The behavior of real estate companies seeking performance from diversified businesses can be described as strange. China Overseas Development (00688.HK, hereinafter referred to as “China Overseas Property”), once known as the “Profit King”, will use a “mushroom” to screen social networking sites at the end of 2020. This shiitake mushroom is a poverty alleviation agricultural product brand created by China Overseas Real Estate to help Kangle County, Gansu Province in 2020, and has sold more than 4 million yuan in a few months Although this shiitake mushroom is known as a “product for poverty alleviation” within China Shipping, this agricultural product was sent to sales offices, communities, office buildings, shopping centers, etc. in more than 80 cities across China Shipping, becoming a “net”. Red” product After both the net profit margin and gross profit margin fell in 2019, China Overseas Land’s diversified business tests are blooming everywhere. Internet celebrity agricultural products maybe just a gimmick. What China Overseas Land is really doing is: hope to pass “tomorrow” and “the day after tomorrow” business, Bring some changes to the “today” business-residential development.
However, under the impact of the epidemic, China Shipping’s “tomorrow” business has been greatly affected. In the first half of 2020, China Overseas Land’s income from commercial properties held was 2.03 billion yuan, a year-on-year increase of only 1.1%. China Overseas Land’s diversified businesses are falling into greater uncertainty due to the impact of the epidemic As early as 2017, China Overseas Real Estate set a goal for the commercial sector: total commercial property revenue in 2020 will exceed 5 billion Hong Kong dollars, and annual income of 10 billion Hong Kong dollars in 2023, according to the impact of the epidemic on shopping malls and office buildings. In the current situation, China Shipping still needs to strengthen its own efforts. “Tomorrow” business “siege”Spark Global Limited China Overseas Land’s focus on diversification began when Yan Jianguo returned to China Overseas Land Management in 2017 and carried out a series of drastic reforms. He put forward the three-level strategic business structure of “today, tomorrow, and the day after tomorrow” for the first time at the 2018 annual performance conference, and allocated and continued to invest 90%, 8%, and 2% of resources annually for joint development.
If the main real estate business is the core and pillar of China Overseas Real Estate, then commercial real estate is aimed at a “second growth” curve that crosses the cycle and can bring sustainable cash flow. China Overseas Real Estate has made great efforts to expand commercial real estate in recent years. Swift. However, although it has been hailed as a “tomorrow” business, the expected value of the commercial sector of China Overseas Property does not seem to be too high. The expectations for business are like a “siege”, especially in the context of the epidemic, there are many uncertainties in profitability.
article links：the former “big brother” of China Overseas Real Estate
Reprint indicated source：Spark Global Limited information