Profit Decline In The First Three Quarters, Debt Ratio Rise, Real Estate To "Ordinary Industry"?

"In the" Silver Age ", the land bonus and financial dividend will gradually disappear, and the management dividend will rise. The real estate industry will return to a common industry in the national economy." This is a statement made by Yu Liang, chairman of Vanke Group, a few days ago. Although it is a description of the general trend, under the influence of the new epidemic situation and the normalization of regulation, the indicators of the real estate industry are rapidly "returning" from the previous high growth.

Recently, listed real estate enterprises have successively issued three quarterly reports. In the first three quarters of this year, the slowdown of revenue, the decline of profits and the increase of liabilities have become a common phenomenon in the industry.

Vanke, which has stable performance all year round and is regarded as the industry benchmark, achieved an operating revenue of 95.14 billion yuan in the first three quarters, with a year-on-year increase of 12.5%; and the net profit attributable to its parent company was 7.36 billion yuan, with a year-on-year increase of 14.9%. However, compared with 20.8% and 31.6% in the same period last year, the growth of these two indicators has slowed down significantly. Over the same period, the gross settlement margin of Vanke's real estate development and related businesses was 22.9%, a year-on-year decrease of 4.7 percentage points.

In view of the "black swan" incident brought about by the new crown pneumonia epidemic, the performance of listed real estate enterprises has slowed down, which does not surprise practitioners. However, at the end of August, the Prudential Management Policy of real estate finance represented by "three red lines" was launched, which made real estate enterprises have to make a number of regulatory adjustments, including accelerating sales and payment collection, reducing liabilities, improving operational efficiency and other aspects, and it will be a long-term process.

This seems to mean that the real estate industry will bid farewell to high debt and high growth, and return to the healthy, stable and low profit "ordinary industry".

In the first three quarters of this year, the slowdown of revenue, the decline of profits and the increase of liabilities have become a common phenomenon in the real estate industry. Visual China

"Drag" of epidemic situation

Although efforts have been made to restore sales, the impact of the epidemic on real estate enterprises is still reflected in various aspects.

According to the statistics of Huachuang securities, in the first three quarters of this year, the overall main business income of the real estate sector increased by 5.7% year-on-year, and the growth rate was 13.4% lower than that of the whole year of 2019. Among them, the second tier real estate enterprises, which had a faster growth rate before, declined by 18.9%.

In terms of profit, in the first three quarters, the net profit scale of the real estate sector decreased by 16.8% year on year. Compared with that of the whole year of 2019, it increased by 21.7% and decreased by 38.5%.

From the perspective of quarterly growth rate and settlement, the main reason is the decline of construction progress. In addition, the increase of "three fees" is also one of the reasons for affecting income and profits. In the first three quarters of this year, the overall three expenses rate of the real estate sector was 11.8%, 1.5 percentage points higher than that in 2019.

It is reported that the settlement cycle of real estate enterprises usually lags behind the sales cycle by one and a half to two years. Due to the high cost of land acquired by enterprises in 2018 and the impact of the epidemic situation on the completion progress, the income and profit performance of real estate enterprises this year are lower than that of last year.

According to the statistics of Huachuang securities, as of the third quarter of this year, the overall gross profit rate of the real estate sector was 30.3%, which was 3.9 percentage points lower than that of the whole year of 2019. Among them, the gross profit margin of first tier real estate enterprises was 33.9%, that of second tier real estate enterprises was 26.1%, and that of third tier real estate enterprises was 28.7%.

"The relatively high gross profit rate of first-line real estate enterprises is mainly due to the diversity of land acquisition modes and strong land acquisition cost control ability; the gross profit margin of third tier real estate enterprises is in the middle, mainly because most of them adopt land hoarding mode, and the land cost is relatively lower; second tier real estate enterprises tend to the latter between profit rate and scale expansion due to their strong willingness to expand, so their gross profit margin is relatively lower." The agency said.

Over the same period, the overall net interest rate of the real estate sector was 7.8%, 1.7 percentage points lower than that in 2019.

In terms of liabilities, by the end of the third quarter of this year, the overall asset liability ratio of the real estate sector was 79.3%, an increase of 0.6% over the end of last year. The net debt ratio was 86.2%, an increase of 4.7 percentage points over the end of 2019. Among them, in addition to Taihe, which is in debt crisis, the net debt ratio of Financial Street and Huaxia happiness are all above 190%, and the net debt ratio of Greenland is 183% and 170% respectively.

The increase of debt ratio is also related to the slow settlement caused by the epidemic. On the other hand, due to the loose financing environment since the first half of the year, many real estate enterprises have actively acquired land for expansion, which also leads to the rising debt ratio.

"Dancing in chains"

However, from the second quarter of this year, with the recovery of offline channels and the easing of credit policy, the sales of real estate enterprises also recovered rapidly. By August this year, the national commercial housing sales have exceeded the same period last year.

Since September, many real estate enterprises have promoted the traditional "golden nine silver ten" plan, including the implementation of measures such as increasing the sales force and reducing the price, which further increased the sales scale.

According to the statistics, the sales amount of e-jue reached RMB 1.9-trillion, with a year-on-year increase of RMB 1.9-trillion, showing a year-on-year increase of RMB 1.9-trillion.

But this is still far from the annual sales target of real estate enterprises. As the sales targets of many real estate enterprises have improved on the basis of last year, the completion rate of most enterprises is only about 70% by the end of October, which is significantly lower than that in previous years. That is to say, the sales pressure of real estate enterprises in the fourth quarter is still not small.

At the same time, at the end of August this year, the regulatory authorities launched a "three red lines" based financing management policy to manage real estate financing, specifically as follows: after excluding advance collection, the asset liability ratio is greater than 70%; the net debt ratio is greater than 100%; the cash short debt ratio is less than 1 times. According to the real estate enterprise's "line" situation, it is divided into "red, orange, yellow, green" four grades, and then implement differentiated debt scale management.

Yan Yuejin, director of the think tank center of Shanghai E-House Research Institute, told the 21st century economic report that reducing debt and replenishing cash flow are the requirements of "three red lines". From the point of view of the future, both the financing target and the marketing target of the real estate enterprises should be strengthened.

But in October, the real estate market has turned cold. "All regional markets have cooling characteristics, and the market wait-and-see sentiment in the Yangtze River Delta region has revived, and the month on month turnover has nearly declined across the board." Yi Ju Ke Rui points out that the performance of real estate enterprises in the fourth quarter is almost "dancing in shackles", and enterprises need to improve their sales and operation efficiency to have the opportunity to tide over the difficulties.

Yan Yuejin predicted that this year, the completion of sales tasks of real estate enterprises may not be as good as in previous years, and quite a number of enterprises will be difficult to achieve sales targets.

In the long run, the "three red lines" will also have a more profound impact on the industry. Recently, Lin Zhong, chairman of the board of directors of Xuhui holdings, said in a public speech that the policy will affect at least the next five to ten years. Real estate enterprises will face the situation of slowing down growth rate, aggravating differentiation and declining profits, and high efficiency and high turnover are the main ways for enterprises to survive.