Annual Report Observation ｜ Vanke’s commercial ferry

For a long time, Vanke did not give enough attention to business.But at this stage, business is an important “ferry” for Vanke to cross the cycle.

According to the annual report disclosed at the end of March, in 2023, Vanke’s business (including non -parallel project) operating income was 9.11 billion yuan, an increase of 4.6%year -on -year.Among them, the operating income of the commercial projects managed by Yinli was 5.7 billion yuan, an increase of 4.1%year -on -year.At the end of the period, a total of 203 commercial projects (excluding light asset output management projects) opened a total of 11.58 million square meters.

At the downside of the real estate, business is a certain degree of cockpit stone.Whether it is the sale of Qibao Vanke Plaza or the issuance of public offering REITs, commercial assets alleviate the liquidity pressure of Vanke’s current stage.

Commercial customers were informed that Vanke’s overall business business consists of two parts, and some of them are commercial groups under the jurisdiction of urban companies. The product line includes Vanke Plaza and Vankeli.

The other part is Yinli Group. In 2005, the Impression Series brand was founded. It is prepared to provide commercial operation services with the “Impression City” brand that is positioned as a regional shopping center.”Impression”, as well as “Impression City Mega” in urban -level business centers.

Therefore, many people think that the line of Vanke’s business has always been more chaotic.

In January 2024, Vanke’s internal document announced the establishment of a business division, and the business business and India Group of seven regions were unified into the business division.He continued to serve as the chairman of the Yinli Group and the chief consultant of the Business Division, and Wang Haiwu was the core partner of the Business Department.

In the business structure of Vanke Group, the Business Department belongs to the Business Group (BG), and is the same as the BG and property BG as the 7 major regions.

Some analysts believe that through the establishment of a business BG, Vanke tried to coordinate the business of India Group and the regional BG.The annual report also stated that the establishment of a business division is to focus on strengthening the construction of the group’s business business.

Revenue of 9.1 billion

According to data disclosed by Vanke Annual Report, commercial property development and operations include shopping malls, community business and other business forms.

In 2023, Vanke Commercial Business (including non -parallel projects) operating income of 9.11 billion yuan, an increase of 4.6%year -on -year.Among them, the operating income of the commercial projects managed by Yinli was 5.7 billion yuan, an increase of 4.1%year -on -year, and the rental rate was 94.8%, an increase of 1.6 percentage points year -on -year.

The continuous opening of the project has increased the business revenue of Vanke year year by year. The operating income of Vanke Commercial Business (including non-parallel projects) from 2021-2023 is 7.629 billion yuan, 8.72 billion yuan and 9.11 billion yuan, respectively.It was 5.29 billion yuan, 5.48 billion yuan and 5.7 billion yuan.

As of the end of the reporting period, Vanke opened a total of 203 commercial projects (excluding light asset output management projects), with a construction area of 11.58 million square meters; the planned and commercial construction area under construction was 3.05 million square meters.Among them, Yinli opened a total of 74 commercial projects (excluding light asset output management projects), with a construction area of 7.14 million square meters; the planned and commercial construction area under construction was 710,000 square meters.

The main layout is in the first and second -tier cities, in the business projects managed by Vanke, the scale of the Yangtze River Delta and the Pearl River Delta accounted for more than 52%, the proportion of four first -tier cities accounted for 24%, and the proportion of first- and second -tier cities accounted for more than 90%.

In 2023, 15 commercial projects including Chongqing Impression City, Shanghai Longhua Club, Shenzhen Wan Ruiyin Shopping Center opened.

It is worth mentioning that Vanke has not been paid to the present, so the investment in the report on the report is a “long -term equity investment”, and the income generated belongs to “investment income”.In the issuance documents of the public offerings REITs, Yinli Group also said that the company also said that “no actual controller. Any investor cannot control the company.”

India Group was formerly known as the Shenzhen Investment Merchants. In 2016, Vanke acquired 96.55%of the Investment Fund for 12.87 billion yuan.Assist Vanke for operation and management of stock projects.

For a long time, Vanke’s commercial sector is divided into two major camps. One is the acquisition of India Group; the other is the commercial group under the jurisdiction of Vanke regional company, which has been independently managed by major regions for a long time.

The operation of both parties is relatively independent.

Commercial ferry

In 2021, Wang Haiwu, then COO of Vanke Group, descended to the Emperor of the President of India.At that time, the analysis pointed out that the intention may make Yinli the unified and only operating platform of Vanke’s business.

According to the news of 2022, Vanke’s adjustment of some commercial projects in each region was managed by Yinli Group. The total number of commercial projects reached 49, and the total commercial volume was about 2 million square meters.Beijing, Qingdao, Jinan, Chongqing, Guiyang, Kunming, Xi’an, Urumqi, Nanchang, Xuzhou, Taizhou, Hefei, Shenyang and Changchun’s self -developed commercial projects, cover Vanke Plaza, Vankeli and 2049 product lineEssenceHowever, the official website of Yinli stated that in 2022, the management of 45 commercial projects of Vanke.

At that time, some relevant persons said that the main regional and community projects involved in some regional and community -oriented projects, mainly for the business resources of similar projects in the region, can be used and intensive, not all Vanke BG projects.After the project overlap, the management area of the Indian Group will increase to 12 million square meters.

In January 2024, the commercial business and Yinli Group in the seven regions of Vanke were unified into the business division, and Sun Jia served as the chief partner of the Business Division.

This is also considered to be a big step forward.

The official website of Yinli disclosed that as of October 2023, the company’s operating management projects exceeded 53 cities across the country, with an asset scale of nearly 100 billion yuan, and the management area exceeded 12 million square meters.

