Chapter 772: The more losses, the better

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Last year, Wancheng Foundation ushered in a greater expansion than the year before, and the number of employees directly expanded from more than 10 million at the beginning to more than 60 million.

The expansion of personnel is not only the expansion of the number of people, but also the expansion of the entire industrial system. Without the support of business, it is impossible to need so many personnel.

Therefore, the management pressure is not as simple as expanding four or five times. For Guo Dongmei, who just took over Wancheng Foundation, the pressure is much greater than the pressure of Guo Dongsheng at the beginning.

It was under such pressure that they achieved an investment scale of 10 trillion yuan. At the beginning of last year, they gave 4.6 trillion yuan. In addition to the 2 trillion yuan given by Taiji Group midway, the initial investment capital was 6.6 trillion yuan.

It stands to reason that the maximum investment scale should be 6.6 trillion yuan. The reason why it exceeds this figure is because they operate the entire industry chain, and most of the funds are operated internally.

The funds lost to the outside mainly include labor costs, material costs, land purchase costs, land use tax and various procedures.

The first major consumption is that all steel raw materials come from outsourcing, only a small part of cement comes from outsourcing, and most of them are produced in their own factories.

The second largest consumption is the cost of land purchase. With the growth of the economy, the price of land in cities with large populations has also begun to rise. The cost of purchasing land is much higher than before, but overall it is still controllable.

The reason is simple. Although there are many real estate companies in the country, only Wancheng Jiye is the real real estate company. Other real estate companies rely heavily on bank credit.

Although the government has introduced guidance on housing reform, it will take some time to take concrete measures. Banks are relatively conservative in lending to the real estate industry.

Moreover, with the rapid economic growth, the income of residents has also increased rapidly, but housing prices have risen faster. People need years of savings to buy a house with full payment.

However, salaries were generally low across the country before, and savings could not keep up with the rise in housing prices. Before bank credit was released for personal mortgages, few individuals could buy real estate with full money.

Regardless of the fact that Wancheng Jiye's real estate development is in full swing, the number of completed residential and commercial real estate is not particularly large. After all, they have only really set foot in real estate for two years.

Real estate development takes a period of time from land acquisition to completion. Since Wancheng Foundation operates the entire industrial chain, the cycle becomes more autonomous and controllable, but it will take more than a year at the fastest.

If the greening and the surrounding environment are all done well, it may take a year and a half before everyone can see a residential area with a beautiful environment.

Commercial real estate is even more complicated, like the Lujiazui Financial City they are building,

It has been under construction for two years, and it is still under construction. It is estimated that it will take about two years to put it into use.

Wancheng Foundation did it without any credit involvement with the bank. For other real estate developers, the entire construction period would take at least two years, or even more than three years.

So now a strange phenomenon has formed, the market demand for houses is huge, not necessarily to buy a house, renting a house is also very difficult, because a large number of people come to the city from the countryside.

However, there is not enough existing housing supply in the city, which makes housing more and more tense. Most of Wancheng Jiye's large staff actually live in work sheds, otherwise housing will be even more tense.

Real estate companies have naturally seen the market demand, but they simply cannot quickly enter the market. In order to be able to eat this piece of meat, many mainland real estate companies have begun to introduce a pre-sale system.

The pre-sale system was actually introduced in 1994, but it is more popular in the coastal areas of Guangdong. It has not yet become the mainstream of the real estate industry, and the impact is not great.

Now it is spreading to the mainland, and everyone is beginning to learn from others. The advantage of the pre-sale system is that it solves the financial problems of real estate companies. The disadvantage is that consumers often buy wrong products.

This is not bad. If there is a case of running away with money, the house buyer will lose everything. Now the relevant system is not so perfect, and problems will definitely emerge one after another.

Moreover, before personal loans from banks were released, there were not many people who could buy a house with full payment, so the pre-sale system was not as popular as in the previous life.

What's more, Wancheng Foundation, as the largest real estate developer, still insists on existing houses, but does not object to other real estate developers using pre-sales to develop.

The reason is very simple. I just don't want to be troublesome. The relationship behind real estate companies is very complicated. People who have nothing to do with it can't do this business at all.

Wancheng Foundation still operates across the country. There is no need to offend people for no reason. They just need to focus on their own business. As long as they don't infringe their own interests, they can do whatever they like.

As for their own existing home sales, there are two reasons. The first is that the pre-sale system has a significant effect on other real estate developers because they are small in size, but it is irrelevant to Wancheng Foundation.

As mentioned above, there are not many residents who have full funds to buy a house. Even if all these people buy the houses of Wancheng Jiye, the actual funds are not large. The funds of tens of billions or hundreds of billions are really irrelevant.

The second is to implement Leaf Book's leasing-based business strategy. The sale of existing houses is just a cover-up, because one or two years will pass after the existing houses are available.

And after one or two years, the economic development will be larger and the people's income will be higher, which will cause the price of houses to rise even more. People who could afford it before will no longer be able to afford it.

In this way, everyone can only choose to rent housing. Unless there are large-scale housing in the city, it is very difficult to buy housing through replacement, because there is not enough time to accumulate funds.

