Lanshi Tian Ming： ＂Living long＂ is more important than ＂developing fast＂

Although the sales data of Langshi Green Group (00106.hk), a "model student of light assets" in the real estate industry, declined year-on-year, Tian Ming, the chairman of the board of directors, still took the attitude of "not taking pleasure in things but not taking sorrow for himself". In his words: "Langshi is now in a state of winter defense, and stability, less risk and no pressure are the key."

Tian Ming, Chairman of Langshi Group

Blank houses also have green thinking.

Langshi is positioned as a green development service provider and a green life operator, including green real estate development, long-term rental apartments, aged care services, green finance, property services and other fields; The business scope covers more than 30 major cities in China, including Beijing, Shanghai, Shenzhen and Tianjin, as well as major first-line gateway areas in the United States.

"Green is an important part of our product differentiation competition." Tian Ming said that unlike other real estate companies that emphasize energy conservation and environmental protection, Langshi generally does not talk about green environmental protection and low-carbon energy conservation when facing customers, but emphasizes the special comfort and health of the house, which is particularly convenient to use and saves money, and emphasizes the customer value and the ultimate experience.

Langshi has indeed done this. Take Shanghai Langshi Green Center as an example, this project is a stock transformation project, which adopts 108 building technologies in 14 technical systems and realizes five core values: healthy environment, comfortable office, energy conservation and environmental protection, intelligent management and human design.

Shanghai langshi green center

"Many houses in China are shoddy now, but Langshi is not like this. We have invested more cost to make the building performance better. Langshi is the only company among all developers in the country that puts forward air tightness control standards. No real estate developer in China is doing it, but we have such internal standards. " He said proudly.

Facts have proved that for a really good house, buyers pay the bill. "The premium we sell in the market is higher than the cost we invest." Tian Ming said, at present, most of the projects under Langshi have adopted green standards. Even if there is a product line for ordinary blank houses, it is still required to do well. "Because we have green thinking and green soft power, we will also give this building and this community green things in terms of planning, design and other standards. As for other strategic projects, they all focus on the banner of health, comfort, energy saving and environmental protection. "

"We don’t pay much attention to land reserve"

Langshi has always adhered to the idea that "living long" is more important than "developing fast". In 2018 and the first half of 2019, there were not many projects that Langshi acquired land through the open market and mergers and acquisitions, and there was no plan to complete investment expansion. "I think it’s not finished!" Tian Ming said.

"We don’t pay much attention to land reserve." Tian Ming said that at present, the price of land in the market is very high, so it is certain that something will go wrong if such high land is brought back. Those enterprises whose performance has grown particularly fast in recent years, who take everything and borrow any money, and whose cities are key areas for regulation and control, are worried about the future. "I think its debt repayment pressure will increase."

Langshixin western suburb

Tian Ming believes that after the third and fourth quarters of this year, there will be more opportunities in the land market. Langshi has already started to actively register for land auction in all parts of the country, including Ningbo, Hangzhou, Nanjing and Chengdu. "However, even if we sign up, we don’t chase high. At this time, it is not necessary to chase high. If there is a very cheap land, it is not called leak detection, but to see if there is investment value. Our aim is: take the land within a certain range, spread the net widely, take what is cheap, and put what is not cheap. "

Tian Ming explained that at present, the real estate market is in an uncertain stage, and it may be "cold" for a long time. If you take too much land, it will definitely put pressure on cash flow. Therefore, it is the right way to save more money for the winter and spend this possibly long winter.

"What we are considering is that there should be no pressure on the funds for winter, and cash flow is the key link. At the same time, if there is a project that we think has a safety margin, then our first consideration is not profitability, but how big its safety margin is. What we usually consider is how high the profit rate is. Now we are considering whether we can hold on if the market is much lower. So we are thinking about the margin of safety, which is the thinking of Langshi’s winter defensive operations. "

In his view, when the house is not easy to sell, it should be sold desperately, and the price cannot be sold. When the land is very expensive, it is not rational to desperately take the land for the sake of land reserve, development volume, contract sales. "I can make a concession. What I value more is long-term development and I can live longer. Look at your growth in the long run, rather than just staring at a certain year. We have always had this attitude, so we are still quite stable financially. "

He stressed that this round of real estate adjustment may exceed expectations in both length and depth. He predicted that a group of previously radical development enterprises might encounter problems. Therefore, in the land market, there will be more mergers and acquisitions of projects and even mergers and acquisitions of companies.

