If there are melons in the real estate circle, it is really sweet.
On November 24, the Internet began to circulate a document called "Open Letter to All Investors of Fusheng Group" (hereinafter referred to as "Open Letter"). Among them, Forson International (00627.HK) publicly accused Shimao Group (00813.HK) of “doing nothing about military ethics”. It had originally signed the "Account Sharing Agreement", but it had to bypass the related parties and cooperate with Hengfeng Bank to transfer out the joint venture The company's funds were 269.93 million yuan.
Subsequently, "Economic Observer Network" contacted Shimao Group, and the reply was: The account does exist, and it also exists to help Fusheng alleviate the difficulties, but the act of occupying Fusheng does not exist.
In Shimao's description, it is more like a brilliant doctor, who left a bottle of "Kaisailu" when Fusheng was not operating well. As to whether to use it, how to use it, and whether it can get rid of the fetters in the belly, it is Fu Sheng's own business.
After that, "Leju Finance" contacted Fusheng again, and the reply was that "the information that the outside world has not verified by the four parties is falsely spread." In short, the "Open Letter" is fictitious and the statements involved have nothing to do with Fusheng. A copy of the conquest was unclaimed in the end!
Of course, don't think that the story is over. In the real estate industry, negative rumors are also valuable. Many times, everyone is so used to falsehood that even if the truth is spoken, it looks like a falsehood and can only exist in the form of rumors. This story is like "The Emperor's New Clothes"-the truth is so false.
Let the bullet fly for a while, maybe there are some melons.
White Knight and Cinderella
Looking back at the grievances and grievances between Shimao and Fusheng, both companies have a feeling of "collapse of human design".
In the eyes of Chairman and President Pan Weiming, Fusheng Group has a very broad development prospect. This is a real estate company with abundant warehousing. Only the old renovation project in the Guangdong-Hong Kong-Macao Greater Bay Area has a construction area of 10 million square meters, which is not considered to be a massive land reserve spread across Fujian, Hunan, Zhengzhou and other places. So Pan Weiming set a goal of breaking 60 billion yuan in sales in 2018 and 130 billion yuan in 2019.
Fortunately, Fusheng did not achieve its ambitious goals. In the first half of 2018, the net cash flow generated by operations was still 1.154 billion yuan, and by the end of June 2019, it had fallen to -327 million yuan-Fusheng has no shortage of land. It is liquidity. If Cinderella wants to go to a banquet and be found beautiful, she also needs the magic of the fairy godmother.
Entering 2020, Fusheng ushered in a turning point.
On January 13, Fullsun and Shimao held a press conference to announce the establishment of a strategic partnership between the two parties to jointly develop real estate development, old city renovation, property management and other businesses. In the most difficult time for Fusheng, Shimao played the "white knight" and turned the tide.
During the speech session, Xu Shitan, vice chairman and president of Shimao Group’s board of directors, said solemnly that the cooperation between the two parties is to establish a new brand of Shimao Fusheng and achieve the effect of "1+1>2"; at the post-meeting interview, Xu Shitan was even more revealing, leaving a famous saying: "The era of'big fish eat big fish' is here".
Looking back, this sentence is paradoxical. If a new company is established to alleviate the difficulties, Shimao’s job is nothing more than smooth sailing. Whether it can survive depends on the vitality of the new company. But if it wants to "eat the big fish", does Shimao want to swallow Fusheng entirely?
Since then, this relationship that was not clearly stated at the time has laid the roots for the cooperation between the two parties.
According to media reports, after the establishment of the cooperation, Fusheng began internal adjustments. Not only did the management begin to replace, but also gradually adjusted the proportion of core assets and equity to further stabilize Shimao's dominant position in the cooperation between the two parties. But at this time, Shimao began to adjust its external caliber and no longer recognized the fact of the acquisition, indicating that the two parties were only cooperating.
"Shimao did not purchase Fusheng, so it will not help it to pay off its debts. Fusheng can only wait for the money." In the middle of the year, Shimao Tax Director Zhang Lin had already put the cognitive deviations to the face when talking about the cooperation between the two parties. Top-Cinderella still did not marry the white knight in the end.
"Little Abacus"
In an avalanche, no snowflake is innocent. In this avalanche, both clouds of Shimao and Fusheng were snowing.
"Strive to achieve an average annual growth rate of more than 40% in revenue in the next three years (2019-2021), and plan to spin off hotels and properties in the next three years." Xu Shitan's aggressive expansion has long been "Sima Zhao's heart." In order to achieve rapid growth, Shimao aggressively acquired assets from outside.
Public data shows that in the first half of 2019 alone, Shimao has acquired more than 20 projects from real estate companies such as Tahoe, Yuetai, Wantong, Mingfa, etc., with a value of 180 billion yuan, accounting for the entire first half of the new value added. 71%. A large number of acquisitions once made Shimao's liabilities as high as 304.7 billion yuan, a year-on-year increase of 32.5%, of which the total current liabilities reached 214.3 billion yuan.
