The four words "misfortunes never come in singularly" are most suitable for today's Evergrande . Since the storm, it has almost been bad news. Take the several pieces of land that Xu Jiayin bought for huge sums of money for , and it was confiscated before it was developed. What's going on?
As a real estate giant, Evergrande has bought a lot of land in recent years. In 2015, in order to further expand the Hainan market, Xu Jiayin spent 8.6 billion to buy eight pieces of land. But after getting it, Evergrande has not started to develop it, and two years have passed in a flash. According to the relevant provisions of of my country's Land Law, the land acquisition has not been developed within two years and the government has the authority to take it back, so the last eight pieces of land do not belong to Evergrande Group .
spent more than 8 billion yuan, and the last penny disappeared before it was earned. What was Xu Jiayin thinking? Evergrande's debt problems have been so serious in recent years. Even if it is not developed, it can recover some funds if it is sold, and at least it can temporarily alleviate the debt problem. But in the end he didn't choose to do this, which was really hard to understand. Where did this land come from? Is there any particularity? Why has Xu Jiayin not been developed for a long time? When talking about the 3,300 acres of land in Hainan, we have to mention the key figure in the whole thing, that is, the son of Hong Kong rich man Cheng Yu-tung Zheng Jiachun .
In 2005, Zheng Jiachun sent a sigh after visiting Hainan, " beautiful sand is indeed a treasure land, it is worth buying it for real money and then building it into a landmark real estate for tourism and vacation." He did it as soon as he said, and then New World Development bought the development rights of 3,300 acres of land in the beautiful sand project for 1.808 billion yuan, which is also six of the eight lands that Evergrande was later reclaimed. After getting these lands, Zheng Jiachun did not develop them immediately. Instead, just leave the ground there and wait for it to appreciate.
But at that time, Xu Jiayin and Zheng Jiachun had no connection. After all, one was from the four rich families of Hong Kong, and the other was just the boss of a small real estate company in the mainland. Since that's the case, how did the two of them have a subsequent cooperation? This requires contacting another key figure Yang Shoucheng .
He is also a famous big shot in the Hong Kong business world. Xu Jiayin played a great role in cooperating with Zheng Jiachun. At that time, Evergrande Group had not yet been listed and was in a capital chain dilemma for various reasons. Even so, Xu Jiayin still chose to acquire land frantically. I believe that most people cannot understand his approach. The company has no money anymore. Isn’t it aggravating the crisis even if you still buy land? A large part of the reason why he did this was to impact the capital market in this way. But in the end, Evergrande still couldn't stand it anymore.
Xu Jiayin was anxious. Can’t just watch Evergrande fall before it was listed? When he was desperate, the savior appeared, that was Yang Shoucheng. He introduced a person to Xu Jiayin, who was Zheng Jiachun's father Zheng Yutong. At that time, the identities of these two people were very different. Fortunately, Cheng Yutong did not look down on Xu Jiayin because of these things, but instead was particularly optimistic about Evergrande's future. After understanding Evergrande's predicament, Cheng Yutong was very happy to invest. At the same time, he also introduced the big guys such as Zhang Songqiao and Liu Luanxiong and to Xu Jiayin. Finally, Evergrande successfully received a $500 million investment, and the capital chain problem was temporarily solved. It is precisely because of Cheng Yu-tung's help that Evergrande had the opportunity to re-invade the capital market.
However, Evergrande's subsequent development is indeed as Cheng Yu-tung guessed at the beginning, and he and the big guys in Hong Kong have also made a lot of money from it. By 2015, Evergrande had grown from an unknown second-rate real estate company to a giant company with annual sales of over 100 million yuan. Xu Jiayin is a kind-hearted person. He is very grateful for the help from these big guys back then. If it weren't for them, there might not be Evergrande in its peak period. So no matter how high Evergrande stands, Xu Jiayin has been maintaining cooperation with them.
