Vanke responds to market concerns: It will not lie flat and will strengthen bottom-line thinking and thicken the safety cushion

　　Securities Daily reporter Li Yucheng

　　On March 29, Vanke held its 2023 results conference. Vanke's Chairman of the Board Yu Liang, President Zhu Jiusheng and other management attended the event. Yu Liang said that Vanke will intensify efforts to revitalize existing assets, real estate and other assets, and reduce interest-paying debt by more than 100 billion yuan in the next two years to ensure the company's safety. He believes that the capabilities the company has built in developing and operating services over the past many years will help Vanke become an outstanding company in the new development stage of the industry.

　　Judging from performance, the company achieved contracted sales of 376.12 billion yuan in 2023, maintaining its top two position in the industry.

　　In Yu Liang’s view, Vanke’s performance over the past year was remarkable. In terms of development business, Vanke continues to maintain its leadership position in the industry and has completed the delivery of 289,000 houses. At the same time, new investments have been highly realized, product capabilities have made great progress, and the basic capabilities of the development business are solid. At the same time, the company's operating business has maintained steady growth and formed a number of high-quality assets; the volume of large-scale transactions in 2023 will reach 12.3 billion yuan; REITs have also made breakthrough progress. Vanke may become the only company operating in three fields at the same time (commerce, logistics, Long-term rental apartments) companies that issue REITs.

　　"But to survive, business capabilities alone are not enough. We also need to strengthen bottom-line thinking and do stress tests under extreme circumstances." Yu Liang said that Vanke must be more fully prepared, have a stronger sense of crisis, and ensure safety. The pads are even thicker.

　　It is understood that Vanke plans to thicken its safety cushion by revitalizing existing assets and reducing leverage. The 2023 annual report shows that Vanke will realize the "reservoir" through bulk asset and equity transactions, and achieve transaction returns of no less than 30 billion yuan in 2024; at the same time, Vanke plans to reduce interest-paying debt by more than 100 billion yuan in the next two years, comprehensively Actively integrate into the urban real estate financing coordination mechanism and actively promote the transformation of financing models.

　　Faced with recent rumors about Vanke and banks and insurance companies, Zhu Jiusheng responded one by one at the performance conference.

　　"For a long time, Vanke has maintained good cooperative relations with banks, and there are 26 banks with which it has long-term cooperation." Zhu Jiusheng said that banks pay attention to three points: where the money flows, where the supported asset projects are, and whether the operating cash flow is sufficient. If you answer these three questions well, the bank's support attitude will be positive and the strength will be sufficient.

　　Talking about cooperation with insurance capital, Zhu Jiusheng said that Vanke cooperates with many insurance companies, and long-term and patient funds make Vanke more calm and resilient in operating its operating business.

　　"Currently, Vanke's financing is in a normal state. Objectively speaking, there is pressure, but Vanke will definitely be able to overcome this hurdle. There are currently three challenges related to financing. The first is the challenge caused by the imbalance of revenue and expenditure in the development business; the second is the financing model. The challenges brought by changes; third, the challenges brought by the layout of the entire operating business." Zhu Jiusheng said.

　　Part of Vanke's confidence comes from the support of Shenzhen's state-owned assets. Currently, Shenzhen State-owned Assets has four major measures to support Vanke: First, it helps Vanke dispose of low-liquidity real estate and long-term equity investments; second, it subscribes to consumer REITs of Vanke’s commercial unit SCPG through a market-oriented approach; third, it uses Shenzhen The industrial synergy between state-owned enterprises and Vanke has promoted cooperation on multiple projects; fourth, it is actively coordinating financial resources to support Vanke.

　　Yu Liang said that with the company's current capabilities, it will be able to create value for shareholders better and longer after starting operations lightly. Since the fourth quarter of last year, Vanke has received care and help from Shenzhen's state-owned assets, financial institutions, partners and market parties. Vanke is very grateful for the goodwill and support, and is also grateful for the criticism from the outside world. Vanke's management team will definitely not lie down and will cross this threshold to turn Vanke into a better company.