The Internet spreads that the long-term rental apartment leading enterprise eggshell apartment exploded, and there were news that the apartment was disconnected from the Internet, the payment to the partner and the landlord’s rent were defaulted. The former company member revealed that Eggshell is about to go bankrupt, and Eggshell Apartment responded on November 16: "There is no bankruptcy, nor will it run away. Please do not believe in rumors."
Looking back at the listing of Eggshell Apartments this year, it was originally intended to usher in a real highlight, but on the sixth day after listing, the countrywide epidemic began to break out, bringing a heavy blow to the Eggshell Apartments and the long-term rental market. In fact, eggshell has adopted a high-risk operating model in the past few years from its establishment to its exploded. In this unstable situation, each point in time marks a different eggshell moment.
That year
In November 2014, Gao Jing, the founder of Eggshell Apartment, posted a circle of friends with the content of "helping friends do a research" for a project. Gao Jing has a clear positioning of the project-"the project to help outsiders rent better houses".
Gao Jing was at Nuomi.com and Shen Boyang served as Nuomi.com's CEO. The two were closely related during this period. In 2014, Gao Jing suddenly received a call from the old leader Shen Boyang, and was told that he was willing to invest a sum of money to let Gao Jing find a more developed industry to start a business. Gao Jing, who once thought "If I can't do a good job before 35, I'll give up." After leaving Nuomi.com, he took the old leader Shen Boyang's 1.5 million VC and his own 1 million yuan of entrepreneurial funds, and went to death. Enter the long-term rental apartment industry.
In early 2015, Gao Jing founded Eggshell Apartment, a high-end white-collar apartment brand under Ziwutong (Beijing) Asset Management Co., Ltd., targeting young people and officially entering the O2O rental market. In those two years, the central government focused on long-term rental apartments and proposed a policy orientation and development framework. Five major frameworks including accelerating the development of leasing companies were proposed; the "19th National Congress" officially proposed to accelerate the establishment of multi-subject supply and multi-channel With the housing system that guarantees both rent and purchase, long-term rental apartments are quickly being swept forward by capital. With the support of the policy, capital from outside is flooding in, and the eggshell is softened with money, and the industry looks prosperous.
is advancing forward
February 26, 2018, the leading domestic Internet long-term rental apartment operator Eggshell Apartments officially announced the completion of a US$100 million Series B financing. This round of financing was jointly led by the Chinese Cultural Industry Investment Fund and Gaorong Capital. Youjin Capital, Yuanjing Capital, and BAI (Bertelsmann Asia Investment Fund) participated in the investment. The A+ round of investor Yuyue Capital continued to invest more, and Yikai Capital served Exclusive financial advisor.
On June 6, 2018, Eggshell Apartment announced that it has completed a $70 million B+ round of financing. This round of financing was led by Tiger Global. The B round investors Chinese Cultural Industry Investment Fund, Gaorong Capital, Joy Capital, Youjin Capital, Yuanjing Capital and BAI (Bertelsmann Asia Investment Fund) all continued to follow suit. cast.
In March 2019, Eggshell Apartments announced the completion of a US$500 million Series C financing. This round of financing was jointly led by Tiger Global Fund and Ant Financial, with Chunhua Capital following the investment. At the same time, CMC Capital, Gaorong Capital, and Joy Capital Wait for the old shareholders to continue to invest. What
attracts capital and continues to chase is the massive number of houses, tenants and landlords behind Eggshell Apartments. From the original 2,000, the number of operating apartments reached 419,000 in five years (as of March 31, 2020). Eggshells have entered 13 cities across the country, with a compound annual growth rate of 360%.
Eggshell Apartment landed on the New York Stock Exchange on January 17, 2020, and is the first Chinese concept stock to land on the New York Stock Exchange in 2020. On March 25, 2020, Eggshell Apartments released an unaudited financial report for the fourth quarter and full year of 2019. This is the first performance announcement of Eggshell Apartments since its listing. In the fourth quarter of 2019, eggshell apartment revenue reached 2.129 billion yuan, an increase of 112.5% year-on-year, and the net loss rate and adjusted EBITDA loss rate decreased by 12.3 and 13.2 percentage points year-on-year, respectively. In 2019, the income of eggshell apartments reached 7.129 billion yuan, a year-on-year increase of 166.5%.
Top of the wind and waves
On February 2, 2020, there are many eggshell apartments in many places across the countryDong continued to report to the Beijing Commercial Daily that the customer service of Eggshell Apartments had called the landlord many times recently to inform him that the rent payment would be delayed for some time in the future. In addition, the landlord must give Eggshell an additional month's rent reduction. As for the reason for requiring the landlord to cooperate with the rent reduction, the reason given by Eggshell's customer service is "Affected by the epidemic, it is force majeure."