However, even if it was acquired, Vanke’s business profitability failed to improve quickly.If compared with China Resources Land and Longhu, at the end of 2023, the scale of China Resources Land and Longhu’s business projects have been slightly lower than Vanke’s business, but the rental income is 17.9 billion yuan and 10.28 billion yuan, respectively, and the rental rate is 96.5%and 96.2%, respectively.

For Vanke, the development of business business is a major challenge, and the largest proportion of business business is the business business.Vanke’s joint president Zhu Jiu was better than the 2023 performance meeting, and mentioned the pressure of funds brought about by Vanke facing three scissors.

One of them is the pressure generated by Vanke’s operating layout. The ratio of the EBITDA or NPI rate of some projects has not reached the bank’s loan interest rate, and the overall operating business yield is not enough to cover the climbing state of interest.According to the experience of peer, in terms of capital financing, the scale of 100 billion is the decline in sales (the interest pressure brought about) to balance 5 billion business business EBITDA and NOI.Vanke needs to improve EBITDA, NOI and NPI for business business.

Zhu Jiusheng introduced that Vanke’s operating business scale is close to 400 billion yuan.

That is to say, Vanke’s operating business has a low yield, and some do not even reach bank loan interest rates.Also based on China Resources Land as a comparison, the recurring business revenue disclosed by China Resources covers dividends and interest multiples of 1.9.

However, some of Vanke’s operating property cash flow comes from its relatively stable rental income. In 2023, the total income of investment properties and the total rental income accounted for about 60%of the interest expenditure.

Asset bailout

Under the current situation of real estate, the business assets of commercial property also contributed cash flow to Vanke to a certain extent.

Asset disposal is the most direct choice of management liquidity and leverage. For example, in February 2024, the flagship commercial project in Shanghai, Shanghai Qibao Wanke Plaza, was sold for 2.384 billion yuan.After the transaction was completed, Vanke completely withdrew, and the exhibition became the only holder of the property.

This project is a Shanghai Star Commercial Project, and it is also a project that has performed well for several years in a row, but in the predicament, Vanke still chose to sell the money -making project for cash flow.

It is worth mentioning that in 2021, when the exhibition acquired 50%equity of Qibao Wanke Plaza from GIC with 2.772 billion yuan, the overall valuation of the project was 6.58 billion yuan, and the transaction agreement was 6.4 billion yuan.

In the latest transactions, the overall valuation of Qibao Vanke Plaza has increased to 7.06 billion yuan, but the transaction agreement price is only 5.2 billion yuan, with a discount of nearly 30 %.

However, a business person pointed out that Vanke had to choose from the project disposal and peeling of “valuable” projects in his hand.

In addition to conventional financing channels, Vanke is also seeking multiple forms of cooperation, including equity financing, REITs and public offerings.It is reported that Vanke available assets include urban renewal projects, retail properties, offices, rental housing, logistics parks and hotels.

At present, the highest concern is the advancement of CICC’s consumer consumer REIT.

Commercial customers were informed that the public sale of CICC’s consumer consumer REIT ended the raising in advance. The total share of the product raising fund was 1 billion yuan, the subscription price was 3.260 yuan/, and the total amount of funds raised was 3.260 billion yuan.

CICC’s consumer consumer REIT takes Hangzhou Xixi Impression City as the underlying asset. The overall construction area of the project is 250,000 square meters. It is the TOD shopping center with the largest total construction area in Hangzhou City.The semi -annual turnover exceeded 2.1 billion yuan.

In terms of rental ratio, the average lease rate of the weighted leasing rate of Xixi Impression City was 98.2%in 2014-2022. The average lease rate of the weighted lease in the past five years was about 98.1%. As of September 30, 2023, the lease rate reached 99.6%.

At present, according to commercial observations, although Vanke has taken the house as its core business for many years, it has a diversified industry, but it has been swaying on the development path of the commercial sector.

A source has revealed that Vanke has intended to promote the business sector to go public, but as the steering spin -off project releases REITS and assets with strong profitability, the overall listing will no longer be promoted.

From this point of view, the development path of Vanke’s business sector has yet to be observed, but the cash flow brought by commercial real estate business has helped the parent company to pass the difficulty.

In March 2024, the Yinli Group’s core assets of the Shenzhen Headquarters of Shenzhen obtained 3.59 billion yuan in operating property loans for CMBS due to redeeming 2026 in advance.Ningbo Lizhou Impression City, Xi’an Longshou Impression City and other projects.

As of March 2024, India has accumulated a total of 8.4 billion yuan in operating property loans to replace CMBS business.

Vanke’s management introduced at the performance meeting that operating property loans are dual -profit hands with Vanke’s balanced withdrawal and repayment contradictions. By sorting out resources, inventory assets, providing pledge, and efficiency in operations, the operation has been added in the first quarter of 2014.Sexual property loans of 10 billion.

Recently, S & P reduced Vanke’s rating to “BB+”, which mentioned that in order to supplement the liquidity of the parent company, it is estimated that Vanke enterprises will use the bank’s new commercial property loans and the income of asset disposal.

Using unsecured investment properties can obtain commercial property loans from banks. S & P estimed that Vanke still has a large amount of unsecured investment property with a fair value of more than 100 billion yuan.

In late January 2024, the Central Bank and the State Financial Supervision and Administration Administration relaxed the provisions of how enterprises used the loan income of commercial properties, including for settlement bonds.The loan value ratio must not exceed 70%of the value of the property evaluation.Therefore, S & P believes that Vanke’s enterprises can further raise commercial property loans from banks to re -financing for the upcoming debt.

In other words, this mortgage loan will increase the asset pledge rate of Vanke enterprises.As of the end of 2023, Vanke’s assets of only 34.5 billion yuan were pledged for bank loans.As of the end of 2023, mortgage debts accounted for only 7%of the total debt.