Car companies began to “check out”

Car companies began to "check out"

Following the transfer of 80% of Dongfeng Motor Real Estate Co., Ltd. (“Dongfeng Motor Real Estate”) three years ago , Dongfeng Motor has also transferred the remaining 20% ​​of its shares to China Merchants Shekou. So far, Dongfeng Motor has completely withdrawn from real estate.

Although Dongfeng Motor’s “check-out” intention has been decided, in recent years, many auto companies have gathered to enter the real estate industry, such as Chery Real Estate, Great Wall Industry, Love Real Estate, Hengtong Real Estate and other auto company real estate companies that continue to appear.

On the other hand, dozens of real estate companies such as Evergrande, Baoneng, China Fortune Land Development, Country Garden, Greenland, Vanke, R&F, Agile, etc. are also pouring into the auto industry.

Car companies sell houses and real estate companies build cars. The current Chinese business world is performing a magical scene. “Uninitiated” players enter the new track, are real estate companies fast to build cars, or car companies fast to hand over houses?

Dongfeng Motor “check out”

After the completion of the share conversion of Dongfeng Motor Real Estate, it officially became a 100%-owned subsidiary of China Merchants Shekou.

Among them, the 80% equity of Dongfeng Motor Real Estate had a transaction price of 872 million yuan. According to the Shanghai Property Rights Transaction last year, the remaining 20% ​​equity of Dongfeng Real Estate had a transaction reserve price of 198 million yuan. In the two equity transfers, Dongfeng Motor recovered at least 1.07 billion yuan in cash.

Leju Finance was informed that at the time of the equity transaction in 2018, Dongfeng Motor Real Estate included more than 10 projects in Wuhan and Shiyan, with a total volume of more than 820,000 square meters. Roughly converted, the land cost of China Merchants Shekou was only 1036.85 yuan per square meter.

For this transaction, China Merchants Shekou once stated that the target projects are mainly located in Wuhan City and Shiyan City, which is in line with the company’s city selection strategy, which is conducive to the company’s further increase in market share in Central China and supplements the company with high-quality project resources. .

In fact, Zhu Yanfeng, chairman of Dongfeng Motor, wanted to get rid of the “burden” of Dongfeng Real Estate for a long time.

Public information shows that Dongfeng Motor Real Estate was restructured on the basis of the original Dongfeng Motor Company’s Life Service Department in 2000, and was jointly funded by Dongfeng Motor and Dongfeng Motor Wheel. However, on the eve of Dongfeng Real Estate’s 80% equity transfer, Dongfeng Motor Wheels withdrew from Dongfeng Real Estate’s shareholder sequence, and Dongfeng Motor Real Estate was wholly-owned by Dongfeng Motor.

In the early days, established state-owned enterprises generally had the business philosophy of “turning enterprises into society” to solve the problem of employee housing placement.

Dongfeng Motor Real Estate is the product of this background. For a long time, Dongfeng Real Estate has existed as the logistics department of Dongfeng Motor, responsible for the housing construction, community management and environmental greening of Dongfeng Motor Company.

In 2010, the State-owned Assets Supervision and Administration Commission included Dongfeng Motor Group in the “check-out order” list of 78 central enterprises, requiring central enterprises whose main business is not real estate to withdraw from the real estate market, but the implementation effect was not satisfactory. In 2018, in the context of “no speculation in housing and housing”, the state once again reiterated the “check-out order” of central enterprises, requiring companies not on the reserved list to make substantial progress and drafted a clear timetable.

The central enterprises have accelerated their “check out” speed. For example, State Grid has completed the equity allocation; China National Aviation Group also announced its full withdrawal of real estate projects; China Construction Eighth Engineering Bureau listed and transferred all the equity of its six real estate subsidiaries; China Minmetals divested Real estate business to listing platform, etc.

Under the pressure of the “check-out order”, Dongfeng Motor’s withdrawal from the real estate business was put on the agenda. At the same time, China Merchants Shekou is planning to focus on entering Shiyan and Wuhan.

In this context, the cooperation between Dongfeng Motor and China Merchants Shekou has become a matter of course. One to get rid of the “burden” and the other to accumulate reserves at low cost is a win-win situation.

Car companies “yaw”

Although Dongfeng Motor has completely withdrawn from real estate, in recent years there have been batches of auto companies entering the real estate industry.

Among the many car companies that have entered the real estate market, Great Wall Motors is the most ambitious. “The sales target for the next five years is to reach 100 billion yuan.” The person in charge of Great Wall Industry once said publicly.

Wei Jianjun, Chairman of Great Wall Motors, entered the real estate industry mainly relying on two real estate operation platforms-Baoding Great Wall Industry Co., Ltd. (abbreviated as “Baoding Great Wall Industry”) and Baoding Love Real Estate Group Co., Ltd. (abbreviated as “Love Real Estate”) .

Both companies are independent of Great Wall Motors. Baoding Great Wall Holdings Group Co., Ltd. (“Baoding Great Wall Holdings”) holds 100% of the shares. The ultimate beneficiary is Wei Jianjun, who holds 99% of the shares.

