"Chinese Real Estate Industry"
8 SPECIALSUPPLEMENT FRIDAY MARCH 31, 2006 CHINA DAILY Ranking of top 100 real estate firms announced By China Real Estate Top 10 Research Team studied in 2004 and 2005, an en- terprise’s financial liquidity and PROPORTION OF TOP 10 REAL ESTATE FIRMS’ COMBINED SALES REVENUE IN THE NATION’S TOTAL Top 10 Chinese real estate firms in social responsibility are also con- comprehensive strength sidered in this year’s report. A research report of the top 100 Chi- The results have become one of the 4.65% 4.87% 5.2% Top 10 firms Top 10 firms Top 10 firms nese real estate firms was recently re- important standards for judging the Ranking Name of enterprise leased in Beijing, providing industry operational strength of Chinese real insiders and investors with a general estate enterprises. 1 China Vanke Co Ltd outlook of the industry. About 50 international fi nancial The China Real Estate Top 10 Re- institutions, including Merrill 1 China Overseas Land & Investment Ltd search Team conducted the research, Lynch, regard this report as an im- 2003 2004 2005 a joint programme established by portant frame of reference to help 3 Hopson Development Holdings Ltd the Enterprise Research Institute them choose investment partners of Development Research Centre in China. SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM GRAPHICS BY WANG YAN 4 Beijing Capital Development Holdings Co Ltd of the State Council of China, the Institute of Real Estate Studies of the General outlook counting for 14.26 per cent of the in 2005, according to the research A downward trend like this can be 5 Poly Real Estate (Group) Co Ltd Tsinghua University and the China Among the top 100 real estate nation’s total. report. mainly attributed to the decrease of Index Academy. firms, 29 are located in East China, The top enterprises in North Half of the enterprises each paid the asset liability ratio, meaning that 6 Guangdong Henda Group The study has been conducted for 29 in North China and 26 in South China, East China and South China more than 100 million yuan (US$12.43 the net profit growth lags behind the three consecutive years, from 2004. China. take up 5.78 per cent, 4.51 per cent million) in taxes. In addition, there are even faster pace of net assets increase, 7 Dahua (Group) Co Ltd The report will have a strong Compared with the previous year, and 3.97 per cent of the country’s two companies with a tax payment of according to the research report. In impact on domestic financial insti- the number of top 100 real estate market share respectively. more than 1 billion yuan (US$124.3 other words, the reduced liability and 8 GreenTown Real Estate Group Co Ltd tutions and local governments when firms dropped by 10 in East China, Along with their growing scale, the million) each. Taxes paid by China increased assets indicates the top 10 they decide to lend loans or sell land indicating an adjustment of the over- market share of the top 100 firms as Vanke Co Ltd even reached 1.4 bil- fi rms have become less dependent 9 China Merchants Property Development Co Ltd to these companies. heating housing market in the region. a whole is on the rise. lion yuan (US$174 million). on bank loans, and thus have more The 2006 China Top 100 Real However, two more firms were added The total assets scale of the top channels for fund raising and are 9 Forte (Group) Co Ltd Estate Firms Research started in in North China, and eight more in 100 real estate firms has increased, Top 10 ratings more capable in risk control. October 2005. South China. with the emergence of a number of According to their indices in With respect to growth potential, In addition to enterprise scale, development potential, profitabil- Combined sales revenues of real estate fi rms among the top 100 in flagship enterprises. Among the top 100, seven com- scale, growth potential and profit- ability, the China Real Estate Top Shanghai Industrial Real Estate ranked first on the top 10 list, with Top 10 Chinese real estate firms in scale ity and comprehensive strength, the three regions reached 188.34 panies boast assets of more than 20 10 Research Team rated the specific 10 million square metres of reserved wh ich a re t he m ajor fe at u re s billion yuan (US$23.4 billion), ac- billion yuan (US$2.48 billion). The top 10s for the top 100 Chinese real land and 10 million square metres of Ranking Name of enterprise combined assets of these seven firms estate companies. floor space under planning. LOCATION OF TOP 100 REAL ESTATE FIRMS total 203.42 billion yuan (US$25.27 China Vanke Co Ltd and China Beijing Sunshine100 Real Estate 1 Beijing Capital Development Holdings Co Ltd billion), which accounts for 33.45 Overseas Land & Investment Ltd Co Ltd, Coastal Greenland Ltd, 40 per cent of the total assets of the stood side by side in the first place Shandong Luneng Estate and 2 China Vanke Co Ltd Top 100 firms in 2004 top 100. of the comprehensive strength rating, Jiangsu Xincheng Real Estate