Long-term rental apartments have a target loss period.

Not long ago, Langshi announced that it would divest the long-term rental apartment of Langshi from the listed company to the holding group, which was interpreted by the market as Langshi was not optimistic about long-term rental apartments. In this regard, Tian Ming said that the long-term rental apartment will be stripped from a listed company with only 51% equity to a 100% holding group, which is obviously optimistic about the long-term rental business.

He said that Langshi is very optimistic about long-term rental apartments. "We feel that housing is not speculation, and it is right to rent and sell in this direction. However, as far as the whole market is concerned, long-term rental apartments are still at a loss. "

Langshi long-term rental apartment langshiyu

He further explained that, first of all, the current loss of long-term rental apartments does not mean future losses. An enterprise can never say that it will make money today when doing business. Many enterprises have a target loss period when doing business, which is planned. Only when the scale is large enough, the market is gradually mature and the operational efficiency is improved can they gradually make money. Secondly, many long-term rental apartments now adopt the second landlord model, and the profit measurement model of the second landlord model is to lose first and then earn. Therefore, Langshi strategically entered this industry, optimistic about this industry, and believed that there would be opportunities in the future.

"However, according to my common sense or business logic to predict, I don’t know how long the long-term rental apartment industry will lose money, it should be several years. This is a loose calculation method. For example, a house rented for 12 years after signing a contract will be renovated and operated, and it will gradually climb the slope, and it will probably start to make money in the fifth or sixth year. In fact, for enterprises that rent apartments for a long time, its valuation model cannot be calculated according to ordinary PE, and it should have its own valuation method.

He concluded that in the long run, the increase in rent is a general trend and definitely higher than the inflation rate. Therefore, the future of the long-term rental market will definitely improve. This is an innovative business.

"Banyan Forest Plan" with the same gas and branches

Tian Ming, who "ran away" from the system, has his own unique judgment on the market, which is also the basis of Langshi’s strategic positioning. In 2004, Langshi decided to deepen the field of green real estate, which has not changed so far. For more than ten years, the competition in green real estate plate market has been increasing, and many housing enterprises such as Jinmao and Sunshine City have made "green" signs. As a result, in 2014, Langshi put forward the strategy of light assets, gradually shifting the development business from heavy to light, and at the same time starting the pace of innovative business.

In 2016, Langshi implemented the "Banyan Tree Forest Plan", actively cultivated long-term rental apartments, aged care services, green financial services and other businesses related to or complementary to the main real estate business around the core real estate business, and implemented the transformation and upgrading strategy.

Tian Ming explained: "Langshi was originally engaged in real estate, and later in green real estate, so we described it as a trunk of banyan trees. There are air roots hanging on the trunk of the banyan tree. Once the air roots touch the ground and are grounded, they will grow into a tree. Therefore, we are a vertically integrated green strategy. We describe it as a banyan forest. In this plan, new businesses will gradually become independent, take root in their respective specialized market segments, and can cooperate with each other. Like banyan trees, the trunk and air roots form a vertically diversified business ecosystem.

Three years have passed, and when asked about the plan of Banyan Tree Forest, Tian Ming said: "I think that the real estate business has been transformed and upgraded from all indicators to the present, and the chess game has reached the middle. We are not only different in differentiated products, but also different in business model, development model and income composition. "

Tian Ming likes mountain climbing, which originated five years ago. It is a challenge and a farewell to the unhealthy life in the past. The conference room of Langshi Green Center is named after the snow mountain he climbed. Perhaps this is a reminder, because Tian Ming said: "When climbing a mountain, you can’t give up. It’s harder to go down than to go up. You have no choice but to follow the team."