Analysis Of High Turnover Operation Model Of Real Estate Enterprises

After a golden decade of rapid development from 2004 to 2013,Chinese real estate industry has entered a period of adjustment,transformation and long-term mechanism exploration since 2014.The promulgation of real estate regulation policy,rising cost and increasingly fierce market competition have increased the pressure on real estate enterprises to survive,and the industry concentration has increased.Large-scale real estate enterprises such as Hengda,Biguiyuan,Vanke,Rongchuang and other large-scale real estate enterprises occupy the leading position.Large-scale real estate enterprises can expand rapidly,benefiting from the high turnover mode of operation.Real estate enterprises have the characteristics of heavy land assets,large capital demand,high debt ratio and long development cycle.Through high turnover,real estate enterprises can shorten the development cycle,quickly withdraw funds,reduce the cost of capital use,rapidly expand the scale and better avoid risks.Therefore,high turnover has been the goal pursued by many real estate enterprises.As a representative of high turnover,Biguiyuan has its outstanding operational capability and characteristics.From 17.5 billion yuan in 2008 to 55.8 billion yuan in 2017,the sales of Biguiyuan have achieved rapid growth,ranking first in the industry in the country.Through the perfect supply chain system,pre-work,SSGF industrialized construction system and lower sales price,combined with the company’s excellent management and execution capabilities,Biguiyuan keeps breaking new turnover limits,and still achieves excellent capital turnover on such a huge scale.By comparing with the financial indicators of the three benchmarking enterprises,we can see that although the operating profit of Biguiyuan is low under the high turnover,it has a higher inventory turnover rate and a higher return on net assets.High turnover can improve the efficiency of capital use and help enterprises achieve rapid growth,but to achieve high turnover requires a good external environment and excellent internal operation ability,and a high level of capital planning and operation rhythm may bring corresponding risks.When the growth rate of the industry slows down and enterprises reach a certain scale,high turnover will also be restricted.In order to prevent risks and break through the bottleneck of development,real estate enterprises should seek more development paths,such as light assets operation and diversified development strategy,in order to achieve long-term and healthy growth.