Coquettish Rebirth

Sun Hongbing is not a reckless entrepreneur.He was born in the prestigious Jinghua University and has a master's degree.In 1999, he also went to the best business school in the world——Harvard Business School in the United States to study the AP President Seminar for half a year, and had the same training with world-renowned entrepreneurs such as Intel's legendary CEO Andrew Grove experience.Therefore, one cannot simply regard his national strategy as an ill-planned, frivolous venture.The fact is that under the cover of high-profile public opinion, he has carried out careful thinking and planning in many aspects.First of all, he is very skilled on the ground.Most of the land acquired by Sunco is in the fringe area of ​​the city or the new center under planning. In the capital, it is Nancheng Daxing Huangcun, in Zhengzhou, it is Dongxin District, and the two lands in Shanghai are 1 hour’s drive away from the urban area. In the suburbs of Nanjin, Hexi New City, the two lands in Suzhou are in the new industrial park, and in Youxi, Binhu New City.

These lands have the following characteristics: Because they are "raw land", they are not favored by local developers who focus on short-term benefits, and there is relatively little competition?none?wrong? .s. is too intense, and has the potential for future appreciation; the local government is eager to sell, so it is easy to get support; basically there is no legacy problem of demolition, which is conducive to rapid start and delivery; the land area is generally large, suitable for large-scale construction middle and low-end residential real estate.Secondly, there is a strong reality in project positioning and design.Sunco insists on only doing residential projects, and focuses on mid-range prices.Sun Hongbing believes that this type of real estate has the largest consumer group and the highest liquidity, and is suitable for quick sales in the short term.Compared with developers in many places, Sunco's national brand, relatively mature advertising and marketing methods and design concepts have certain competitive advantages.In addition to the above two points.Sun Hongbing's most important strategic basis is the strict control of cash flow.Some people have calculated that Sunco needs a total of 1 billion yuan to acquire land in one year, and it is impossible for Sunco to pay such a large amount of money with its current capital strength.Therefore, for Sunco, which is moving forward strongly, the only feasible strategy is to maximize the efficiency of the use of limited funds!The first way to improve capital efficiency is to greatly shorten the construction and delivery time!Sunco has been creating "national records" in terms of construction speed. In September 80, Sunco won an auction of a 2002-square-meter plot in Tanggu, Tianjing. It only took two months from construction on site to opening for sale, which surprised its peers. At the end of 9.After winning the bid for the land in Huangcun, Daxing, the capital.It announced on the same day that it would open within 40 months, and the peers thought it was absolutely impossible.Because according to industry conventions, from planning and design to opening sales, it generally takes at least one year of development cycle.But Sunco actually broke the rules.It really opened as promised in 2 months.thereafter.Its projects in various places all take 2003 months as the latest opening deadline.The shortening of planning and construction time, of course, has greatly increased the profitability of Sunco, especially in the so-called third-tier cities.For example, in Jingzhou, Yuchi and other cities, Sunco invested tens of millions of yuan to buy land, and the money was collected within 6-1 months, and the cost can be recovered in about half a year and huge profits can be obtained.

The second trick is to speed up the flow and use of cash.Sun Hongbing believes that cash flow reflects the actual combat ability of a developer, and Sunco's business model lies in "shortening the cycle from cash to cash".After implementing the national expansion strategy, Sunco's budget adjustment was shortened from semi-annual to monthly and then weekly.It has also formed a tense cash flow model based on days. The company has established a strict assessment index system, paying attention to the start time of each project, payment collection, and cash dispatch. All of these are based on days. There is no excuse for delay at any one time node.Sunco's business center is also developed around cash flow, including the unified allocation of funds throughout the company, delaying the payment of land purchases, starting construction within 3 to 6 months, collecting owners' purchase payments in advance, and using funds from partners, etc. This whole set of measures is to ensure the continuous flow of cash. …In addition to internal control, Sun also put forward the idea that “payment method is more important than land price”.When he decides to choose a piece of land, he first considers the price of the land, and the other depends on the quality of the payment method.He often asks the government to reduce the proportion of the down payment and extend the settlement period. If there is room for flexibility in this regard, he would rather increase the purchase price of the land.Out of his long-term optimism for China's real estate industry, Sun Hongbin tried to trade immediate benefits for time, relying on the continuous rise in land prices to make up for the high cost of land purchases.His strategy has been warmly welcomed by many local governments, so Sunco is not afraid to enter any strange city.All his strategic designs actually revolve around the word "speed". When all aspects are not fully mature, he must win a decisive victory in the shortest possible time and use speed to defeat all competitors.

In the actual operation, his strategy seems to have really achieved a great efficiency, and Sunco has operated some huge projects quickly with less capital.Taking a project in the territorial waters of the capital as an example, the land payment is 9.05 million yuan, 30% will be paid before the opening, another 30% will be paid at the end of the year, and the rest will be paid in the next year.The total investment for the operation of this project is about 20 billion yuan.Sunco started with 3 million yuan, and all the funds during the first six months of planning and construction were paid in advance by the contractor. On the opening day, there was 6 million yuan in sales, and subsequent project and land payments were all paid back through sales.From the opening to the end of the year, the company has withdrawn a total of more than 1 million yuan of funds, which is not only enough for this project, but also can be used to buy new land, and its capital leverage ratio is as high as 6:1.According to public information disclosure, 7% of Sunco's total cash flow in 2004 was obtained through sales, and only 78% and 10% came from banks and cooperative units.At that time, almost every real estate company was using the capital operation strategy of banks and cooperative units, and Sun Hongbing's superman was that he used the tight and extreme speed strategy to maximize it.

