Chapter 152 July 26 Financial Synergies of Segmented Businesses

The financial cycle of each of our businesses (referring to the four businesses of housing construction, land management, property management, and customized services) is 2 to 3 years, and it is easy to avoid economic depression.From a horizontal perspective, the cash flow of these four parts of the business is diversified. Some have a large cash flow but not much profit; some have a high profit but a small cash flow.Only in this way can we complement each other and adjust each other, and finally we can arrange the company's cash flow well. Vantone Real Estate has studied the business models of all real estate companies in the world, and invited professional consulting companies to analyze and demonstrate, and finally formed the "Vantone New Strategy".The core of this strategy is to change the business model, transform Vantone Real Estate from an all-round real estate developer into a professional real estate investment company, and form a complete set of systematic management and operation systems for the enterprise.This strategy will help Vantone Real Estate to enhance its counter-cyclical capabilities and make Vantone Real Estate "the most profitable real estate company."

The essence of Vantone's strategy is to change from the Hong Kong model to the American model.After the implementation of the new strategy, Vantone will redefine the company's business scope, which includes four major aspects: The first part is residential construction, that is, to be a professional high-end residential and apartment supplier with high-end residential products as the main product.The second part is land management.After research, the domestic land system makes the best time for land reserves to be about three years, and changes from stock-type and passive land reserves to operational-style and active land reserves.The third part is property management, which mainly focuses on mainstream products in the rental market.The fourth part is customized services, which carry out real estate services by providing mass customized products.

The financial cycle of a large-scale real estate project in Beijing is about 5 to 7 years. Generally speaking, it is across the economic cycle, and the risk is very high when the economy is depressed.Vertically speaking, these four parts of Vantone's business have dismantled the business of a so-called all-round development company from land development to property management, shortening the financial cycle of each business, greatly shortening the time for capital turnover, and accelerating the realization of capital. The speed also reduces the risk of each link. Financial synergy is one of the financial goals pursued by mature large enterprises, and it is the determinant and guarantee of corporate strategy, although this strategy will ultimately take time to test.