are 35 Top 100 firms in 2005 Through mergers and acquisition, followed by Hopson Development also on the list. 3 Shanghai Industrial Real Estate 30 the Beijing Capital Development Holding Ltd, Beijing Capital Devel- Last year, the revenues of these Top 100 firms in 2006 Holdings Co Ltd has become the opment Holdings Co Ltd, Poly Real companies from their staple busi- 3 China Overseas Land & Investment Ltd 25 largest-scale enterprise, with assets Estate (Group) Co Ltd, Guangzhou nesses rose 49.58 per cent on average totalling more than 50 billion yuan Henda Group, Dahua (Group) Co from the previous year, 31 percentage 5 Shandong Luneng Estate Group Co Ltd 20 (US$6.21 billion). Ltd, GreenTown Real Estate Group points higher than the average rate of Combined sales revenues of the Co Ltd and China Merchants Prop- the other 90 companies. 6 Beijing Urban Construction Investment & Development Co Ltd 15 top 10 fi rms, in terms of compre- erty Development Co Ltd and Forte In addition, their net prof its hensive strength, reached 68.66 (Group) Co Ltd. increased 56.01 per cent annually 7 Shanghai City Land Group Co Ltd 10 billion yuan (US$8.53 billion) last In comprehensive strength, the top throughout the past three years, year, accounting for 5.2 per cent of 10 firms have some common traits, which is 27 percentage points higher 8 China Enterprise Stock Co Ltd 5 the nation’s market share. along with exploring operational than the average rate of the others. 0 In 2004 and 2003, sales revenues modes with their own unique char- Sales revenues of these 10 fast 9 Shanghai NGS Real Estate Development Group Co Ltd Northeast North East South Central West of the top 10 fi rms stood at 50.55 acteristics. growing companies grew 58.36 per China China China China China China billion yuan (US$6.3 billion) and For example, China Vanke cent annually from 2003 to 2005, 10 Wuhan Real Estate Development & Investment Group Co Ltd GRAPHICS BY WANG YAN 35.68 billion yuan (US$4.44 billion) focuses its core business on hous- nine percentage points higher than SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM respectively, taking up 4.87 per cent ing development for the common the rate of the rest. ASSETS SCALE OF TOP 100 REAL ESTATE FIRMS FROM 2003-2005 and 4.65 per cent of the industry’s total sales revenues. people. Through co-operation with other partners, it has increased Star enterprises Top 10 Chinese real estate firms in 45 Total sales revenues of the top 10 its land reserves and increased its While it didn’t make the top 10 lists profitability increased 35.84 per cent and 92.45 marketability. regarding profitability, assets scale, Assets scale in 2003 per cent from 2004 and 2003, a trend China Overseas Land & Invest- growth potential and comprehensive 40 Assets scale in 2004 showing the increasing influence the ment Ltd targets high-end custom- strength, a number of the top 100 Ranking Name of enterprise 35 top 10 enterprises have on the Chi- ers in the cities. Its competitiveness Chinese real estate firms were also Assets scale in 2005 nese real estate market. comes from continuous innovations rated as star enterprises by the China 1 China Overseas Land & Investment Ltd 30 Predicting a sustained growth and brand building. Real Estate Research Team, for their (US$1=8.05 yuan) of the industry, most of the real Forte Group, however, focuses its unique achievements in operations, 25 2 Hopson Development Holdings Ltd estate firms are actively reserving operations in Beijing and Wuhan, brand building, strategic develop- land resources for future develop- while China Merchants Property ment and marketing. 3 China Vanke Co Ltd 20 ment. Development Co Ltd has launched Some of the most lucrative and 15 Last year, reserved land area of the 18 projects in nine big cities in China, creative star real estate companies 4 Beijing Capital Land Ltd top 100 firms reached 402.11 million with a business scope covering high- are developing niche products. 10 square metres, with 43 enterprises end office buildings and residential Living a healthy lifestyle is very 5 Forte (Group) Co Ltd each having a reserved land area be- projects geared toward various popular at the moment, so real estate 5 tween 1 million and 5 million square consumer groups. developers have adjusted their mar- 6 SOHO China 0 metres. Nine enterprises each have Guangzhou Henda has placed keting strategies and launched a se- <1 1-3 3-5 5-10 10-20 >20 a reserved land area of more than its operational emphasis on forging ries of environmentally friendly and 7 Nanjing Chixia Development Co Ltd billion yuan billion yuan billion yuan billion yuan billion yuan billion yuan 10 million square metres, up from strategic partnerships with other energy-saving housing projects. GRAPHICS BY WANG YAN 2003 when there were only five such famous-brand companies, as well as Focusing on the “green, healthy, 8 Shanghai Sansheng Hongye Investment Group SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM