CHINA VANKE CO., LTD.
China Vanke Co., Ltd. was established in 1984. After 30 years of development, it has become a leading urban and rural development and living services provider in China. The Group centers on the three most vibrant economic circles nationwide and hub cities in Midwest China. In July 2016, the Group was first listed on Fortune Global 500, ranking 356th. In 2017, the Group ranked 307th.
In 2014, Vanke had extended its position as a company offering “good houses, good services, good community” to an “integrated urban services provider” in its fourth ten-year development plan. In 2018, Vanke will further upgrade such position to “urban and rural development and living services provider” and refine it into four roles: a solution provider of better life, a contributor to real economy, an innovator for future development and a creator of harmonious ecosystem.
In 2017, SZMC became the largest shareholder of the Group. SZMC always supports the mixed ownership structure, integrated urban ancillary services provider strategy and business partner mechanism of Vanke, and supports the operation and management undertaken by Vanke’s management team in accordance with pre-determined strategic objective as well as the deepening of the “Railway + Property” development model.
Vanke always upheld the vision of “building quality housing for ordinary people, developing premises for accommodation”. The Company adhered to two main development policies of synchronous development with the municipalities and our customers. Vanke will insist on providing quality products and services to ordinary people and contribute to satisfying people’s demand for a better life with its best efforts. . The core business of the Group includes property development, property service and rental housing. In 2018, the Group further enhanced its positioning to “urban and rural development and living services provider”. The ecological system formed had already taken its shape. On the basis of consolidating the inherent advantages of residential properties development and property services, our businesses were extended to areas such as commercial development and operations, logistics and warehousing services, rental housing, industrial towns, skiing resort business, elderly care and education. This had laid a sound foundation for better serving the people’s needs for a better life and achieving sustainable development.
In 2017, the Group realized a revenue of RMB237.34 billion, representing a year-on-year increase of 3.7%; and net profit attributable to equity shareholders of the Company of RMB28.05 billion, representing a year-on-year increase of 33.4%. Basic earnings per share amounted to RMB2.54, representing a year-on-year increase of 33.4%. Net return on equity on a fully diluted basis was 21.1%, representing an increase of 2.61 percentage point as compared to that in 2016.
In the property development business, the Group realized a sales area and sales amount of 35.952 million sq.m. and RMB 529.88 billion, representing a year-on-year increase of 30.0% and 45.3% respectively. The Group’s share in commodity housing market in China had risen to 3.96%(2016: 3.1%). The sales amount in 22 cities ranked first in the region. Furthermore, the Company paid constant attention to investment opportunities in overseas markets. By the end of 2017, it has already entered seven cities overseas, namely San Francisco, Singapore, New York, London and Seattle, Kuala Lumpur etc.
Vanke has been insisting to “building quality housing for ordinary people, developing premises for accommodation”. The main products of the Group’s property development business are commodity housing and commercial auxiliary facilities. Among the products sold in 2017, housing, commercial office and other auxiliary facilities accounted for 82.7%, 13.6% and 3.7% respectively. In particular, housing products focused on residential needs of mainstream customers, with medium and small housing under 144 sq.m. accounting for 93% of total. And in past 5 years, this proportion are all over 90%.
In 2017, the property service business of the Group, namely Vanke service, achieved revenue of RMB6.96 billion that were accounted in the consolidated financial statements, representing a year-on-year increase of 71.7%. As at the end of 2017, Vanke Service had tapped into 80 cities.The mission of Vanke Service is to “allow more users to experience the charm of property services”. During the Reporting Period, Vanke Service focused on enhancing its capability in management of commercial and office properties and providing building-related services, such as turnkey furnishing service, housing trust, secondary renovation, as well as living-oriented services, such as sunshine property, neighborhood community and neighborhood fair, centering on the ancillary services for the buildings and home owners’ working and living needs. Our service standards continued to maintain its leading position in the industry. During the period, Vanke Service was awarded “TOP1 of China’s Top 100 Property Service Providers”, ranking top 100 for eighth consecutive year, and received several honours such as “2017 China Leading Property Service Quality Leadership Brand”, “2017 China Property Service Top 100 Most Satisfied Leading Enterprises” and “2017 Leading Enterprise of Special Property Services in China – Enterprise Headquarter”. Vanke’s property service brand value continued to lead in the industry, ranking top in terms of value of property services brand for eight consecutive years.