In this way, the starting line between people from rural areas and urban people will not be very large, and there will be no exploitation problems caused by relying on real estate. This is what Ye Zishu is very concerned about.

Of course, he won't say this idea to the outside world. If other people hear it, they will definitely criticize him, and they will touch the cheese of many people, and they will definitely make trouble for him.

After such an operation, many things seemed very natural, everything was market behavior, without any trace of control, and Wancheng Foundation was completely extracted.

This kind of measure is only aimed at big cities, ordinary counties and small cities are not included, because there is no problem of using real estate as a tool of exploitation, because there is no contradiction between people and land in these cities.

The third largest consumption is the labor cost. The payment of salaries alone consumed 1.5 trillion yuan of funds last year. Basically, it is difficult to get back the money once it goes out, because the money wants to be returned to their hands, or they can buy their houses. , or rent their house.

There is also land use tax, but the current land use tax per square meter is not high. Even if Wancheng Jiye acquires a lot of land, the total amount of taxes and fees is still very low compared to the total amount of investment.

Of course, the cost of various construction equipment is also very high, but these things are all produced by themselves, and a considerable part of the funds still go back to themselves.

Therefore, the money they earn from the industry chain is used to continue to support real estate development, forming several rounds of cycles, resulting in their actual investment far exceeding the original funds.

After so many rounds, Wancheng Jiye has not much available funds left, and after several rounds, most of the funds have spilled out.

With such crazy investment, the results are also very remarkable. The construction area under construction and has been built is as high as more than 7 billion square meters, of which commercial real estate accounts for about 8% of the total.

If calculated according to the housing requirement of 40 square meters per person, the current project can accommodate 168 million people, but the number of people currently entering the city far exceeds this figure.

Therefore, in the next few years, Wancheng Foundation will still need to build houses frantically. There are now 1.2 billion people in the country. Based on the minimum urbanization rate of 60%, cities need to accommodate 720 million people.

Based on the average residential area of ​​40 square meters, 28.8 billion square meters of residential area needs to be built. In fact, there is still a high vacancy rate. If the minimum 5% is calculated, more than 30 billion square meters need to be built.

In addition to the area of ​​commercial real estate, Ye Zishu believes that Wancheng Foundation will still need to follow the high-intensity construction of last year in the next five years to basically meet the requirements.

It even needs to further increase construction efforts, because the speed of urbanization may be much faster than he imagined, and this process cannot be interrupted by the housing problem.

It’s just that the costs in all aspects are increasing now. To maintain such a construction effort, more funds are needed. The fastest rising costs are material and labor costs. In fact, the increase in land costs has not been so obvious.

Last year, their balance was only 200 billion yuan, which was only enough to maintain basic operations for about a month. Last year, their net loss was as high as 6.4 trillion yuan, and their total loss was even greater, reaching 7.4 trillion yuan.

Seeing such a huge loss, if outsiders saw it, they would probably have a heart attack, but Ye Zishu and Wancheng Jiye didn't care much about it.

What they care about is whether the money can be spent reasonably. As long as the money is spent reasonably, it is a success, and the investment will always be recovered in the future. This is almost 100% certain.

After crazy expansion in the past year, their industry chain has basically matured, especially the back-end support chain, and there is no need for large-scale expansion.

If it is not enough, buy from outside, because after the expansion of production, the market may shrink in a short time, and maintaining the current level is the best choice.

If the country can't provide what it needs, then import it, earn so much foreign exchange, and spend it mainly, it is impossible to really just buy the old m's national debt, that is the most helpless choice.

To prevent overcapacity, we must consider it from now on. Even if there is a real overcapacity, it will not cause major social problems. A relatively smooth transition method needs to be considered.

In fact, the biggest crisis of overcapacity is the decrease in the number of workers, which leads to a rise in the unemployment rate. As long as the problem of overstaffing is resolved, other problems will not be serious.

As for the surplus of equipment and industries, don’t worry, just sell them directly to other countries that need them. Second-hand ones are cheaper and are still very popular in many countries.

Of course, foreign infrastructure investment can also be expanded to absorb production capacity. If personnel cannot be properly arranged in the early stage, this method can be used, at least employment can be preserved.

After slowly digesting the problem of excess employees, these businesses will be gradually eliminated, and only a small part of the production capacity for maintenance will be reserved.

In fact, Wancheng Foundation needs to consider the issue of staffing, not because of the surplus of the entire industry, but to do staffing now, so as to keep its employees in the city for a long time.

In other words, it is necessary to find opportunities for its employees to survive in the city for a long time, instead of always moving to various cities to work as it is now.

When the work is done, if these people have no other means and means of making a living in the city, they can only return to their hometowns to farm the land, and the countryside does not need so many people who have a variety of land.

Due to the faster urbanization, when they return to their hometowns, they are still young and strong, and it is impossible to return to their hometowns for the elderly. In short, they will be in an embarrassing situation.

He needs to bring this issue up for special discussion at the annual meeting. He must make plans in advance, guide the transformation of employees in an orderly manner, and seek opportunities for sustainable development for employees.

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