The Overseas Chinese Town Is Moving Ahead With Its Assets.

As a real estate company with a two main industries, and no big ambitions for the scale, Oct continues the rhythm of "selling, selling and selling" in the past two years.

In October 22nd, the Beijing property exchange disclosed that OCT had publicly transferred the 50% stake of Shanghai Huahe Real Estate Development Co., Ltd. (hereinafter referred to as Shanghai Huahe), and 50% of Shanghai Hua Yan real estate development Co., Ltd. (hereinafter referred to as Shanghai Huaqiao), with a total selling price of 4 billion 712 million yuan. The two companies corresponded to the "two phase of Su River Bay", and OCT asked the transferee to take over at the same time.

This is the thirteenth item company that has been publicly sold overseas Chinese town this year. In October alone, three projects were listed.

As a central enterprise with "real estate license", OCT has obvious advantages in capital and cost. In the case of rising market regulation, this advantage is even more enviable. But in recent years, Oct seems to have no intention of overly pursuing scale growth. On the contrary, since 2017, the company has frequently sold its real estate projects, and sold at least 18 sub company equity and 1 asset packs in 2018 alone.

In response to the transfer, Oct replied to the twenty-first Century economic report that this is the need for the strategic transformation of Huadong company. At the same time, "through asset disposal, equity transfer, cooperative development" and other ways to accelerate the return of cash, thereby improving the overall asset turnover efficiency, this is also an important part of the OCT Group's new strategy, and is an important path to achieve high quality development under the new development mode.

Compared with the "main theme" of the real estate industry's pursuit of scale, Oct's thinking is quite different. But combing the development process and business characteristics of the company is not difficult to find that the formation of this situation is not only the result of active transformation, but also the components of passive adjustment.

It's already sold at two degrees.

Shenzhen overseas Chinese town Holdings (the "overseas Chinese town") landed on the capital market in 1997, and the parent company OCT Group was the central enterprise under the state owned assets supervision and Administration Commission. At the beginning of the listing, the main business of OCT was tourism. Since 2000, the company has been involved in the field of real estate, and gradually formed the development mode of "tourism + real estate".

Through the high turnover of real estate business, it is the main profit mode of overseas Chinese town that it has invested large amounts of investment and has a long cycle of return. Among them, many projects belong to two kinds of formats binding land and development, that is, supporting the development of real estate around the theme park. This mode can form an effective synergy between formats and funds, which can not only reduce the cost of land acquisition, but also facilitate the de localization and operation of real estate projects.

In 2011, in the "rectification of state-owned assets related to housing" in the spring tide, Oct became one of the 16 central enterprises permitted to engage in real estate business.

In 2015, Oct started to transform from "tourism + real estate" to "cultural + tourism + urbanization" and "tourism + Internet + finance".

But for a long time, Wen brigade and real estate have always been the main business of the company. As a "stabilizer", the gross profit margin of real estate business is relatively high, and the proportion of revenue is also large. In the first half of this year, the gross profit margin of real estate business reached 80.57%, and its revenue was 12 billion 100 million yuan, accounting for nearly 7 percent.

Since the second half of 2017, overseas Chinese town has frequently started asset mobilization. The main method is to retain and upgrade the cultural tourism projects, sell poorly performing real estate projects, but will also get real estate plots in some hot spots.

"Through the adjustment of formats, overseas Chinese town intends to play down the image of" developers ". Financial commentator Yan Yuejin told the economic report twenty-first Century.

According to incomplete statistics, in 2018, Oct sold at least 18 subordinates' equity and 1 asset packs. Since 2019, the company has listed 13 item company shares.

Most of the projects sold are located in a second tier city, some of which are still in the core area, many of which are "land kings". The "Su he wan two phase" was sold by OCT and Huarun in January 2016. The price was 6 billion 900 million yuan, and both sides accounted for 50% of the shares. At the end of 2017, Oct also sold the "land king" in Fengtai, Beijing, two times in November 2015. The plot was acquired in November 2015 with a cost of $8 billion 300 million.

