Biguiyuan Regional Structure Again Fission After The Outbreak Of The Property Market Fluctuations

The outbreak of the new crown in 2020 has made the fluctuation and cycle of the real estate market more complex. The effective judgement and layout of the sales market has become a compulsory course for all housing enterprises.

In May 11th, Biguiyuan quietly started a major restructuring of the organization, split up Shanghai, Anhui, Hunan, Hubei, Guangxi and other 15 major areas, fission downward. After adjustment, the number of country gardens increased from 47 to 73.

Biguiyuan responded that this is a continuation of a series of organizational restructuring since last year, with the aim of adapting to the new market changes.

This new change is the recovery of the property market after the epidemic. The emergence of "little spring" has not only happened in the second tier cities, but also in some three or four tier cities.

Since the fourth quarter of 2018, the property market has become increasingly volatile. The black swan has further enlarged the risk and challenged the operation of Housing enterprises. Over the past year, more than ten housing companies, such as Biguiyuan, Vanke, poly, and so on, have adjusted their organizational structure for many times.

Contrary to previous ones, the new action of Biguiyuan has the meaning of expansion rather than contraction and simplification. Whether the fission is precision sniping or redundancy is inefficient, and ultimately, it must pass the market test and speak with results.

The number of regions has surged to 73.

Unlike previous large-scale abolition and merger, the new organizational change of Biguiyuan is to divide and divide large areas.

An internal document from Biguiyuan showed that the adjustment involved 21 regions, namely, the fission of 15 major areas and the change of jurisdiction in 6 regions.

First, we divided the 15 major regions of Shanghai, Hunan, Anhui, Hubei and Guangxi into fission subdivision. For example, the former Shanghai Soviet Area and the former Hunan region are divided into four parts. The former is divided into 4 regions: Shanghai, Soviet Union, Nantong, Suzhong and Northern Jiangsu. The latter is divided into Hunan, Northern Hunan, Xiangxi and southern Hunan.

The reporters found that the 15 regions before the fission were the top area of the company with considerable performance and great potential for growth, and the annual sales scale was about 300-800 billion yuan.

For example, the total sales volume of the former Shanghai and Soviet region last year was about 87 billion yuan, ranking three in the group for the first time in a row. This volume can be ranked 40 of the national housing sales.

Other adjustments include: the Shaanxi area is newly divided into the Weibei area; the Hubei region and the Northern Hubei region are the western Hubei provinces; the Anhui region and the eastern Anhui region are adjusted, and the northern Anhui region, the southern Anhui region and the Northwest Anhui region are established.

Biguiyuan disclosed that the adjustment is based on the actual market capacity, performance scale, management radius and team comprehensive ability of the region, and flexible merger or fission measures.

As for the reasons for the adjustment, Biguiyuan said that this is the latest continuation of a series of organizational adjustment initiatives since last year, aiming to adapt to market changes and continue to deepen the 345 line market.

People close to Biguiyuan said that according to the latest market data, Biguiyuan found that the sinking market was not as bad as previously expected, and the signs and dynamics of recovery were beyond expectations. Yang boss had to make a deep plough layout for the three or four line. "In addition, there are many talents left behind after the abolition of multiple areas in Biguiyuan. Due to the growth of talents, when the volume of business of a city company is enough to support it as a regional company, Yang boss will give ample opportunities."

After this adjustment, the area of the Biguiyuan area is larger and larger, and the number of regions has increased from 47 to 73, far more than other housing companies. According to statistics, Vanke, Longhu and financial innovation are only 4, 5 and 7 districts.

The 73 area is still a big adjustment in Biguiyuan. The regional fission of 2016-2018 years in Biguiyuan has been subdivided into more than 100 regions at most, and the industry is rare.

The adjustment of Biguiyuan's organizational structure has not yet ended. In April 3rd, Mo Bin, President of Biguiyuan, said at the management meeting that the future may continue to be adjusted according to the needs of the market and internal management, and then focus on deep tillage and improve efficiency.

In this regard, Zhang Dawei, chief analyst of Zhongyuan Real estate, said: "the garden area is too complex to belong to the enterprising area with the ability to cross the region, but now the market fluctuates greatly and gradually enters the stock age. Under such circumstances, the regional division of the country garden's progress is not very adaptable to the market, and making adjustments is inevitable."

