Fang Xiao Review China Fang Review Report today
Hechang Group, which once grabbed food with Sunac and swallowed 13.326 billion asset packages with a small body of 20 billion, began to sell projects.
At this stall, Hu Bo, president of the post-80s generation, confirmed his resignation.
This housing company, which is eager to hit hundreds of billions, is experiencing the after-effects of a radical winter.
Low-key boss and star chairman
In the real estate circle, you rarely see a professional manager of a real estate company directly sitting in the position of chairman. Yu Liang became the chairman of Vanke, also worked in Vanke for decades, and was determined by the company’s special shareholding structure, professional manager culture and the situation at that time.
The chairman is often the title exclusive to the boss.
But Hechang Group, this real estate company from the day of its establishment, has not taken an unusual path: the boss poached a professional manager as the chairman, of course, it is still a professional manager in essence.
Wan Yongxing, the big boss behind Hechang, is a low-key rich man, and you can find news about him, basically donating 100 million to his alma mater, being shortlisted for Forbes and so on. When it comes to corporate affairs, it is rarely visible.
Founded in 2000, Zhongrui Holdings, a major shareholder of Hechang, owns many companies such as Ruimaotong, Hechang Group, Sino-Swiss International, Sino-Swiss Capital, Sino-Swiss Park, etc., involved in coal, finance, real estate, chemical and other fields.
Wan Yongxing did not start in real estate, when Zhongrui was still a coal business, he coincidentally owned a piece of land.
Wan Yongxing, a layman in real estate, decided to find a professional to do professional things. At that time, he lived in Xinyuan’s community and was a neighbor with many Xinyuan executives. Later, Han Kai, the former president of Xinyuan Group, was found to operate, and from this land, the predecessor of Hechang Group was born.
In 2007, it set off from Zhengzhou, and later moved its headquarters to Beijing, and Hechang began its nationwide development. Han Kai started from scratch, recruited people from the old company, and gradually established a team belonging to Hechang through the operation project.
When he was trying to build another real estate company bigger than Xinyuan, in 2015 a young man from Jinan Vanke was transferred to be his assistant.
This year, Han Kai was promoted and secretly promoted, transferred to the vice chairman of Sino-Swiss Holdings, and left Hechang in September, leaving the phrase “When you grow up, you always have to fly!” “, and countless sad words.
The only reason for professional managers to leave is that the boss is dissatisfied, and this dissatisfaction may be about performance, or it may be about others, and outsiders cannot scrutinize it.
Hundreds of billions, impossible tasks
That post-80s generation from Vanke is Han Kai’s successor, now Wu Lei, chairman of Hechang Group. In the same year, Hu Bo from Kunming Vanke joined the company and became the president of Hechang Group.
These are also the two most familiar names about Hechang today.
Since then, Hechang Group has opened its doors to Vanke people. The assistant general manager of Vanke City Company became the chairman and president of Hechang, and the department managers of Vanke City Company can also get higher titles and considerable salary bonuses in Hechang.
Hechang has absorbed a large number of Vanke people and wants to learn Vanke’s model to complete the transformation and development of the enterprise. In the following period, the post-80s pair led Hechang, which once grew at an annual rate of nearly 100%, and shouted the slogan of breaking 100 billion in 2020 in 2017.
However, Hechang’s rapid growth was built on a sales base of billions of dollars, and in that era of explosive real estate growth, jumps from billions to 30 billion were not uncommon in the circle.
But what does the market look like today?
In 2018, Hechang did not complete the sales plan of 35 billion yuan. According to Clarion’s statistics, the contracted sales of Hechang Group last year were 29.28 billion yuan, while the data of Yihan Think Tank was 31.2 billion yuan.
From 30 billion to 100 billion, this is an almost impossible task in the next two years.
Hechang has also accepted the reality of this, and there is still a “100 billion dream”, but this road still needs to be conservative.
However, before the “100 billion dream” was realized, the post-80s partners of Hechang have parted ways, and Hu Bo has recently left Hechang Group and chose to start a business. Wu Lei is temporarily taking his place, and Hechang is still looking for a replacement.
For Hu Bo’s departure, there are different accounts within Hechang Group, and the positive statement is that Hu Bo has always had a dream of entrepreneurship and has a strong desire to be his own boss; The negative version is that he did not voluntarily choose to leave, but was resigned.
Fang Xiaoping leaned towards the latter, after all, when he met these two young managers before, they were full of ambition. For a fast-growing enterprise, the opportunity to lead him to achieve the goal of 100 billion yuan or even greater is the career dream of countless real estate people.
Wu Lei and Hu Bo have a clear division of labor, Wu Lei focuses on investment and other general directions, and Hu Bo is responsible for the completion of real estate development business and performance. Obviously, this performance that does not meet expectations needs to be resisted. And Hu Bo is one of the many Hechang people who have left since last year.
Whale swallowing sequelae
What is the difference between a boss and a professional manager?
The former will have longer-term expectations for the company; And the latter will pursue the number that proves their ability.
Just like a mansion in Beijing, it has been sold for so many years, and the value of the goods is selling more and more, this is the wisdom of the boss; A large market in Beijing CBD was sold out in a short period of time, and tens of billions of sales in addition to fulfilling the performance and bonuses of professional managers, were a loss for the company itself.
Hechangda’s leap to the path of hundreds of billions is too radical, and in the face of sudden changes in the market, this speed has not been able to continue, but has brought practical difficulties to enterprises, that is, the problem of money.
In the first two years, many large real estate enterprises contracted to acquire land, sell as much as they wanted, reduce leverage, and reserve cash for the winter. And Hechang’s thirst for scale surpasses everything.
In 2017, Hechang swallowed 8 projects under Lehman International with 13.326 billion yuan, including 3 precious projects in Shenzhen, realizing the nationwide layout of the Bohai Rim, Yangtze River Delta, Pearl River Delta and central core cities.
At that time, the sales scale of Hechang was only about 20 billion, and Hechang’s boldness in investing in land can be seen.
It should be pointed out that these 8 projects originally belonged to the “package” of cooperation between Lemon and Sunac, but in 2016, Sunac acquired 7 projects of Lemon, and after the completion of the first batch of transactions, the business strategies and market situation of both parties changed, so the second batch of projects did not complete the transaction, and Hechang finally took over.
Needless to say, the vision, judgment and bargaining skills of the merger and acquisition of Wang Laosun, it makes sense that he did not choose to take over in the end.
After swallowing the Leman asset package, Hechang encountered the dual strict control of the financial and property markets in 2018, and the cash flow was under pressure.
Although these projects can bring huge value to Hechang and lay the foundation for future scale expansion, they cannot quickly enter the market to bring cash to Hechang. Starting this year, the asset package acquired by Hechang generated cash repatriation, while the Shenzhen project will not open until next year.
The pressure on funds has not eased in 2019, and according to the information disclosed by the Shanghai Stock Exchange, the “CICC Hechang Asset-backed Special Plan” applied by Hechang Group with a scale of 330 million yuan has been suspended for review, and the hindrance of financing is tweaked.
In order to recoup the funds, Fang Xiaoping learned that Hechang was selling equity in some of its projects. From the previous big buy, buy, buy, to sell and sell, it’s just a winter time.
To put it nicely, this is optimizing the investment structure, and in essence, Hechang out of the pursuit of hundreds of billions, too bold acquisition, swallowing more soil reserves than it can bear, and having to spit back after winter.