Core ideas:

The development of the real estate industry is closely linked with policy changes, and real estate enterprises need to constantly revise their strategies to seize the opportunities of the times to achieve the goal of rapid development, but if there is a strategic positioning mistake, make up for it as soon as possible, and quickly correct the deviation. Greentown China is undoubtedly such an enterprise. The period from 2015 to 2017 is a concentrated period for the scale growth of housing enterprises, while Greentown pays more attention to agent construction business, resulting in a slowdown in performance growth. After that, when facing the pressure of cash flow, it was introduced into China Communications Group. The strategic focus of the enterprise has shifted to scale expansion, and the company has achieved rapid performance growth in 2020. In this paper, we will analyze the logic of Greentown China's performance growth rebound from the investment level.

First, attach importance to agent construction over scale, and the sales growth rate of real estate business has slowed down.

We believe that there are three reasons for the slowdown in the company's sales growth from 2015 to 2018: first, Greentown China's high standards and strict requirements for product quality lead to a long project cycle and take up a lot of funds; second, the company's layout of third-and fourth-tier cities before 2015 leads to the weakening of high-end products, resulting in slow sales and land acquisition. Third, Greentown attaches too much importance to the growth of agent construction business and despises the main business of real estate development, of which sales reached 43 billion yuan in 2017, an increase of 138% over the same period last year.

Second, strengthen the strategy and "attach importance" to the heart, and the sales volume will increase rapidly.

In order to achieve the rapid expansion of scale, Greentown China has made a strategic transfer in time, mainly doing four things: first, the investment layout has shifted to core cities, and the proportion of land reserves in third-and fourth-tier cities has decreased by 10 percentage points in three years; second, we will increase the intensity of recruitment, auction, acquisition, acquisition and acquisition of land, and expand the high-quality land reserve on a large scale, with an additional land reserve of 1236 million square meters in 2019. Third, optimize the company structure around high turnover and cost reduction; fourth, split the construction business listing and broaden the financing channels.

Third, under the restriction of three red lines, the financing advantage is significant.

The core of the national policy of "living without speculation" will not change, and at the same time, the central bank has issued three red lines to limit the growth of interest-bearing liabilities of real estate enterprises. In the face of the increasingly tight domestic regulatory environment, financing capacity is the biggest variable that affects the future development of enterprises. For Greentown China, relying on the central enterprise, financing is the biggest advantage of enterprise expansion in the future.

IV. Summary

For Greentown China, the biggest mistake is that when the scale has not yet maintained a stable development, the layout has sunk to the third and fourth lines and attached too much importance to agent construction, resulting in problems in the enterprise capital chain. Fortunately, the follow-up strategy has been adjusted in time. With the support of China Communications Group, the development of the enterprise has been on the right track, and the performance growth rate will be gradually released. The "heavy" Greentown will bring us more surprises. But at the same time, a series of rights cases also remind Greentown not to ignore product quality in the pursuit of scale, after all, this is the foundation of Greentown China.