On February 14, 2020, according to the China Securities Journal, the Shenzhen Municipal Bureau of Housing and Urban-Rural Development has already interviewed the relevant person in charge of Shenzhen Eggshell Apartment in response to the rent arrears to the owner of the Eggshell Apartment and the request of the owner to "rent free". The Shenzhen Municipal Bureau of Housing and Urban-rural Development requires Eggshell Apartments to attach great importance to this matter, promptly organize legal professionals to participate in the research and formulation of solutions, actively communicate and negotiate with the owners, and properly handle related issues in accordance with legal provisions and contractual agreements. The Shenzhen Municipal Bureau of Housing and Urban-rural Development will closely follow the progress of the incident.
On the evening of June 18, 2020, Eggshell Apartment announced that the company’s CEO Gao Jing was involved in an investigation by relevant departments and was temporarily unable to exercise his management duties on the Eggshell Apartment’s board of directors and the company.
On August 31, 2020, the APP was notified by the Information and Communication Administration of the Ministry of Industry and Information Technology due to violations of user rights.
On September 14, 2020, the Ministry of Industry and Information Technology released information. After the third-party inspection agency checked and re-examined, the eggshell apartment that violated the rights of users has not been rectified. According to the "Network Security Law" and "Mobile smart terminal application software preset and distribution The Ministry of Industry and Information Technology organizes the removal of the above-mentioned APPs as required by laws and regulatory documents such as the Interim Provisions on Management (Information Administration of the Ministry of Industry and Information Technology [2016] No. 407).
In mid-October 2020, the Internet reported that eggshells went bankrupt, and suppliers from all over the country collectively negotiated wages, and a large amount of project funds were owed. A group of apartment partners, decoration team workers, owners, tenants, etc. went to the Beijing headquarters to shout "Repay the money", and physical conflicts occurred on the spot. Then the public opinion reached a climax, the eggshell apartment was pushed to the forefront of the storm, and news of thunder explosions and road running began to spread throughout the network.
business model
Under normal circumstances, this industry should be a low-cost property from the landlord, and then carry out a certain renovation of the house, and then rent it to tenants at a relatively high price to make a difference. But if this is the case, then the eggshell apartment has no chance of being blown away.
1. Collecting houses at high prices and renting at low prices The real way to play in this industry is to collect money from tenants with the left hand and give the landlord with the right hand. To maximize the benefits, we must first abandon the game of making the difference and doing business. The route of long-term rental apartments is to buy high and sell low, take the house from the landlord at a high price, and rent it to the user at a low price. The goal is to make cash flow. In the actual operation process, the left hand tries to obtain as much money as possible from the tenant at one time, and the right hand gives the money to the landlord as late as possible, thus forming a pool of funds, and the management of the pool is in his own hands. Because the price for the landlord is relatively high, the landlord is satisfied, and because the price for the tenant is relatively low, the tenant is not so resistant to paying for a few months at a time. Such a pool of funds is created. The nature of the
fund pool is a kind of maturity mismatch, obtaining a large amount of funds that do not need to be redeemed in the short term. Whether it is for investment gains, scale up, or to run away, you can use it whatever you want. This is why the money collected from the tenant is a deposit of three or even six, while the landlord is settled every month.
2. Rent loans
For Eggshell Apartments, it is better to benefit from high-income and low-rents directly in conjunction with tripartite financial institutions to provide young people with rental loans. Under the rent model, the lending institution pays the long-term rental apartment in one lump sum payment, which is equivalent to cashing out the rent in one lump sum. From another perspective, it is almost a pledge of 12 or even a pledge of 24. The flow of funds There will be trouble, and the risk is passed on to the financial institutions. It is WeBank that cooperates with Eggshell Apartments. Of course, WeBank is not worried. If you don't repay the loan, you will get a credit report, unless you don't have business with formal financial institutions in your life.
3. Housing leasing ABS
When you have a bunch of houses for rent and a bunch of young people are paying rent regularly, this is a very high-quality financial asset. Young people generally become more qualified, and generally do not default on the amount of rent, and there is a deposit as a bottom line, so the risk is controllable.
And with this group of young people who continue to pay rent, such high-quality assets are generally used for asset securitization. There are manyThe long-term rental apartment company directly packaged its lease debts into ABS, and raised funds in the capital market, which amounted to more than 60 billion in 18 years. This is equivalent to obtaining further cash, and the lease ABS is also encouraged by the policy. This is legal.
can collect rent, can play jet lag with left hand and right hand, can rent cash back in cash, and can ABS in capital market. After all, just a small rental house can leverage many times the funds. For a business, nothing is more important than cash flow. Since this wave of operations has been fragrant, many real estate companies have begun to play this set.