companies. controlling costs. energy-saving and environmental- RESERVED LAND AREA AND PLANNED FLOOR SPACE Take China Vanke Co Ltd as an Increasing land reserves through friendly” aspects, housing projects 9 Poly Real Estate (Group) Co Ltd example. The company’s newly built purchasing, government land auc- developed by Canada LVC Inter- OF TOP 100 FIRMS IN 2005 floor space was 2.6 million square tions and co-operation with partners national Investments Inc, Beijing 10 Financial Street Holdings Co Ltd 35 metres last year. At present, it has a are the common features of the top Yongtai Real Estate Development reserved land area of more than 10 10 firms. Co Ltd and Xiamen Yuzhou Group 10 Reserved land area million square metres, proving that Through purchasing and partici- Co Ltd enjoy great success in the Beijing Vantone Real Estate Co Ltd 30 Planned floor space its reserves can sustain development pating in government land auctions, market. 25 (Unit: 10,000 square metres) for three years, if the existing devel- oping scale is maintained. Poly Real Estate’s land reserves reached 10 million square metres Other developers such as Wuhan Baibuting Group, Shanghai Kaidi Top 10 Chinese real estate firms in 20 Based on the sufficient land re- last year. Enterprise (Group) Co Ltd, CIFI growth potential serves at hand, the top 100 firms re- With respect to the assets scale, Group Co Ltd, Beijing Qianyuan ported they are planning to develop Beijing Capital Development Hold- Real Estate and Zhejiang Hongrun 15 projects with a total floor space of ings Co Ltd ranked first on the top 10 Holding Co Ltd place special empha- Ranking Name of enterprise 283.13 million square metres in the list, with assets totalling more than sis on market segmentation. 10 next few years. Seven companies 50 billion yuan (US$6.22 billion), Their tailor-made products have 1 Shanghai Industrial Real Estate each have plans for more than 10 followed by China Vanke, Shang- satisfied the demands of targeted 5 million square metres, and another hai Industrial Real Estate, China customer groups, and increased their 2 Beijing Sunshine100 Real Estate Development Co Ltd 36 said they have planned floor space Overseas land & Investment and market shares significantly. 0 between 1 million and 5 million Shandong Luneng Estate. Researchers found that successful 3 Coastal Greenland Ltd <20 20-50 50-100 100-300 300-500 500-1000 >1000 square metres. The 10 largest enterprises have developers attached high importance Based on their competence in risk combined assets of 186.6 billion to local market developments, where 4 Shandong Luneng Estate Group Co Ltd SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM GRAPHICS BY WANG YAN control, the top 100 real estate firms yuan (US$23.2 billion), accounting they build up their brands and stand showed an incredible profit-making for 38.1 per cent of the total of the creatively at the forefront of the local 5 Jiangsu Xincheng Real Estate Co Ltd aptitude in 2005. top 100 firms. real estate industry. PROFIT INDICES OF TOP 100 FIRMS IN 2005 The average annual return on to- Their combined sales revenues hit Fujian Zhenro Group Co Ltd, 5 Sino-Ocean Real Estate Development Co Ltd 40 tal assets, return on equity and sales 49.94 billion yuan (US$6.21 billion), Henan Xinyuan Real Estate Co Ltd Return on total assets before tax profit rate of the top 100 enterprises taking up 31.63 per cent of the top and Guangxi Orientland Hangyang 7 Chongqing Jinke Industrial (Group) Co Ltd 35 during the 2003-05 period were 7.83 100’s total. Group Co Ltd are all such local real Return on equity per cent, 18.68 per cent and 17.4 per In addition, their total floor space estate stars. 8 Shanghai Urban Development Group Co Ltd 30 cent respectively, according to the under construction stands at 29.17 With sales accounting for 3 to 5 per Sales profit rate research report. million square metres, which ac- cent of their respective local market 9 Wuhan Fuxinghuiyu Real Estate Co Ltd 25 In 2005, there were 33 f irms counts for 33.76 per cent of the total shares, they are in an advantageous among the top 100 with a return on amount of the top 100, and 2.07 per position in market competition. 10 Ningbo Yinyi Group Co Ltd 20 total assets of less than 5 per cent. cent of that of the entire industry. Ample land reserves are yet anoth- However, 20 enterprises realized a In terms of profitability, China er factor for their success, and also 10 Shanghai Zhongrong Property Group Co Ltd 15 return on equity between 10 and 20 Overseas Land & Investment sits ensures their sustainable growth. per cent and 38 companies achieved atop the list with a net profit of 1.6 Guangxi Orientland Hangyang 10 a sales profit rate between 10 and 20 billion yuan (US$198.7 million). Co Ltd has a land reserve of more estate industry. Ltd, Powerlong Group Develop- per cent. Also among the top 10 are Hopson than 5 million square metres, for At this breakneck speed, some of ment Co Ltd, Shenzhen Fuchun 