Chapter 59 God bless Hongbin

If only in terms of strategy itself, Sun Hongbin 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 12 billion yuan—actually 9.2 billion yuan.Li Silian, chairman of Guangdong R & F Group, said in a forum: "If Sun Hongbin can really achieve sales of 10 billion yuan this year, it will be the sum of the sales of Vanke and our company, and it can indeed be regarded as the first in the real estate industry. "Sun Hongbin said in the future that 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. "God" is not illusory, it is China's macro economy. While Sunco is frantically "eating" land in various places, the national real estate market has shown an overheating phenomenon.According to an annual report of the Chinese Academy of Social Sciences, from a macro perspective, in 2004, due to the continuous heating up of the national real estate market, especially the real estate market in major eastern coastal cities, housing prices continued to rise, causing a large number of ordinary residents to be unable to afford housing, which directly affected the The improvement of the housing conditions of urban households has also affected financial security and social stability. Public dissatisfaction has gradually become boiling, and housing prices that have risen too fast have become a common criticism.Moreover, the overheating of real estate directly drives up the prices of means of production, and the macro economy is facing a 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 the real estate industry 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 came out like "gold medals" one after another: on March 25, the refinancing floating rate system was launched; on April 25, the central bank raised the bank deposit reserve ratio by 0.5 percentage points; Notice to suspend sudden lending; on April 29, the General Office of the State Council issued an urgent notice of "strict land management"; Announced 7 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 has become a reality.Beginning in May, banks in Beijing, Suzhou and other places began to refrain from lending to Sunco, and the speed of lending slowed down significantly. On May 3, Sunco held a leadership team meeting and urgently ordered to stop land acquisition.

On August 7, the annual National Real Estate Forum was held in Boao, Hainan as scheduled. In the atmosphere of "the rain is about to come and the building is full of wind", the third confrontation between Sun Hongbin and Wang Shi took place.However, this time, it seems that Wang Shi ganged up on Sun Hongbin. The first guest speaker on the first day of the conference was Wang Shi.When talking about the impact of macro-control, he directly pointed at Sunco: "The dark horse hyped by the media will be very uncomfortable under the macro-control. Ask him, if he says it’s not uncomfortable, that’s bragging.” Then, he gave a lot of warnings: don’t go after too much scale, don’t tighten the capital chain, and don’t leave room for it, otherwise the market will be affected if there is any disturbance, and you will work overtime every day It’s useless; last year’s sales were only more than 2 billion yuan, and this year it reached 10 billion yuan, which is impossible; financing is getting more and more difficult, domestic money can’t be raised, and foreign financing is even more difficult.In an interview with reporters, Wang Shi simply named and commented: "If the pace is right, Sunco can become a very good company, but now it has to pay the price for the miracle created by blind expansion. Sunco and Vanke are not in the same breath at all. This kind of dark horse is actually a black sheep that destroys the competition rules of the industry."

When it came to the dialogue session of the conference, the organizer intentionally invited 5 people including Wang Shi, Sun Hongbin, and Liu Xiaoguang to the stage. Facing more than 600 real estate developers and dozens of media from all over the country, an expected collision happened. .The dialogue host Liu Xiaoguang asked Sun Hongbin: "Mr. Sun, tell me first, what is the most uncomfortable thing for you in macro-control?" Sun Hongbin replied: "In fact, the most uncomfortable thing is money. There is no good way to deal with this. It is still the old way. Cooperation Develop and sell the house quickly. This year, we have been adjusting our goals...According to the last round of conservative estimates, this year’s sales revenue can reach 10 billion yuan.” Wang Shi on the side immediately blurted out: “Open Talking nonsense with closed eyes is bragging!" The audience was stunned for a moment, and then applause and laughter burst out.

Faced with Wang Shi's questioning, Sun Hongbin was no longer as frivolous as he was a year ago.However, he still insisted that "the risk of Sunco is almost zero."According to his judgment, the development prospect of China's real estate market will still be "bullish housing prices, booming supply and demand". Therefore, even if there are financial difficulties, they are short-term and immediate. Sunco's "funding channels are quite extensive".In the following period of time, Sun Hongbin devoted all his energy to finding funds. Sunco may obtain funds from four sources: first, its own funds and partner funds, which have already been tapped to the extreme; It is getting more and more difficult day by day, the original assessment indicators are almost impossible to be fulfilled, and the funding problem is becoming more and more serious; the third is the bank, its door is getting tighter and tighter, and it will not be loosened indefinitely; the fourth is trust, overseas funds and listing, the top three. It is the only place where hope can be pinned when there is no hope from any of these sources.

