Typical Real Estate Enterprise'S Sales Target "Stepping On The Brake": The Scale Growth Rate Is Generally Reduced And The "Green Gear" Target Is Higher

Under the influence of policy, market and other factors, the real estate enterprises are gradually leaving the past high flying, turning to be stable, even conservative.

Recently, the real estate enterprises have successively released the annual report of 2020 and announced the performance target of 2021. According to the statistics of China real estate network, in 2021, the average sales target growth rate of 44 real estate enterprises is 11.85%. Compared with the average growth rate of 14.40% in 2020, it decreased by 2.55 percentage points. And from the average growth rate of sales target of real estate enterprises in recent four years, it shows a downward trend year by year.

In terms of classification, small and medium-sized real estate enterprises still have strong demand for scale, while head enterprises are relatively stable. According to the requirements of the "three red lines", the target growth rate of "green" real estate enterprises is higher, while that of "red" and "orange" tends to be conservative.

Over the past years, the pursuit of scale growth has been the main theme of the real estate industry. In the middle of last year, the "three red lines" policy aimed at quantitative management of interest bearing liabilities was introduced. As a result, the use of capital leverage by real estate enterprises was limited. It was difficult to achieve a substantial growth in scale only by their own funds and land reserves.

Analysts believe that with the decline of market dividend and normalization of regulation, the "high leverage high growth" mode of the real estate industry is gradually losing efficacy, and the industry is entering an era of low-speed growth.

Head real estate companies are more cautious

According to the statistics of China real estate.com, from 2018 to 2021, the average annual sales target growth of typical real estate enterprises is 49.04%, 17.77%, 14.4% and 11.85%, showing a downward trend year by year, indicating that enterprises are more cautious in judging the market.

From the actual completion situation, in the past three years, most of the real estate enterprises have been able to complete the sales plan due to the high scale of the overall market transactions. However, by 2020, with the outbreak of the epidemic and the introduction of the "three red lines" policy, some real estate enterprises still fail to achieve their sales targets. For example, Fuli and rongchuang are all within the range of the annual sales targets, and large-scale real estate enterprises such as COSCO and COSCO have failed to achieve the sales targets.

In 2021, real estate companies are more cautious about the market. Among the real estate enterprises that have released their sales targets, the most "radical" one is Hesheng Innovation Exhibition. Hesheng has set a target of 50 billion yuan this year, which is nearly 40% higher than the actual sales scale of last year.

Analysts believe that due to the low base and large scale of Hesheng, it is not difficult to achieve this goal under the premise of no big market fluctuation.

Similar to Hesheng, enterprises with larger sales target growth in 2021 tend to be smaller. Compared with large real estate enterprises, it is easier to realize the promotion of growth rate. Yincheng International Holding's sales target is 30 billion yuan, 30% higher than last year's actual sales. For those enterprises less than 100 billion yuan, such as huabiannian and Landsea, the target of scale growth this year is more than 20%.

The attitude of the head real estate enterprises to scale is relatively cautious. In recent years, the sales target growth rate of Vanke, Evergrande and country garden is rarely more than 20%, even often as low as a single digit.

In recent years, Vanke rarely announced its sales targets to the public, and its actual sales growth rate rarely exceeded 15%, maintaining a stable growth. In 2021, Vanke set a sales target of 790 billion yuan, an increase of 12% over the actual sales scale of last year. At the same time, Vanke also proposed the requirement of 95% return rate.

Evergrande's sales target this year is 750 billion yuan, with a growth rate of only 3.71%, and continues to maintain single digit growth; Country Garden's equity sales target is 624 billion yuan, with an increase of less than 10%.

Compared with small and medium-sized enterprises, the base of large-scale real estate enterprises is larger, so it is difficult to achieve high-speed growth of scale. But there are still some giants trying to maintain a certain speed. The sales target of China Merchants Shekou this year is 330 billion yuan, an increase of 18.87% over the actual scale of last year. In this scale of real estate enterprises, has been a "high growth" in the list.

The fetters of the "red line"

Many years ago, China Merchants and Vanke, poly, Jindi together occupied the first corps of Chinese real estate enterprises. Since then, the company once fell behind, but gained development potential again by integrating the land resources of Shekou Industrial Zone in Shenzhen. Yan Yuejin, a financial commentator, told the 21st century economic report that China Merchants Shekou has set a high growth target, which shows that the company still has the pursuit of "overtaking on the curve". At the same time, China Merchants Shekou has two other advantages: huge land reserve and good financial indicators.

By the end of 2020, the asset liability ratio (excluding advances) of Shekou was 58.84%, the net debt ratio was 28.81%, and the cash to debt ratio was 1.23. The green file in the "three red lines". According to the regulatory policy, the scale of interest bearing liabilities of China Merchants Shekou can be increased by up to 15% this year.

It is reported that the setting of sales targets of real estate enterprises is related to the company's development strategy, value scale and capital strength. However, with the introduction of the "three red lines" policy, the capital status of real estate enterprises has been classified management, and it is difficult to obtain high growth with the help of high debt. At the same time, as the regulatory authorities require enterprises to submit off balance sheet liabilities, the practice of making a large number of debts off balance sheet in the past will also converge.

In fact, the "three red lines" policy has greatly affected the growth expectation of real estate enterprises. According to the regulations, the upper limit of the growth of interest bearing liabilities of real estate enterprises with four grades of red, orange, yellow and green is 0, 5%, 10% and 15% respectively. If the "stampede" situation is more serious, the loan scale of real estate enterprises will be limited, naturally it is difficult to achieve high-speed growth.

Combing the sales target of real estate enterprises, it is found that the growth rate of sales target set by "green" real estate enterprises is higher than that of other real estate companies. For example, Baolong real estate, located in the "green sector", has a sales target of 105 billion yuan this year, an increase of 28.8% compared with last year's actual sales scale; Longhu, also located in the "green sector", has a sales target of 310 billion yuan, an increase of 14.6%. At the scale level, both of them have higher growth targets.

In contrast, for the first time, which has stepped on all three red lines and is located in the "red file", the sales target for this year is set at 110 billion yuan, only 2.5 billion yuan higher than last year's actual sales amount.

Some real estate companies set a more conservative sales target, even lower than last year's actual sales. The sales target of Binjiang group is 120 billion yuan, which is 11.11% lower than that of last year's 135 billion yuan. Jiulongcang, a Hong Kong invested real estate enterprise, is also relatively conservative. After reducing its sales target for two consecutive years, it has remained at the level of 15 billion yuan this year, which is the same as last year.

Yan Yuejin said that the real estate industry is entering an era of low-speed growth with the fading of market dividends and normalization of regulation and control. Compared with the demand of scale, the importance of financial security has been greatly enhanced, which will force the real estate enterprises to improve in management, products and other aspects. At the same time, the industry pattern will be further solidified, Matthew effect is significant, and it will be more and more difficult for small and medium-sized real estate enterprises to overtake on the curve.

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