Wang Shi once made an account for Sun Hongbing: Sunco used the bidding strategy of high land price to conquer cities and land. By the end of 2003, Sunco had paid more than 70 billion yuan in advance for land prices, entering the first quarter of 2004.The scale of prepaid funds has exceeded 100 billion yuan.From the perspective of capital flow, unless there is a strong consortium or bank backing, it is impossible to deliver the land price on time.What is the capital flow supported by?Sunco's answer is simple and simple: rely on the return of sales funds.The problem is that the funds returned from the sales of Tianjing's real estate projects are not enough to support the rapidly increasing land payments that need to be handed over.What does Sunco rely on to maintain a tight capital chain?This has to make people make an assumption: Sunco is taking risks, gambling, and betting on the credibility of local governments at all levels when they implement the land auction policy.

Therefore, Wang Shi asserted: "Sunco's exaggerated acquisition of land will affect the whole industry. This kind of malicious competition and game with the government is a huge damage to the rules of the market." !If only in terms of strategy itself, Sun Hongbing is undoubtedly a genius.He saw through the skyrocketing characteristics of the real estate industry at a glance, and then achieved the greatest success with the fastest speed and the most scientific and compact strategy. In 2004, Sunco claimed to have achieved sales of 120 billion yuan—actually 92 billion yuan.Li Silian, chairman of R&F Group, said in a forum: "If Sun Hongbing can really achieve sales of 100 billion yuan this year, it will be the sum of the sales of Vanke and our company. It can indeed be regarded as the number one among real estate companies." Sun Hongbin said in the future.If God gives Sunco another year, it will be enough to digest all the financial risks and realize the "complete victory" of the national strategy.

It's a pity that "God" will not give this year.Just when Sunco was crazily "eating" places everywhere.The real estate market across the country has shown signs of overheating.An annual report by the Chinese Academy of Social Sciences said.From a macro perspective. In 2004, due to the national real estate market, especially the real estate market in major eastern coastal cities, the real estate market continued to heat up, and housing prices continued to rise.As a result, a large number of ordinary residents cannot afford housing, directly affecting the improvement of housing conditions of urban households, and at the same time affecting financial security and social stability.In fact, this is still from a national point of view, but if you look at it in developed cities, by 03, there was already a bit of public dissatisfaction in Shanghai with high housing prices!

The overheating of real estate directly drives up the prices of means of production, and the macro economy is facing new overall overheating.Undoubtedly, Sunco, known as the "sky-high price maker", is one of the important boosters for the rapid rise of house prices.It is under this judgment that the regulation of real estate is imperative. From March to May 2004, the state launched a series of strict control measures, including: controlling currency issuance and loan scale; strict land management, resolutely stopping random occupation of cultivated land; seriously cleaning up and rectifying ongoing and new projects ; Carry out resource conservation activities nationwide.A series of central documents and measures such as "gold medals" came out one after another - on March 3, the refinancing floating rate system was launched; on April 5, the central bank raised the bank deposit reserve ratio by 3 percentage points; on April 25, the central bank Telephone notification to suspend sudden lending; on April 4, an emergency notice of "strict land management" was issued; on April 25, a heavyweight official delivered a speech that "promoting bank reform is the top priority of the entire financial reform"; on May 0.5, the China Banking Regulatory Commission Announced 4 measures to "further strengthen loan risk management".At the same time, major domestic newspapers and periodicals have published their opinions one after another, reflecting on the overheating of the real estate industry and even expressing violent condemnation...

This series of "urgent and law-like" policies and public opinion creation have not only changed investors' income expectations and consumers' home purchase price expectations, but also changed the government's support concepts and methods for the development of the real estate industry, which directly led to The rapid decline in purchasing power and the rapid shrinkage of the property market turnover.Winter in the real estate industry has come suddenly.Among all the developers who have been impacted, Sunco, which is striding forward on the road of expansion, is undoubtedly the one that has suffered the most.Unfortunately, Wang Shi's prediction of Sunco came true.Since May, Sunco's banks in the capital, Suzhou and other places have been reluctant to lend, and the speed of lending has slowed down rapidly. On May 5, Sunco held a leadership team meeting and urgently ordered to stop land acquisition.

Unfortunately, this Sun Hongbing is not a reborn.His mode of tightening the capital chain and operating through high leverage is smooth sailing, but if there is a slight fluctuation, the capital chain will easily break, and then everything will be wiped out.If he was a reborn, he might know that the public dissatisfaction is boiling at such a time, and maybe he would make some preparations—after all, for the reborn, it is certain that housing prices will continue to soar in the future!What are you afraid of a little bit in front of you?There are still seven or eight years to go up!Unfortunately, he is not a reborn, he does not know.

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