Evergrande Real Estate has fallen.

Recently, China Evergrande (03333. HK (hereinafter referred to as "Evergrande") announced that it expects the net profit of core business and recorded net profit to decrease in 20 19. Among them, the core net profit is expected to be about 40.8 billion yuan, down about 48% from last year; The estimated net profit is about RMB 33.5 billion, which is about 50% lower than last year.

On the same day, Evergrande Health also disclosed the 20 19 performance report. Evergrande Health said that it expects to record a net loss of about 4.9 billion yuan in 20 19, compared with a net loss of1428 million yuan in the same period last year.

Evergrande Health said that the company's loss was mainly due to the expansion of new energy automobile business, which is still in the investment stage, and the related expenses and interest expenses such as purchasing fixed assets and equipment, research and development increased. Evergrande Health predicts that the company will generate a net loss of 2 billion yuan in 20 19, a net loss of 3.2 billion yuan in new energy automobile business and a net profit of about 300 million yuan in health management business in the same period.

This kind of loss is actually reasonable. For Evergrande, its "Buy in buy buy" strategy is simple and direct, which can fill the technical bottleneck of new energy vehicles as soon as possible, but the sequela is that it cannot make ends meet. According to the plan of Xu Jiayin, Chairman of the Board of Directors of Evergrande Group, Evergrande will invest another 654.38+0.5 billion yuan in new energy this year.

Evergrande is indifferent to this investment scale. At the aforementioned meeting of Evergrande, Xia Junhai, president of China Evergrande, once said that Evergrande's assets exceeded 2 trillion, its cash balance was 280 billion, and its annual profit was 70 billion. "Flower120 billion supports the development of emerging industries and will not hurt the bones."

It's just that under the current epidemic situation, Evergrande will continue to let real estate transfuse blood to new energy vehicles and maintain dual-track operation, which is a great test for Xu Jiayin.

1

Real estate main business is under pressure

In the first half of 20 19, the financial report of Evergrande Group showed signs of stress.

First, the advance payment (contractual liabilities) is too small, with120.5 billion left in the first half of 20 19, while Country Garden can have 607.6 billion, and Vanke's annual report shows that it is 62 16 billion, which is obviously not a quantity.

Second, the number of houses under construction in Evergrande's inventory is 65.438+0303 billion (completed properties held for sale), and it is growing. This indicator is also very special. Real estate top 5 20 19 was reported, Country Garden 31300 million, Sunac 48.8 billion, Vanke 4.7 billion, and other real estate is often only a few billion.

The debt situation is also not optimistic: in the first half of 20 19, the total debt was10.75 trillion, the asset-liability ratio was 83.7%, and the interest-bearing debt was as high as 813.2 billion, which needs to be repaid before June 30 this year. The total cash on hand is 288 billion, which can't completely cover this debt and needs to be repaid by sales. At present, Evergrande urgently needs to speed up destocking and optimize cash flow.

The real estate industry has a pain point, that is, because of its high leverage and high turnover, it needs to borrow a lot and reserve a lot of land. Under the condition of downwind, if the cash flow is tight and slightly unbalanced, there will be enterprise crisis.

In fact, before the end of the epidemic, on February 16 this year, Evergrande Group announced that it would launch the biggest discount in its history on February 18, 2020: from February 18 to February 29, houses (including apartments and office buildings) for sale nationwide can enjoy a 7.5% discount, and on March 65438. If the demolition rate of single building is over 90%, you can enjoy an additional 4% discount.

What is even more helpless is that housing prices in third-and fourth-tier cities have been artificially high for many years. The price reduction not only touched the interests of buyers, but also attracted more people to wait and see. Under the background of continuous turmoil in overseas capital markets, Evergrande's financing at home and abroad will be limited. How to maintain the normal cash flow of real estate business is a test of Xu Jiayin's ability to grasp the overall situation.

In addition, under the condition of dual-track operation, whether Evergrande can continue to plan blood transfusion for new energy vehicles under the pressure of real estate cash flow has to be questioned.

2

The great cause of automobiles has added another problem.

Xu Jiayin once said that in three to five years, it will become the largest and most powerful new energy automobile group in the world, with an annual output of 5 million vehicles in the next 10- 15 years. The product line covers mid-range, mid-range and high-end, involving cars, SUVs, MPV and other fields.

To achieve this goal, Evergrande's three-year investment budget in the field of new energy vehicles is 45 billion, including 20 billion in 20 19, 500 million in 2020 and 202 10 billion.

However, judging from the pressure of the real estate industry, the obvious variables are increasing whether the next 25 billion investment plan can be put in place.

Up to now, Evergrande's planned investment in new energy vehicle projects has exceeded 300 billion yuan, including the promised investment in the construction of two bases in Guangzhou Nansha (65.438+06 billion) and Shenyang (65.438+02 billion). Now in the case of such a shortage of cash flow, it is not ruled out that the construction of these two bases will be delayed.

In addition to the uncertainty of investment funds, about 180 employees of Evergrande New Energy Automobile will also face departmental adjustment. It is reported that there is an unprecedented employee transfer within Evergrande Group, and employees in different departments suddenly receive a transfer order to sign up for Evergrande's newly established company "Hengdabao". But as for the new company, apart from the leadership, the specific functions have not yet been determined.

According to insiders, "Hengdabao" may be similar to Evergrande's online house selling APP "Hengfangtong" as an online display and sales channel for all goods such as Evergrande real estate, automobiles and even luxury goods, so as to reduce sales costs.

It is not difficult to see that on the road of building cars, Evergrande has also begun to consider how to save cash flow and improve the efficiency of capital use.

Automobile industry is a typical heavy asset industry, and it needs enough economies of scale to make cars profitable. Tesla, the global leader in new energy vehicles, sold more than 360,000 vehicles in 20 19. Even so, it did not achieve full-year profit. Weilai Automobile, a leading domestic new power enterprise, has been established for more than five years. The latest financial report data shows that Weilai is still suffering from negative gross profit.

At present, there is no off-line production of Evergrande's self-produced models. Only in March this year, at the Geneva Motor Show on March 3, 2020, Evergrande and Koenigsegg jointly launched Gemera, a new energy supercar, with a limited production of 300 vehicles. The starting price was as high as 6.5438+0.38 million euros, and 30 vehicles were sold on the same day, showing the integration strength of Evergrande after acquiring the automobile industry chain.

Xu Jiayin said earlier that the first model of Evergrande's automobile brand "Hengchi" is scheduled to be unveiled in the first half of 2020, with mass production of 202 1. In short, it is too early to talk about the profitability of Evergrande's new energy automobile business. But at present, focusing on the new energy automobile business and telling the story of Hengchi automobile well may also be a rare advantage chip in the hands of Evergrande Group.

Some insiders also analyzed that Evergrande's layout of automobile business may be another way of real estate development.

Earlier, at the communication meeting of Evergrande analysts, Xia Junhai, president of China Evergrande, said: When negotiating with local governments, Evergrande will establish a model, including the estimated loss of local investment in building factories, employment opportunities and tax increase brought by the automobile industry, and then use this model to ask local governments to support residential and living land. Xia Junhai also said that Evergrande will launch a "buy a building and send a car" model in the future.

Is Evergrande's dream of building a car pure? Can it be steadily promoted under the downward trend of the real estate industry cycle? These questions will soon be answered in the 20 19 annual performance report released by Evergrande at the end of March and the first production car to be unveiled in the first half of the year.