5 The research report also indicates Development Holdings Ltd, China instance. the newcomers have succeeded in Oriental Group, and Chonqing the net profit of the enterprises is ris- Vanke, Beijing Capital Land, Forte Henan Xinyuan Real Estate Co Ltd ranking among top developers, ac- Yuneng Industry Group Co Ltd 0 <5% 5-10% 10-20% 20-30% 30-40% 40-50% >50% ing steadily. Group, SOHO China and Nanjing and Fujian Zhenro Group Co Ltd have cording to the research report. are such versatile players in various In 2005, 58 per cent of the top 100 Chixia Development Co Ltd. also kept land available for house con- On the other hand, house builders industries. SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM GRAPHICS BY WANG YAN realized a net profit of more than 100 The total net profits of the top 10 struction, with land reserves exceeding began to extend their business chains Covering different fields, these million yuan (US$12.43 million), profitable enterprises reached 6.7 3 million square metres. to related industries. companies have more options to whereas the ratio was 48 per cent in billion yuan (US$832.2 million) in The research report said another Shenzhen-based Futong Real Es- hedge particular industrial risks. TAXES PAID BY TOP 100 FIRMS FROM 2003-2005 2004 and 34 per cent in 2003. 2005. trend of the real estate sector is that, tate, Zhejiang-based Golden Shining Thus they have gained a more 60 On the other hand, the proportion Among the 10 most lucrative while more players from other fields Real Estate Group, Wuhan Universe balanced growth through integrat- of enterprises with a net profit of less firms, China Overseas Land & De- are joining in the industry, even Industry Group and Fujian Guanya ing diverse operations. than 100 million yuan (US$12.43 velopment, China Vanke, Hopson more house developers are extend- Group Co Ltd adopted this diversi- Despite a dropping share in the top 50 Taxes paid in 2003 million) was reduced to 42 per cent Development and Poly Real Estate ing their operations to a wide range fied business strategy. 100 list, State-owned developers still last year, down from 52 per cent in saw their net profits surpassing of industries. Backed by their core business play a pivotal role in the industry. 40 Taxes paid in 2004 2004 and 66 per cent in 2003. the 1 billion yuan (US$124.3 mil- On the one hand, hefty profits in – real estate development, they have With a longstanding reputation Taxes paid in 2005 Increased profits strengthened the lion) mark last year. In addition, the industry attracted other indus- expanded their businesses to include and professional staff, they have enterprises’ financial liquidity. The there are two companies with net trial players, including Guangzhou- construction materials, decorations increased their competitiveness in 30 average asset liability ratio was 63.84 profits between 500 million yuan based Paragon Group, Shanghai and property management. the real estate market. per cent, 65.67 per cent and 66.35 per (US$62.12 million) and 1 billion Dazhong, Chongqing Loncin and The developers, labelled as com- Based on a market-oriented 20 cent in 2005, 2004, and 2003 respec- yuan (US$124.3 million), and four Jilin Yatai, to scramble for the real prehensive real estate companies, strategy, they have optimized their tively, showing the firms’ increasing companies between 100 million yuan estate market shares. are capable of providing a package resources and maintained a leading abilities to pay back loans and to (US$12.43 million) and 500 million Through setting up subsidiaries or of services and products to meet the position in the real estate market. 10 resist financial risks. yuan (US$62.12 million). teaming up with existing developers, needs of their customers. Xiamen C&D Real Estate Cor- As a pillar industry in China’s However, the top 10 firms wit- the companies with reliable reputa- Some developers have gone even poration Ltd, Shanghai Urban 0 economy, the real estate sector pays nessed a decrease in return on equity tions in other fields have set out to further. They explored opportunities Construction Group Co Ltd and <50 50-100 100-300 300-500 500-1,000 >1,000 more taxes to the State. during the past three years. The ratio explore the real estate business. in different sectors, such as biologi- Shanghai Zhongjian Real Estate million yuan million yuan million yuan million yuan million yuan million yuan The total amount of taxes paid by in 2005 decreased by 19.27 per cent They have capitalized on intan- cal technology, energy and informa- Group Co Ltd were cited as examples the top 100 real estate firms reached from 2004, whereas the ratio in 2004 gible property, recognized brands, tion industry. of an impressive performance among SOURCES: CHINA REAL ESTATE TOP 10 RESEARCH TEAM GRAPHICS BY WANG YAN 19.07 billion yuan (US$2.37 billion) dropped 4.22 per cent from 2003. and performed strongly in the real Shanghai Sanxiang Group Co the State-owned developers.