On the afternoon of April 30th, Vanke held the 2023 Annual General Meeting of Shareholders. At the meeting, Yu Liang, Chairman of Vanke’s Board of Directors, gave a frank response to the concerns about Vanke’s share price and the progress of a stable business plan.
Yu Liang said that the company has made a package plan of "slimming down and keeping fit", making overall plans for debt reduction and high-quality development. By firmly slimming down, adjusting the financing mode and reducing risks, the company will focus on the three dominant main businesses of comprehensive residential development, property services and rental apartments in the future, so that the company can return to a sustainable track and continue to lead the way in the new stage of real estate development.
Regarding the stock price fluctuation that investors are concerned about, Yu Liang admits that the fate of the management team is tied to the fate of the company. Since becoming a director of Vanke in 1994, he has only bought Vanke shares for 30 years and never sold them. The current performance of the stock price is definitely not up to the requirements of shareholders, and it is completely criticized by shareholders. At present, the management team is working out a plan to increase its stock holdings.
In Yu Liang’s view, the key to boost the stock price is to do a good job in the company, reduce risks, improve fundamentals and seek long-term healthy development. In this regard, Vanke has formulated a package to achieve the three projects.
The first is "debt reduction". In the next two years, Vanke will reduce its interest-bearing debt by more than 100 billion yuan, and the total scale of interest-bearing debt will be reduced by more than half in the next five years. Secondly, complete the "transformation of financing mode", from the mode of unified borrowing and unified repayment, the main credit-oriented, and gradually turn to the financing mode of project and asset credit; Finally, it is to complete the "focus on the main business", free up limited resources, and do a good job in developing comprehensive residential areas, property services and renting apartments.
In Yu Liang’s view, the main contents of high-quality development of real estate in the future are good houses, good communities and good services. Vanke focuses on three major businesses, the market has prospects and the society has needs. The improvement of residents’ living conditions, rental housing, and the demand space and prospect of property services are still broad, and Vanke has more advantages in these businesses. Residential and property services are the starting point of Vanke’s development, and it has established comprehensive competitiveness, and the scale and operational efficiency of rental housing business have also achieved the first place in the industry. On the whole, Vanke is still one of the real estate enterprises with the widest customer base, the richest scenes and the strongest comprehensive construction and operation capabilities. I believe that after the focus, the three main businesses will develop better.
Yu Liang explained the package in detail, mainly including two stages. The first stage is to slim down firmly, adjust financing mode and degrade risks. Specifically, in addition to the three main businesses, other businesses will be withdrawn, and non-main financial investments will be cleared and transferred. Resolutely and vigorously promote large-scale asset transactions such as commercial offices, and plan to complete 20 billion yuan each year. At the same time, actively complete the transformation of financing model. In the second stage, Vanke will focus on its main business, do fine business and become the benchmark of products and services in the industry.
Yu Liang said that the package is not only a plan of contraction and pressure drop, but also a plan of development and enterprising. The first stage of slimming is to gather resources and lay the foundation for the second stage. For the three dominant businesses anchored, Vanke will concentrate its resources and management energy to become stronger and maintain a continuous lead.
Finally, Yu Liang expressed full confidence in Vanke’s future. He said that the profound adjustment of the industry to a new stage of development is bound to be a process of slimming and strengthening the body. The process is by no means easy, but the result is a stage leading to healthier and high-quality development. The current pressure is phased, and initial results will be achieved in the next two years. Only by coordinating debt reduction and high-quality development can the company develop sustainably. Vanke’s management team has always cherished and attached importance to its professional reputation, and will continue to introspect and redouble its efforts.
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