrong, and Chow Tai Fook, with a total investment of 16.35 billion Hong Kong dollars.

　　In addition, Xu Jiayin revealed that in order to achieve a fully closed industry of clothing, food, housing, transportation, health, tourism and entertainment, Evergrande bought back 49% of the equity of Evergrande Bingquan, and plans to go public in the next step.

　　Since the second half of last year, the real estate market has ushered in a series of heavy adjustments such as new financing regulations for key real estate companies (the "three red lines"), housing loan concentration management, and the "dual concentration" policy of land supply.

Industry insiders believe that this is an important sign of the end of the "great profit era" of real estate and its return to industry.

In this context, real estate companies have accelerated their pace of transformation.

Can the "New Evergrande" model successfully break through and start a new season of real estate?

The industry will wait and see.

(Finish)