Thunder? In addition to the impact of the epidemic and the high-risk operating model of eggshells, the long-term rental apartment industry environment where Eggshell Apartments are located has undergone tremendous changes this year. Let’s put it this way. Real estate developers’ main long-term rental apartments are all self-owned assets. This problem is relatively less troublesome. I just worry about how to rent out and don’t worry about housing. The other long-term rental apartments started with the landlord's acquisition of the house first, and then competition arose. Whoever gives the landlord the more money will rent it out. Each apartment has to be negotiated with different landlords. In the process, there will be a large number of competitors bidding each other up. The total number of houses in a community is limited. The more houses you get, the fewer vacancies will be, and the more vacancies will be able to increase their prices. The scale and cost are irrelevant, or even inversely related, which can be called a meter inversion.
After all the hard work has solved the housing problem, you have to solve the problem of someone renting your house. There are more than one long-term rental apartments in the market, and tenants will repeatedly compare prices. If they do not reduce the price, some people will reduce the price, and then other people's capital flow leverage will run away. In the long-term rental market, everyone is desperately trying to increase prices for landlords and reduce prices for customers to rent houses. It looks like they are doing charity. The difference between this price is the interest on the flow of funds.
First of all, the interest rate is not low. If you want to continue, one is to expand the listings and increase the dimensions of the plate, and the other is to keep up with your investment income. Higher returns inevitably correspond to higher risks. Many companies' investment capabilities are not so outstanding, and it is easy to make shortfalls accidentally. A moderate deficit is okay. As long as the flow of funds continues, the game of the East Wall and the West Wall will survive. What is most afraid of
this kind of fund, one is that the house cannot be received, and the other is that the received house cannot be rented out. If no one comes, this game will inevitably not be played. No one on the left is paying, and the landlord on the right has to pay the rent. As long as the landlord makes a fuss, no one has to do it. And the magical opening in the first half of this year directly interrupted the left hand of almost all long-term rental apartments, so everyone's eating habits were generally very ugly. Z12z real estate developers' own properties can still support more, and other basic problems have occurred. At this time, as long as there is a problem in one family, everyone will be at risk in the end, because the landlord and tenants do not believe this matter. Once a few players in this industry start to run, some of them will be doing warm-up exercises.
The collapse of the environment and the impact of the epidemic have made the eggshells that were originally a high-risk operation model even worse. The explosion of eggshells seems to be explained. The expansion of the operator has decreased, the return of funds has slowed down, the turnover has been stuck, and the capital chain is facing the danger of chain disconnection at any time. Where does
go? The dilemma of
eggshells is not just an isolated problem, but a common problem faced by the entire long-term rental apartment. Recently, Freedom has also been exposed to require landlords to reduce rents and other measures to ease financial pressure.
Currently, the top three shareholders of Eggshell Apartments are Tiger Fund, Joy Capital, and founder Gao Jing, holding 19.9%, 15.60% and 13.5% respectively. Relevant persons of Joy Capital stated that the lack of liquidation was due to optimism about the development of eggshells. They also saw favorable policies for long-term rental apartments this year. However, Gao Jing’s accident was an accident and Joy Capital currently has no intention to leave.
There are three ways in front of the eggshell: financing to relieve capital pressure; changing the operation of a subsidiary company; and even bankruptcy and liquidation.
The first road is very difficult. After a few waves, there is not much capital willing to lend a helping hand. The biggest possibility is to reach out to the capital that originally participated in it; and the last road was denied by the eggshell itself. Shell officials stated on November 16 that they would not go bankrupt.
On November 16, in response to media enquiries, Eggshell Apartments stated that the company did indeed encounter funds.Difficult situations, but it is actively dealing with tenants and landlords and other issues, and is also actively responding to it. Eggshell Apartment promises to never run away. The next day, there were even market rumors that I Love My Family Group would take over Eggshell, and the share price of Eggshell Apartments also rose sharply. As of November 18, it rose by 80% overnight to a closing price of 2.4 US dollars.
However, on the 18th, I Love My Family responded to the rumors of taking over the eggshell apartment. The I Love My Family Group denied this, saying "Nothing". Netizens said that "this wave of operations directly cut the leeks naked, and the eggshells are ready to run away." Now it seems that some colleagues have already taken the first step. A real estate agency that competes with the brand is digging out employees and listings. The
eggshell has only been on the market for 11 months, but now it has reached the moment of life and death. The explosion of the eggshell apartment has sounded a wake-up call for colleagues in long-term rental apartments. Risks must be eliminated in a timely manner, and the regulatory authorities must quickly plug the financial loopholes here. This is the way to protect the rights and interests of more people in the future.
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