Our reporter Wang Lixin

　　As of April 6, taking the 2021 financial reports (including unaudited performance) of 25 listed real estate companies that have entered the "100 billion yuan club" (calculated by full-caliber sales) as a sample, the "Securities Daily" reporter found that , China Overseas Land, China Resources Land, Longfor Group and other 6 companies have net profits attributable to shareholders of the parent company of more than 20 billion yuan.

Among them, 5 companies of Longfor Group, China Resources Land, Greentown China, China Jinmao and Jinhui Holdings increased year-on-year in this indicator, while the remaining 20 companies all fell.

　　"In 2021, the 'increase in revenue but not profit' of the top 100 real estate companies will become more and more serious. The average net profit margin and return on equity will be 9.8% and 8.1%, respectively, down 2.2 and 1.8 percentage points from 2020." China Index Research Institute Liu Shui, head of research at the Enterprise Division, told the "Securities Daily" reporter that high land prices and de-financialization of real estate limit the profitability of real estate companies. In the next 1 to 2 years, the industry may still be in an era of declining profits.

　　Gross margin down to 20%?

　　When "shrinking the balance sheet and clearing it out", the "scale theory" in the real estate industry is no longer applicable, and the real estate enterprises that are "bigger but not stronger" have fallen into a liquidity crisis.

At the time of the industry downturn, after review, reflection and review, the helm of the real estate company began to realize that the era of the real estate industry relying on "radical" high leverage to drive development has ended.

　　Compared with the previous performance briefings, the "sales target" was the protagonist. This year, the "all-good" leading real estate companies are all releasing a message: profit-oriented, cost reduction and efficiency increase, profit instead of scale as the KPI assessment target, investment The land acquisition is based on the IRR (internal rate of return) as the criterion, and the non-building business is used to dig a profit reservoir.

　　Behind the release of this information is the in-depth inspection brought by the decline of the industry's profitability to the level of the manufacturing industry after the land and financial dividends have faded.

　　Taking the 2021 financial report data as a sample, the gross profit margins of the above 25 real estate companies all fell, ranging from 0.01 percentage points to 17 percentage points. Even China Overseas Real Estate, known as the "profit king", fell by more than 6 percentage points; Based on the industry consensus of 25% gross profit margin in the past, only 7 companies including Longfor Group and China Overseas Real Estate have crossed the red line. If the gross profit margin red line is reduced to 20% (the industry consensus is the "new red line"), there are 14 real estate companies. over the line.

　　Looking back at the average profit margin data of the real estate industry in the past three years, according to the statistics of Sinolink Securities, from 2018 to 2020, the gross profit margins of real estate companies were 28.77%, 26.96%, and 23.35%, respectively, with the decline expanding year by year.

Judging from the currently released 2021 performance announcement, the average gross profit margin is 18.74% and the average net profit margin is 8.21%; while the gross profit margin level of the manufacturing industry in 2021 is 20.53% and the net profit margin is 7.96%.

　　The prejudgment of jumping over the "Bronze Age" and entering the "Black Iron Age" may be based on this.

Therefore, after handing in the report card that the net profit attributable to the parent was almost halved, Yu Liang, chairman of the board of directors of Vanke, spent 28 minutes reflecting and analyzing at the performance briefing.

At the same time, Vanke's gross profit margin also dropped to 21.8%, which has just crossed the new red line.

　　"Everyone has a consensus that the gross profit rate will return to about 20% or more." Li Xin, president of China Resources Land, said, "Every company's situation is different, but the target for the gross profit rate is not much different. 30% or more is unlikely."

　　"In 2021, the overall gross profit margin of Longfor Group will be 25%, and the real estate development sector will be 23%, which is relatively high in the industry. In the next 1 to 2 years, the projects acquired when the land market is hot in 2017 and 2018 will be settled one after another. It is expected that the gross profit margin of real estate development will remain at 20%, and the overall gross profit margin of the group is expected to remain at 25%." Chen Xuping, CEO of Longfor Group, told the "Securities Daily" reporter that if the land market is highly leveraged and continues to acquire land with lower prices In the case of the block, the gross profit margin of the real estate sector may be repaired in the future.

　　"In the past, the KPI of professional managers' investment in land acquisition was determined by 'quantity', maintaining the right to speak in scale first, and investment quality as secondary, even if the net profit margin was 2%, they still had to take the initiative to acquire land, resulting in insufficient financial risk control and short-term Insufficient solvency, resulting in more than 40 '100 billion yuan housing companies', with a market value exceeding 100 billion yuan but less than one-third." An insider in the investment and expansion line of housing companies told the "Securities Daily" reporter that after this A round of realistic impact and review, how high efficiency, how much profit and how much market value one dollar can generate is a new issue that the helmsman has to think about and face.

　　Where is the support for future valuations?

　　Judging from the current structural adjustment measures on both sides of supply and demand, development is still the main business of most real estate companies at present, and it still plays a decisive role in the profit pool. To develop a new development model of real estate within the scope of and ability circle cannot support "quality development".

　　Two prerequisites are very important. First, the urbanization rate will rise to 64.72% in 2021, and the sales of commercial housing will be 18 trillion yuan, which may have hit the ceiling. ”; Second, although there will be fewer players in the end, if the core still develops according to the old gameplay of “speed as the scale addition, leverage as the multiplication”, it will eventually “retire” from the blue-chip camp, and the valuation will not be able to obtain sufficient investors. Approved.

　　Based on the closing price on April 6, the total market value of 7 A-share and H-share real estate companies exceeded 100 billion yuan, Vanke A was 246.7 billion yuan, China Overseas Development was 234.1 billion yuan, China Resources Land was 225.7 billion yuan, and Poly Development was 225.7 billion yuan. 219 billion yuan, Longfor Group 211.7 billion yuan, China Merchants Shekou 129 billion yuan and Country Garden 122.1 billion yuan.

　　According to the observation of a reporter from Securities Daily, housing companies with a market value of 200 billion yuan have four common characteristics: First, they are financially stable. The second is that the proportion of non-real estate development revenue is gradually increasing, and its high gross profit margin increases the company's profitability; third, the land reserves are mostly concentrated in first- and second-tier cities; fourth, the rating is stable and the PE multiple is high.

　　From the perspective of the industry, like the real estate companies such as Longfor Group, China Resources Land, and China Overseas Properties, the diversified businesses centered on non-real estate development business have become stronger and entered the harvest period, becoming a stable source of cash flow for the group, and its sub-sectors Most of the "tuition fees" have been paid, the business model and its replicable model have been run through, and the ability to explore new development models of real estate has been established. This is not only planning for the future, but also starting from the concept of long-termism, and using strategic determination to train through cycles It is also one of the core elements of the high valuation given by the capital market.

　　"After the real estate industry has entered the era of falling profits, the traditional model of high turnover and high debt is no longer applicable, and scale is no longer the key to success. The industry is moving towards high-quality development, and financial stability and operating levels have become key factors that real estate companies must pay attention to. "Chen Xiao, senior analyst of Zhuge Housing Data Research Center, told the "Securities Daily" reporter that looking forward to the future, under the background of increasing industry concentration and intensifying competition, the company has excellent management level, stable financial status, and a clear diversified development path. Housing companies will be more likely to enjoy high valuations and high price-earnings ratios.

(Securities Daily)