The most cooperative project between them is real estate. In recent years, Evergrande has successively bought a lot of land from New World and Chinese Real Estate , including six pieces of land in Hainan. Just in December 2015, Evergrande officially announced that it would acquire New World’s Haikou project for 8.6 billion yuan. This number shocked many people. Zheng Jiachun only spent 1.8 billion yuan to buy land, but after ten years, he could actually sell it for 8.6 billion yuan. Who was crazy? Besides, New World has not developed these land much in the past ten years. How much can the investment cost be? This is equivalent to Zheng Jiachun's net profit of 6.8 billion yuan after selling it. You should know that he was once considered a "dog that cannot be helped" by everyone. Many people also think that if Zheng Yutong handed over the company to him, he would be defeated sooner or later. There is naturally a reason why everyone is so unfavorable to Zheng Jiachun. Take the new world in the 1980s for example. It was developed well, but Zheng Jiachun fell into a debt crisis shortly after he took over. Cheng Yu-tung thought he could enjoy his retirement life with peace of mind, but when he saw this situation, he had to come out again to save the new world.
No matter how unbearable the son is, it is not much worse to have such a powerful rich man as a father. After years of experience, Zheng Jiachun's radicalism has gradually receded, and his investment and management capabilities have improved a lot. In addition to the example of a net profit of 6.8 billion yuan from 3,300 acres of land in Haikou, he also made an investment on the eve of the listing of Evergrande Property , and this time he also made a lot of money. After seeing Zheng Jiachun's achievements, people have to sigh, "I am worthy of being the son of a wealthy man in Hong Kong."
But think about it the other way around, is Xu Jiayin a fool? Why is he willing to buy these lands at a high price? If Xu Jiayin bought land without thinking this time, it would definitely be unreasonable. How many people in the Chinese real estate industry are more smarter than him? The reason why he was willing to buy these land was, on the one hand, because there were some human natures mixed in here, after all, this was the son of his benefactor.
Of course, as a pure businessman, he cares more about his own interests. So on the other hand, it is because Evergrande is constantly buying and hoarding land, which is also the consistent style of many real estate companies. The land in Haikou in New World is as Zheng Jiachun said, it is originally a Feng Shui treasure land. The project is located in the northwest of Haidian Island , not only connected to the main urban area of Haikou, but also surrounded by the sea on three sides. Therefore, these six pieces of land are naturally very attractive to Xu Jiayin. Evergrande Group felt that it had picked up a treasure at that time. As a real estate tycoon, Xu Jiayin doesn't look like a person who can do a loss-making business. On the surface, Evergrande gave Zheng Jiachun a lot of money, but in fact he had already made up his mind. At that time, Evergrande bought these six pieces of land at 2,850 yuan/square meter, which has dropped a lot compared to 3,733 yuan/square meter in 2013. Moreover, the 8.6 billion yuan traded by both parties was lower than the market price at that time, which was also discounted due to the relationship between the two parties. In addition, Evergrande also predicts that the future returns of these lands will not be less than 20%.
However, no matter how high the predicted return rate is, it is false, and making money is real. Xu Jiayin kept putting these grounds and not moving. What was he thinking?
On the one hand, Evergrande invested in many projects in those years, the company's revenue was continuous, and there were many projects with higher returns than those of Haikou, so I didn't pay too much attention to the 3,300 acres of land. On the other hand, he may be waiting for these lands to increase their value and wait until the price rises to the right level before starting construction. Of course, this also seems to be deliberately hoarding land. This practice is a bit like Zheng Jiachun, which is actually very common in the Hong Kong real estate industry. These big guys will not develop the land immediately after buying it. They will leave it to dry for a while. As the price of the land rises higher and higher, their profit margin will continue to increase. This is also a common method for Li Ka-shing . And this method has another advantage, that is, it is to reduce the debt ratio. Many Hong Kong real estate companies have obtained sufficient cash flow through long-term development models, and their debt ratio is basically below 30%.
Xu Jiayin also wanted to make money in this way, but in this process he ignored the key issue, which is the regulatory policies of the mainland. As the leader of real estate, Evergrande openly wanted to use the method of extending the cycle to raise housing prices. This is obviously contrary to the policy, and it will also attract dissatisfaction from many people. The government's reclaiming this land is not only a punishment for Evergrande, but also a warning to all real estate companies.