Among them, Love Real Estate was renamed from Baoding Bochuang Real Estate Development Co., Ltd. The real estate development of “Bochuang” earlier was mostly the supporting staff apartments of Great Wall Group and its subsidiaries. After Wei Jianjun formally entered the real estate industry, Baoding Great Wall Industry was established, and Borch was renamed Love Real Estate.

In order to sprint to the goal of 100 billion yuan, Great Wall Holdings has started frantically acquiring land and digging people frantically.

According to incomplete statistics, in 2018 and 2019, Great Wall Industries acquired about 663,100 square meters of land in Baoding, its base camp, and the total amount of land acquired was about 1.439 billion yuan. By 2020, Baoding Great Wall Holdings will acquire nearly 5 billion yuan in land. Since 2021, Love Real Estate under Baoding Great Wall Holdings has acquired land in Suzhou, Guangzhou, Chengdu, and Changsha for 1.845 billion, 1.33 billion, 1.469 billion, and 317 million yuan, totaling 4.961 billion yuan.

Like Wei Jianjun, there are Chery Real Estate owned by Chery Holdings, Hengtong Real Estate owned by Huatai Automobile, and Fengshen Automobile Real Estate owned by Fengshen Motor.

In addition, the development of “car towns” is another way for auto companies to explore real estate, such as BAIC Group’s “BAIC Group Automobile Town”, GAC Group’s “Intelligent Auto Town”, and FAW Group’s “Hongqi Town”, etc. .

Take Guangzhou Zhilian Auto Town, which entered the market in June 2020, as an example. It was jointly created by the four major state-owned enterprises of Guangzhou Automobile Group, Zhujiang Industrial, Yuexiu and Poly Development. The project consists of 37 buildings in Zhilian Garden and Zhirui Garden. In addition to targeted sale of houses, there are also market-oriented houses.

According to industry insiders, auto companies enter the real estate field, or to solve their own property matching problems in production and office. For example, Xiaopeng Motors, a new force in car-making, registered and established Zhaoqing Kunpeng Real Estate Development Co., Ltd. in May 2019, holding 73.84% of its shares. This company was established to prepare for the daily operations of its Zhaoqing plant.

In addition, there are also car companies or to absorb the profits from real estate development to offset the investment of car companies, supplement the company’s liquidity, and increase overall revenue. The most vivid example is Haima Automobile.

In 2019, Haima Automobile was subject to a delisting risk warning by the Shenzhen Stock Exchange, and the stock name was changed from “Hippocampus Automobile” to “*ST海马”. In this year, Haima Automobile sold 401 properties and some real estate properties, and divested its automobile research and development business. It turned losses into profits that year and ended its losses for several consecutive years.

In 2020, Haima will continue to sell 145 properties, and it will successfully “get the star” in June. Since May 27 this year, its name has changed back to “Hippocampus Automobile” and it has successfully “taken off its hat”.

The reason why Haima Motor has a house to sell is due to the previous support of the local government. Beginning in 2016, Haima Automobile has gradually shifted its development focus from Haikou to Zhengzhou. In the process, it has obtained land for the development of factories and supporting resources.

However, real estate is not a master key, and there are countless car companies that have “broken down” into real estate, but there are few successful cases.

Zotye Automobile, which was established in Zhejiang in 2003, is also the main car manufacturer “Yaw”. In addition to the automobile business, Zotye Group has also participated in a number of real estate projects in Yongkang City, Jinhua, Zhejiang. Among them, Zotye Town, with a total investment of 6.55 billion yuan, was once listed as a key new ecological town project in Yongkang City. The chain broke and ended, and the original sales center has been set up as a creditor’s rights declaration office.

Since 2020, Zotye Automobile’s vehicle business has been stagnant, and the latest announcement shows that it is also facing the risk of delisting.

On July 21, Sunshine City (000671.SH) acquired the Zotye Township project through acquisition, including six plots of land and one developed plot.

It is understood that the total area of ​​the six plots is 352,400 square meters, and the built-up area is 856,500 square meters. About 300 sets of commercial housing on the developed plots have all been sold. After the formal agreement is signed, Sunshine City Zhejiang Real Estate will undertake the Obligation of land plot construction.

When Zotye Automobile has reached this step, the outside world has pointed the finger at the company’s “irregular business”, especially the financial problems caused by its blind investment in real estate. In addition to having many plots in Yongkang, Zotye Automobile also has enclosures in Inner Mongolia and Huangshi, Hubei, investing a large amount of money in the real estate industry, which has also led to insufficient investment in the main automobile business.

Coincidentally, Lifan Group established Lifan Real Estate for the construction of self-use real estate, and began to build residential projects by itself, and its business gradually involved real estate development, leisure and vacation and other fields.

However, on the one hand, due to problems with its own development and operation, on the other hand, it was also dragged down by Lifan’s automobile business. Lifan Real Estate was slow to expand in the real estate field and embarked on the road of “selling a house for self-help” many years later . In addition, Chery Automobile also listed and transferred 103 residential properties including Wuhu Chery BoBo City on the property rights exchange.

In fact, car companies have to do sideline business as a last resort. At present, the overall environment of my country’s manufacturing industry is not ideal, the profitability is relatively low, and the automobile industry is experiencing a market downturn. Car companies use their funds to invest in real estate to expand their profitability, and in the end they are still earning money for car building.

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