BEIJING, March 26, 2012 /PRNewswire-Asia/ -- In 2011, the deepening property market policies led to the continued polarization of real estate enterprises and further widening of the gap between different echelons, thereby changing the rankings of the top 10 Chinese real estate enterprises. Recently, two authoritative lists of the industry, top 500 and top 10, were released. On both lists, the first and the second places are the same - Wanke and Evergrande, which rank 1st and 2nd in terms of comprehensive strength. An original report from Sina Leju follows:
The results in the two releases represent an integrated evaluation of the comprehensive strength of Chinese real estate enterprises. The two lists were released by different institutions, but both are large research institutions with highest authority and influence in the field of Chinese real estate and the relevant outcomes of research have become an important benchmark for judging the business capacity and industrial position of real estate enterprises.
In the golden decade of the development of Chinese real estate, some enterprises grew bigger and stronger; some came to a standstill; some even vanished. With the reshuffling in the real estate getting escalated, the race toward the championship of real estate enterprises is becoming fiercer than never before. Baoli is going all out to build its own kingdom by leveraging its background as a central enterprise and its resolute military style; Zhonghai is trying to outstrip Wanke by relying on a quality that features never-ending improvement; Greentown Group which used to be in hot pursuit of Wanke years ago is now nowhere to be found in the top 10 of 2011. Evergrande, however, has risen up thanks to its distinctive cutting edges, including strong execution, growth potential, huge scale and standardized operations. For three years running since it went public in 2009, Evergrande has overfulfilled its sales target and remained No. 1 of China in terms of the area sold, enabling it to beat Baoli and Zhonghai to win the second place on the list of comprehensive strength. Jindi and Zhaoshang, big name players in the old days, have become eclipsed. The former top 4: "Baoli, Zhaoshang, Wanke, Jindi" have been replaced by the new top 4: "Wanke, Evergrande, Baoli, Zhonghai" in the real estate industry of China.
Both two research reports point out that the leading real estate enterprises have shown a development trend characterized by "strong ones getting even stronger" by leveraging their scale advantages. In future, these enterprises need to formulate a scientific development strategy and create the core competitiveness of future development through persistent product innovation and quality assurance. Those real estate enterprises that have an operation mode of high turnover, a presence in the tier-2 or -3 cities ahead of others and outstanding professional capability will secure greater initiative.
In this regard, insiders have noted that, in the future, the real estate industry will usher in an age of falling back from high profit margin; the development journey in tier-1 and -2 cities will recur in tier-3 and -4 cities; the enterprises will find themselves under the three pressures of "reduced policy dividend, reduced stocks, reduced lever". Against such a background, whether or not an enterprise can balance the relationship between "residential and commercial buildings", "speed and profits" and "capital and assets" will directly decide whether or not it can do better and operate more stably in the increasingly fierce competition with its counterparts in the future. An enterprise will come out the winner if it can start to makes its footprints in tier-2 and -3 cities early, have the capability of standardized operation for multi-project and multi-regional products, keep pace with market rhythm, seek cautious and scientific expansion and skillfully open diversified financing channels. Wanke, Evergrande and other leading enterprises all outpace other players on the property market through standardized operation and the mode of fast development and fast sales. As market concentration gets enhanced further, the development status of the jumbo pair will greatly influence the overall competition situation of the industry.
SOURCE Sina Leju