And Xu Jiayin made a big mistake, that is, he did not start construction at all. This method was not unused by Li Ka-shing. The land he bought in Chongqing for 14 years has not been developed, but has never been taken back. Xu Jiayin was confiscated in just six years. Why is this? Although Li Ka-shing has not started construction on the land, there have been some fragmented projects in progress, such as building some migrant workers' dormitories and carports. Anyway, the construction site has not been idle, but there is no formal construction. Even so, it cannot be said that he did not use the land. However, Li Ka-shing also received a lot of complaints about these things, but no matter what, it did not affect his money. Let’s look at Xu Jiayin again. He has not done anything for six years. It is of course reasonable for the Hainan government to confiscate the land.
Perhaps this 8.6 billion land is nothing to the huge Evergrande Group, but nowadays, many small problems have gathered into the debt platform that Evergrande has to face, and the blow brought about is undoubtedly fatal. It is understood that there are at least 60 undeveloped land confiscated by Evergrande in the past two years, and the amount involved has exceeded 10 billion. From the perspective of land use, even if these lands continue to be placed in the hands of Evergrande, they are a waste, after all, they no longer have the ability to develop. But for Evergrande, this is undoubtedly a worse situation. Now that the group has experienced such a big thunder, more unfinished land will probably be confiscated next. If we can't stand up this time, Evergrande will probably find it difficult to stand up again in the future.
In comparison, Hong Kong real estate giants seem to be smarter, and they know better how to control the investment cycle of . Speaking of this, I have to talk about Zheng Jiachun again. Even though he has achieved particularly outstanding results several times, after Cheng Yu-tung's death, many people still do not think that the contribution of the development of the new world is on him, but think that it is his son, Cheng Zhigang, who has supported the whole world of the company. In fact, after Cheng Yutong suffered a stroke in 2015, most of the company's affairs were managed by Zheng Jiachun. The Zhou Dafu Jewelry he invested in in the mainland has become larger and larger in recent years. As of this year, the number of stores has exceeded 5,000, and its profit last year reached 7 billion. Jewelry has now become one of the pillar industries of the Zheng family.
However, later, Zheng Jiachun made a bold decision, which was to clear up Zheng Yutong's previous real estate projects in the mainland. Since these are all the plans that Cheng Yu-tung had set up before, why did Zheng Jiachun clear it up? This is because he has smelled the crisis in advance, so he is anxious to take action. In addition to him, many Hong Kong merchants sold their mainland assets one after another, including Li Ka-shing. Several real estate giants in Hong Kong have survived after rounds of risk cycles until now. The reason why their risk resistance is strong is because they know how to avoid it. On the other hand, Evergrande and other mainland real estate wealthy people have taken over many projects in recent years. They think they have encountered a good opportunity, but they don’t know that they have taken over the risk of transfer from others.
As expected, mainland real estate companies have stormed one after another in recent years, and Evergrande seems to have fallen to the bottom. At this moment, many wealthy Hong Kong businessmen made the move to return to the mainland to invest. Some time ago, Li Ka-shing participated in the land auction in the mainland, and then spent 9 billion yuan to buy Evergrande at the bottom. Zheng Jiachun and his son have also brought the New World to readjust their investment layout, and have shown a trend of returning to mainland investment in the past two years. Not long ago, he spent 9.8 billion yuan to acquire a piece of golden land in Hangzhou, and then invested in first-tier and new first-tier cities such as Wuhan, Guangzhou, and Tianjin. It is said that Zheng Jiachun plans to spend another 10 billion this year to buy real estate projects in cities such as Guangzhou, Hangzhou and Shanghai. Someone once said that when Hong Kong wealthy businessmen started buying at the bottom, it meant that the market had really reached its bottom.Now it seems that Hong Kong wealthy businessmen are indeed investment experts who are good at using cycles and know how to buy low and sell high.
In addition to the real estate and jewelry business, Zheng Jiachun also invested in infrastructure business. He spent 1.9 billion yuan to invest in a highway in Guangxi, which attracted a lot of attention at that time. In fact, he has been laying out the mainland infrastructure industry over the years. According to statistics, Zheng Jiachun has invested in 15 expressways in many provinces and has long established a huge expressway empire. In addition, the Zheng Jiachun family also obtained the water and electricity business in Macau, and there is an insurance company worth more than 20 billion yuan in Hong Kong.
Now it seems that the new world after Zheng Yutong is really not good without Zheng Jiachun. I wonder if he can achieve another success in the mainland market next, and whether he will lend a helping hand to Evergrande?