The common characteristics of the projects encountered are the large scale of occupied funds and poor operation. Take the two item company listed as an example, as of September 30th, the total liabilities of Shanghai Hua Chen were about 501 million yuan, and the total liabilities of Shanghai Hua he were about 149 million yuan.

According to the 2018 annual report, the total investment in the two phase of the Su Hewan project is 12 billion 900 million yuan, the actual cumulative investment quota has reached 7 billion 960 million yuan, and it will be completed until December 2020. At the sales side, according to the currently available data, the project sold 1 billion 996 million yuan in 2017 and only 217 million yuan in the first half of 2018.

One detail is that Shanghai Hua He, one of the two item company sold, was listed on the Beijing stock exchange in October 19th last year, but failed to sell it at last.

Short-term debt doubled

A senior practitioner in Beijing told the twenty-first Century economic report that in the real estate industry, OCT has never been known as "high turnover".

The competitiveness of overseas Chinese town's tourism business is very strong, which can be regarded as the core competitiveness of the company. The competitiveness of real estate is relatively weak, and more depends on the quality of the land itself and the blessing of the cultural tourism industry. The person said that compared to separate residential plots, OCT is more willing to operate the land with both residential and cultural properties, because the latter's cost of land is relatively low, and it is easy to form synergy.

In response to the sale of the project, in response to OCT's twenty-first Century economic report, the positioning of the two businesses is not consistent: "in the implementation of the strategic transformation of OCT Group, the East China Group (the project is part of the East China company) will continue to adhere to the first brand camp of the East China regional tourism market in the cultural tourism block, and enter the forefront of the industry in the real estate sector to enhance the competitiveness of the real estate market."

In the handling of this round of assets in Oct, we can see the idea of putting the elements of tourism into real estate.

Over the past two years, overseas Chinese town has also been heavily increased while transferring projects, and 16 new land projects have been newly acquired in the first half of 2019. According to public information, the proportion of residential land in OCT has been reduced in recent years, and the comprehensive plot with cultural tourism has increased significantly, including some characteristic town projects that conform to the company's practice of "new urbanization".

Yan Yuejin believes that the main idea of overseas Chinese town is to recoup funds by transferring large sums of funds and poorly performing projects, thereby raising new areas and formats.

Frequent sale of items, in addition to transformation needs, is also closely related to financial pressure.

As of the first half of this year, the total liabilities of OCT exceeded 100 billion, of which short-term loans were 28 billion yuan, an increase of 130% over the end of last year. Over the same period, the net debt ratio of OCT was 106.22%, which was also higher than that at the beginning of the year.

In the 2019 China Daily of OCT, it is emphasized that it is the absolute principle to insist on "repayment" in the second half of the year, so as to speed up the transformation of projects. In addition to formulating flexible pricing and sales strategies, "decisive decisions are made for the products that are difficult to remove, and they are actively invigorated through asset securitization, equity transfer and asset disposal."

Similar to the project, overseas Chinese town has many billions of big volume projects. Yan Yuejin believes that large volume projects occupy a large amount of capital in the early stage, and the development cycle is long. Once the property market goes down, it will not be conducive to capital turnover.

Over the past two years, overseas Chinese town has gained a large amount of cash flow by selling shares in the project. The company's 2017 annual report shows that "Beijing overseas Chinese Jubilee, Shanghai Tianxiang business, Chongqing overseas Chinese town land transfer of shares and Nanjing overseas Chinese town, Nanchang overseas Chinese town and other property companies cooperation, bringing the company nearly 20 billion of the cash inflow." In the 2018 annual report, Oct did not disclose the proceeds from the equity transfer project, but the industry estimates that its size will not be less than 20 billion.

Yan Yuejin believes that with the continuous regulation of the property market, the OCT will continue to sell the project. From the perspective of capital chain, it is not a bad thing to sell real estate projects with low turnover rate. But Wen brigade project also has the characteristics of large initial investment and long cycle of return. If the proportion of real estate business is reduced too much, it will not be conducive to capital turnover. Whether the OCT can succeed in this direction will still need to be observed.