Over its years of relentless efforts, Vanke has honed its competitive edge in the housing industry: Vanke is the first Famous Chinese Trademark in the real-estate industry, owning brands such as “Wonderland”, “City Garden”, and “Golden Home” that are highly popular with customers all over China; its “Scenic Garden Apartment Building” is the first patented product and invention patent in the Chinese housing industry; its property service business was the first to be ISO9002-certified in China; its Vanke Club is the first customer relations organization that has ever been created in the housing industry. The Company launched the world’s first open forum for customer compliant. It is also the first Chinese real-estate company that has hired a third-party institution to conduct a total customer satisfaction survey. The Company also put forward the “6+2 steps” for customer services and get a patent for it. In the Future, the Group will continue to deepen the “good houses, good services, good community” product concept and satisfy the real household demands of mainstream customers.
In the field of commercial development and operation, there were a total of 172commercial projects under management of the Group, and total gross floor area of more than 10 million sq.m. at the end of 2017, The Group uses SCPG as the management platform, and upholds the concept of building for the Company. SCPG continued to promote business service innovation, inventory asset management and digital construction. Urban space experience were optimized to facilitate city update and upgrade. At the same time, it actively explored the business operation model for the community. Up to now, the total scale of area managed by SCPG reached second in the industry.
In the field of logistics and warehousing services, the company focused on high-standard products. The customers are mainly domestic mainstream e-commerce, couriers and express, high-end manufacturers, modern retailer and fresh food companies. As of March 27, 2018, the Group’s logistic property business obtained a total of 62 projects with a GFA (GFA of leasable properties) of 4.82 million sq.m., in which 26 projects were completed and in operation with an average occupancy rate of 96%. In 2017, the Group formed a consortium with Bank of China Group Investment Limited, Hopu Logistics Investment Management Co., Ltd., Hillhouse Capital Logistics Management, Ltd. and SMG, and participated in the privatization of Global Logistic Properties Limited, which was a leading global provider of modern logistics facilities.
In the field of Rental residential properties, The Group aims to become the world’s leading residential leasing company and has consolidated its operations under a centralized long-term rental apartment brand “Port Apartment”. Port Apartment strives to satisfy the city youth population’s demand for medium-term and long-term rental housing. As at the end of the Reporting Period, the Port Apartment covered 29 first and second tier cities, with a total number of more than 100,000 units. More than 30,000 units were in service. The Group also launched the“Wan Cun Plan”. The Group will specialize in integrated improvement and leasing operations of urban townhouse projects. The public facilities of the urban townhouses will be upgraded, which can be used to provide standardized rental services.
Furthermore, adhering to two main development policies of synchronous development with our customers and the municipalities, the Group actively explores expansion in business layout and stepped into skiing business, pension, industrial offices, education businesses .etc. on the basis of consolidation of core business advantages.
In the aspect of skiing resort business, the Group continued to improve its quality and create the best ski holiday destination. During the snow season from November 2017 to February 2018, the total number of visitors to Jilin Vanke Songhua Lake resort and Beijing Shijinglong skiing resort exceeded 500,000 people, which was a record high. The operation capabilities of Vanke Songhua Lake Resort had been recognized by the industry and won the “2017 Best Ski Resort in China” awarded by the 5th World Ski Award.
In terms of elderly care business, the Group had commenced operation in 15 cities. As of the end of the Reporting Period, a total of about 50 bedspace projects were acquired, and about 120 other daytime/home service centers without beds were acquired. Projects like Suiyuan Jiashu in Hangzhou were highly recognized.
In terms of education business, the Group had explored the K12 full-time teaching system through various modes including innovative public schools, PPP and private international schools. At the same time, we actively expanded our quality education bases, including urban camps, community camps, and outdoor camps. At present, the Group has participated in the operation of over 10 schools nationwide. In terms of camp education, Meisha Outdoor Camp had provided quality education services to more than 100,000 young people since its establishment in 2015.
In 2017, the Group entered into a strategic cooperation agreement with Banyan Tree Singapore to expand hotel and relevant businesses in mutual by celebrating advantages from both sides. The Group also entered into a strategic cooperation framework agreement with the Chinese Culture Group Co., Limited so as to leverage on the resources and advantages of Chinese Culture Group Co., Limited and its partners in the culture field and bring more diverse products and services to the cities and its customers.