The reason why Sun Hongbin still has confidence in the Boao Forum is that on July 28 before he went to the meeting, he had just received a team from HSBC, PricewaterhouseCoopers, Smith Law Firm, and Simmons Law Firm. Shunco listed intermediary group composed of well-known intermediaries.These people inspected Sunco's headquarters and real estate development, and called on relevant government departments in Tianjin. They seemed to have full confidence in Sunco's listing on the Hong Kong Stock Exchange.However, after they went back, there was no more news.It is said that the reason for the stranded listing was that "Sunco developed rapidly in 2004 and had 35 projects in hand, but the profits of that year could not be reflected".

After listing in Hong Kong was hopeless, Sun Hongbin immediately negotiated private placement with American investment bank Morgan.Morgan proposed an agreement with the nature of "gambling". The general content is: Morgan purchased 20% of the shares of Sunco for 750 million yuan. The 20% stake will be doubled to 40%.The negotiation with the investment bank lasted for nearly a year, and Sun Hongbin almost pinned all his hopes on this negotiation.However, by October 2005, Sun Hongbin finally believed that the conditions proposed by Morgan were too harsh, and the negotiations aborted.

When the listing and private placement were not smooth, in fact, Sun Hongbin had very little room for maneuvering.During this period, the sales of real estate projects in various places still did not improve, and various crises induced by the cut-off of funds began to erupt everywhere.In Beijing, Sunco’s post-territorial project has not obtained the land certificate because it has not paid the land transfer fee; in Tianjin, the second phase of Sun City has not obtained the land certificate because it is out of the planning red line, and other parts of the project have been suspended for half a year; in Suzhou In Phoenix City, which covers an area of ​​more than 1 square kilometer, two of the land were taken back by the government as idle land; in Shijiazhuang, two projects were transferred out as a whole; Sunco's Nanjing Company and East China Company were successively sold. At the end of 2005, Sunco carried out a large-scale personnel adjustment and laid off 20% of its staff. At the beginning of 2006, Sun Hongbin admitted that Sunco currently has real estate business in 16 cities across the country, and it has entered too many cities, so it would be more appropriate to shrink it to 10 cities. Next, some of Sunco's real estate projects may cooperate with outside companies, Some items may be sold.According to media reports, the total amount of Sunco's arrears of land fees plus bank loan balance is estimated to be as high as 4.6 billion yuan.

Before and after these incidents, Sunco's rapid house building model also exposed its sequelae.The real estate industry has always had the principle of "a long-term plan, rushing to work is a disaster". Sunco rushes to catch up with the project, which will inevitably leave flaws in quality and credit.According to "China Sankei Shimbun", since the end of 2004, the owners of Tianjin Suncity have frequently complained to various departments, claiming that the Suncity houses they bought for hundreds of thousands of yuan or even nearly one million yuan turned out to be "low-quality housing." , the builder Shunco Company unilaterally changed the plan, infringing on the rights and interests of the majority of owners.Some owners complained: "Sun City is simply 'paper', with a lot of cracks in the walls, and the decoration materials were secretly replaced by the 'Road Guerrilla Decoration Team'! The house was bought for the Sunco brand at the beginning. Thinking that Sunco is even more deceitful, the entire decoration is almost fake." In addition, Zheng Aimin, a financial author in Tianjin, also mentioned a case in the book "Interpretation of Sunco": Sunco was in a city near a large scenic spot. When the project was launched, there were still some unfinished matters in the approval procedures of the project, but because the hard indicators were already like arrows hanging high, it couldn't wait, so the press conference was held in a hurry, and the advertisements were overwhelmingly bombarded.In order to increase the attractiveness of the project, the advertising copywriters arbitrarily included the government's future planning for the scenic spot in the real estate plan.This of course aroused dissatisfaction from the government departments. As a result, newspaper advertisements were ordered to be revised, and all billboard advertisements were required to be removed and redone. When the crisis of a large enterprise breaks out, it first manifests as mistakes in details, and then internal and external troubles and frequent troubles.Since the autumn of 2004, the unlucky Sun Hongbin has fallen into such a quagmire.