Of course, behind the risks implies the expansion of scale. With these investments, Shimao's sales in 2019 increased to 260.07 billion yuan, a year-on-year increase of 48%, and it will soon be among the top ten in the industry. Such rapid growth shows that the goal of Shimao under the leadership of Xu Shitan is not just as simple as the “top ten”.
For Shimao to become the leader, there must be a bigger acquisition and more aggressive moves. For Shimao, even if the target is not Fusheng, there will be other acquisition targets coming into view. As for Fusheng, Shimao only fancyed its relatively rich land reserves in its warehouse.
Ke Fusheng will never be willing to be leeks. When there was an operational crisis in 2019, Pan Weiming's remarks to comfort creditors had extremely high credibility. After all, two years ago, Fusheng was still a leading real estate company that added 13.588 million square meters of land reserves within a year, and it was worth more than a handful of leeks.
But the unlucky speed is always faster than imagined. With the obvious volatility of bonds such as "20 Fusheng 02", "19 Fusheng 01", "20 Fusheng 01", and "19 Fusheng 02", investors who can get away have left the market. As for land, for the whole of 2019, Fusheng did not add new land, and the land bank was only 3,690,800 square meters-not enough for the one-month contract sales of the leading real estate company.
Public information shows that Fusheng has been listed as a person to be executed as many as dozens. It has to deal with creditor lawsuits and employees to ask for investment funds, and become a headache that the company management must face: facing a debt of 70.6 billion yuan, one end is sales On the other hand, they are unable to make blood, and on the other hand, there is no capital injection.
Cinderella, who came from a noble family, stepped into the wealthy family, and she had to drop a crystal shoe to support the facade, but Fu Sheng was not a nobleman, but actually just a girl who worried about marriage. How can such a large cognitive deviation finally come together?
Business field
In this way, the relationship between Shimao and Fusheng is not a "white knight" and "Cinderella" at all. Of course, this kind of story was staged many years ago.
In September 2006, Road King Infrastructure (01098.HK) once purchased 95% of Sunco's shares for 1.8 billion yuan.
But a year later, Shan Weibao, who mentioned the acquisition again, was disappointed. In Sunco’s assets, there were problems such as borrowings, defaults, and project arrears. Shan Weibao had to continue to invest funds to fill in the many big holes left by Sun Hongbin; Sun Hongbin also used Sunco B’s purchase options because of Shan Weibao’s unauthorized use , Constantly spreading news that he wanted to go to court with him.
"The acquisition of Sunco made me half tired." Shan Weibao once sighed, so it seems that Shan Weibao has lost; Sun Hongbin, who lost control after Sunco was acquired, is also angry and seems to have lost too. From win-win to lose-lose, the story is that simple.
Lu Jin and Sunac back then, Shimao and Fusheng at that time. Shimao is not that noble. It is just the "body" of Fusheng, that is, those land reserves that are still shining. As for debts, investor relations, and historical issues, they will naturally be dumped.
Fusheng Group should give up fantasy and accept reality before deciding to "sell itself"-I am not a "sweet potato", and there are not many alternatives. If someone knocks on the door to buy, it is likely to be "dismembered" in the end. Good resources become food for big fish, and the burden will be pushed far and far away.
Unfortunately, when deciding to cooperate, both parties had unrealistic judgments about each other. In addition, public opinion is willing to tell the story of a "white knight" hero saving the United States, leading to the failure of the two parties to find the correct position in time, so how can we talk about the ideal result.
In fact, calm down, where are the "white knights" and where are the "heroes to save the beauty"? Everything is taken for granted. This is just a business: buyers pay, they naturally need to invest less and get more resources; when sellers go out, they naturally have to price fair and reasonable, and strive for a higher selling price. One wants to buy and the other wants to sell. Although the roles are different, the status should be the same.
The only thing left is the game, the zero-sum game. If you don't lose, I won't be able to make money. Both parties are striving to maximize their interests. This was a difficult negotiation process, but the two parties actually reached a cooperation within a short period of time, indicating that too many issues have been forcibly ignored. The agreement reached in this way will inevitably be broken.
In the business field, how can there be any fairy tales? Yes, it's just transactions.
Conclusion
When doing business, the biggest fear is to overestimate yourself and underestimate your opponents. I am always aloof, and I am welcoming cooperation with a "marry down" mentality. How can it be possible to reach the end steadily? Without an objective judgment of the situation, without a correct assessment of oneself, imbalance is inevitable.
At present, both Shimao and Fusheng hope to end the current turmoil as soon as possible and solve the remaining problems as soon as possible. Deep down, have the two sides realized that the key to the problem lies in their unrealistic positioning and out-of-scale mentality? Keep it steady, sometimes it’s not that simple.