In terms of Product and project management, the Group always upholds the concept of quality first. Through the quarterly evaluation of projects, delivery evaluation and customer inspection guidelines, product quality is guaranteed and constantly enhanced in all three aspects from process monitoring, results examination and customer perspectives. The performance and qualityof the products purchased were guaranteed throughthe “Skynet Action”. The company continued to promote the development of green buildings and had been committed to leading the green development in the industry, maximizing the conservation of resources, protecting the environment and reducing pollution. In 2017, the area of projects labelled as green buildings completed by the Group was 43.724 million sq.m. Since the promotion of green buildings in 2009, the area of green building in the Group reached a total of 112 million sq.m. The Group Actively promoted the application of residential industrialization technologies, which significantly reduces energy andresource consumption through large-scale, intensive, and industrialized construction methods. The Group conducts one of the best practices for the construction industry to practice green and low-carbon development. In 2017, the new construction area of the Group subject to industrialization accounted for 84% of the total construction area with mainstream products 20% more efficient compared to traditional technique when it comes to construction schedule.The Group also improves project management and operation through scientific and technological empowerment. In 2017, the Group continued to promote the application of BIM (Building Information Modeling) construction information technology in projects, in order to enhance quality of blueprint and reduce the modification to construction work at site. Furthermore, the company promote application of resources management system on business projects, and collect data of actual operation status and energy consumption level of various energy use equipment in real time, undertake more efficient energy-saving work based on data, in order to realize actual green energy-saving operation, and provide feedback and guidance to subsequent new projects.
At present, the company is pushing forward business partnership scheme in depth, the current business partnership scheme, based on the principles of “consensus, co-creation, joint assumption and sharing”. By combining capital, knowledge labor and entrepreneurship organically, enthusiasm of employees were better motivated through system innovation. The business partners had been devoted to create real value of longer term for the maximum number of stakeholders and providing practical samples for the innovation and upgrading of modern enterprise systems. In 2017, the Group explored and formulated a scheme for systematically explaining the theoretical content and mechanism of its business partnership highlights through the team-building approach. At the same time, the Group actively pursued practical exploration of business partners.
While achieving the growth in performance, the Group also responded positively to the command of the Central Committee of the Communist Party of China and the State Council in succeeding poverty alleviation. By leveraging on its own advantages, we conducted poverty alleviation at the industry, education, and employment level, thereby contributing our strengthen to realize a moderately prosperous society. We also continued to carry out charitable activities in aspects such as rural revitalization, environmental protection, education development, children’s diseases, and protection of ancient buildings.
In 2008, Vanke Charity Foundation was created, after initiated by Vanke and approved by the Ministry of Civil Affairs of the People’s Republic of China. Up to now, the Foundation has spent RMB 523 million mainly on Precise Poverty Alleviate, education development, child healthcare, emergency relief, community development, rubbish classification, climate conference and environment protection, etc.
Vanke continues to carry out the work of taking targeted measures to help people lift themselves out of poverty. The Group and Shenzhen municipal government jointly endowed the Tibet Intangible Cultural Heritage Museum,. Vanke responded the call from Shenzhen municipal government, completed the construction and delivery of the Tuheman School in Xinjiang in 2016. Taheman School did not get any damage from the earthquake in Tajikistan in 2017, guaranteed the safety of the teachers and students. Vanke also donated for building 12 photovoltaic power stations for poverty alleviation in Zhangbei county in Zhangjiakou city and allocated all income to the needy families at no cost to constantly provide economic income for the poor population; In 2017, all of the power stations were connected to the grid. In addition, Vanke helps the agricultural products form poor rural areas directly reaches millions of households served by Vanke Service through "online" and "offline" distribution channel.
The Group continues to focus on education development. After the 2008 Sichuan earthquake, Vanke donated 120 million yuan to build Zundao School and Zundao Public Health Center and supported the sustainable development of the school. In 2016, Vanke helped construct the Taheman Boarding School and built new comprehensive building, indoor playground and outdoor plastic track playground in Taxkorgan County. In addition, Vanke Charity Foundation co-operated with the Leadfuture Foundation to support Teach for China Program, help them to recruit excellent volunteer teachers. Vanke also Charity Foundation co-operated with Guixin Foundation in Rural Education Program to improve the basic education condition and quality of the schools in Zhenfeng county, Guizhou Province.
For many years, Vanke join hands with all walks of life, carry out specific salvation and help programs to help child grow up healthy and happily. And Vanke has been concerned about climate change and actively delivering its green responsibility. Since 2009, Vanke has participated in the United Nations Climate Change Conference for many years and host the China Pavilion Enterprise Conference in order to promote international cooperation and communications on climate change. Furthermore, Vanke has been vigorously promoted public welfare projects like rubbish classification, wetland conservation, biodiversity conservation and conservation of historical building.
Looking ahead, the Group will always adhere to the “fundamental principles in operation and team with striving partners”, which will focus on “the people’s need for a better life”. Adhering to Customer-centric, and based on cash flows, we will carry out in-depth implementation of the strategy of “urban and rural development and living services provider” in order to create real value continuously, and strive to become a respectable enterprise in this great new era.