Delayed "little spring"?

The two years' adjustment of Biguiyuan started from headquarters, and then extended to regional companies.

Unlike in the past, this round of adjustment has opened a new round of regional fission, which is to add rather than subtract, so as to focus on the local market.

Obviously, Yang Guoqiang, chairman of Biguiyuan's board of directors, has changed the judgement of the market. This stems from the mutation of the market itself.

Since March, the sales offices have been reopened, and the sales offices that have been closed for a long time have been reopened, especially in the middle of 4. The trend of recovery led by Shenzhen has spread to Beijing, Shanghai, Chengdu and three or four tier cities.

During the Spring Festival, the demand for returning home was also postponed to the market in May and June, and the prices of many three or four line cities began to rise. According to the sales feedback from several city companies in Biguiyuan, the demand for housing in the three or four line cities has obviously rebounded, and the housing prices in some cities have even risen 1000 yuan / square meter in the short run.

Biguiyuan wants to seize this opportunity. Zhang Dawei said, "the differentiation of the real estate market, a second tier city is still a good quality area, from the market perspective, the recovery has become a trend, 5-6 months of spring trend has emerged."

Comprehensive Central Plains, chain and other institutions data, in May, the market has obviously recovered, especially in most of the hot cities, the net signature data also began to heat up, chain stores announced the signing of the store data, rose faster than the net sign.

Overall, in the first half of May, the volume of hot spot market in China increased by 50% over the same period last May. The hottest cities were Beijing, Langfang, Shanghai, Shenzhen, Shijiazhuang and other cities.

Land market earlier released the signal, housing prices are more optimistic. Since April, 9 enterprises in the country have taken more than ten billion. Among them, the highest enterprises take more than 30 billion. Take Beijing as an example, including enterprises that have seldom taken place in recent years, including health, Longhu and so on.

Zhang Dawei predicts that little spring will last until June. "The trend of China's property market is dominated by policy. According to the current credit policy, economic structure, epidemic impact and so on, we can judge that the 5-6 month's spring is sure to continue. But whether the trend can be extended to 7 or August depends on the next rate cut."

These performances are totally beyond the pessimistic expectations of the property market in the early days of the epidemic. The performance of the market is changing rapidly, and the cycle is getting shorter and shorter.

In order to survive and develop, housing companies have adjusted their strategic layout and organizational personnel structure in order to "survive" in the new environment.

When Wanke, Zhonghai, and Chuang Chuang and other housing enterprises choose to focus on the second tier cities, Biguiyuan puts forward different views on development. At the management meeting in April, Yang Guoqiang said that the prospect of new urbanization is still promising for a long time, and the 345 lines will continue to be ploughed.

The annual report shows that as at the end of 2019, the country has gained $17022 billion in its rights and interests. The proportion of resources for first tier cities, second tier cities and three or four line cities was 17.07% (290 billion 600 million yuan), 36.07% (614 billion yuan) and 46.86% (797 billion 600 million yuan) respectively.

In this sense, Biguiyuan will continue to seek a major profit engine in the sinking market, and the prospect of the sinking strategy is unknown.

Southwest Securities Research believes that the three or four line project of Biguiyuan still has advantages such as quick turnover of capital, reworking and reworking earlier, strong market pricing ability and outstanding product competitiveness.

But at the same time, it also pointed out that the three or four line fundamentals are at a high level, and the epidemic has brought additional uncertainties. We should pay attention to the three or four line tail risks. At present, country garden has three or four lines of sales and less money than expected, completion of delivery is less than expected risk.

In Zhang Dawei's view, housing companies can do little in the rapidly changing market, and can only do their best to make high turnover and scale up: "bigger and stronger enterprises are the only way to deal with market changes."

The regional structure of Biguiyuan has changed so much in the short term, which is rare in the industry. According to incomplete statistics, the large-scale regional fission is the sixth major adjustment of third times in two years and two years in the country.

Is it reasonable to adjust the organizational structure of Biguiyuan so frequently in order to adapt to market changes? Can management and team keep up? Whether it can really improve quality and efficiency, and then accurately capture the demand for housing, and ultimately need to check the property market after the epidemic era.