CHINA VANKE CO., LTD.
China Vanke Co., Ltd. was established in 1984.After 30 years of development, it has become a leading real-estate company in China since it stepped into the housing market over thirty years ago in 1988.In July 2016, the Group was listed on Fortune Global 500, ranking 356th.
The Group strategically positions itself as an “integrated urban service provider”, upheld the vision of “building quality housing for ordinary people and building housing acceptable for occupation”, The Company adhered to two main development policies of synchronous development with the municipalities and our customers. The core business of the group includes property development and property service. In recent years, the group focuses on the position of “integrated urban service provider”, actively explore expansion in business layout and stepped into commercial property, logistic property, long-term rental apartments, skiing business, pension and education businesses on the basis of consolidation of core business advantages.
The Company focused on urban economic areas and further developed existing cities. As of the end of 2016, the Group had presence at 65 cities in Mainland China, which were distributed at Guangshen Region with the Pearl River Delta as the core, the Shanghai Region with the Changjiang River Delta as the core, the Beijing Region with the Bohai-Rim Region as the the core and the Central and Western Region comprised of core cities at Central and Western China.
In 2016, the Company realized a revenue of RMB228.92 billion, representing a year-on-year increase of 24.2%; and profit attributable to equity shareholder of the Company amounted to RMB21.02 billion, representing a year-on-year increase of 16.0%. Basic earnings per share amounted to RMB1.9, representing a year-onyear increase of 16.0%. Net return on equity on a fully diluted basis was 18.5%, representing an increase of 0.44 percentage points as compared to that in 2015.
In property development business, the Group realized a sales area and sales amount of 27.654 million sq.m. and RMB364.77 billion in 2016, representing a year-on-year increase of 33.8% and 39.5% respectively. The Group’s market shares in China in 2016 was 3.1%, representing a year-on-year increase of 0.1 percentage point. In 2016, the Group recorded sales amount of over RMB10 billion in 14 cities, namely Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Wuhan, Suzhou, Dongguan, Foshan, Nanjing, Xi’an, Ningbo, Shenyang and Tianjin, and ranked top three in terms of market sales in 40 cities.
Furthermore, the Company paid constant attention to investment opportunities in overseas markets. By the end of 2016, it has already entered six cities overseas, namely San Francisco, Hong Kong, Singapore, New York, London and Seattle. In 2016, the sales area attributable to overseas project amounted to 36,000 sq.m., and sales income of RMB3.30 billion was contributed. Investment in overseas projects allowed the Group to introduce excellent products and business visions from abroad and enhance its brand influence in overseas markets.
Vanke has been insisting to “building quality housing for ordinary people and building housing acceptable for occupation”. The main products of the Group’s property development business were commodity housing and commercial auxiliary facilities. Among the products sold in 2016, housing, commercial office and other auxiliary facilities accounted for 84.7%, 11.9% and 3.4% respectively. The Group’s housing products focused on residential needs of mainstream customers, with medium and small housing under 144 sq.m. accounting for 95%. And in past 5 years, this proportion are all over 90%.
The Group is engaged with property services through Vanke Service. In 2016, the revenue of the Company’s property services business achieved RMB4.26 billion, representing a year-on-year increase of 43.4%. Vanke Service launched “Rui Service 3.0” and established “Sunshine Community, Transparent Property”, under which income received other than property fees and expenses paid out of property fees were disclosed to property owners. It also implemented the “Friendly Neighborhood Scheme” to donate the profits from “Neighborhood Mart” to the community for equipment renewal and culture building, further improving the brand uniqueness and reputation of Vanke Service. In addition, Shenzhen Wan Rui Intelligent Technology Company Limited controlled by Vanke Service successfully registered as a state-level high-technology enterprise.
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 “Quality housing, quality services, quality community” product concept and satisfy the real household demands of mainstream customers.
With the real estate sector entered into the silver age, the Company adhered to the two mainline policies of synchronous development with the municipalities and customers, followed the urban development trend and the increasing customer needs to actively explore new business opportunities.
There was an extensive coordination between commercial property and the Group’s business, therefore the commercial property segment was indispensable for urban ancillary services. Over the years, the Group has strived to cultivate its capabilities in management and operation of commercial property. And in 2016, through the joint acquisition platform withcertain partners, the Group acquired the equity interests in SCPG. SCPG had solid capabilities in commercial development and operation management, as well as large and stable quality customer base. After the acquisition, the business management area of the Group has reached the 3rd place in China.
The Group adhered to the strategy of “focusing on major customers and key cities, and emphasizing high-standard ware house products” for logistic properties to maintain stable and healthy expansion. As of the end of 2016, the Group obtained 18 logistic property projects, with GFA of approximately 1.47 million sq.m. in total. In 2016, the Group had 10 new projects and the new leasable area amounted to 960,000 sq.m.
As of the end of 2016, the Group had operated and managed three skiing projects, namely Jilin Vanke Songhua Lake Project, Qiaoshan Beidahu Project and Beijing Shi Jinglong Project, and established the skiing brand image of Vanke, ranking the first in the countryin terms of piste area, serving area of snow system and number of ropeway. As of the end of 2016, Vanke Songhua Lake Resort was officially promoted to an national 4A tourist attractions.
Coordinating the “Opinions on Accelerating the Cultivation and Development of Rental Housing Market” promulgated by the State Council, the Group actively explored in the long-term rental apartment market to provide the newcomer with qualified and cost-effective long-term renting experience. Currently, the Company has established a unified external operating brand – “BoYu”.
With reference to the demand for elder care in the cities, communities and at home, the Group further explored the pension model. Sui Yuan Jia Shu Project in Hangzhou, the Group’s first large pension community had over 600 residents since its commencement of operation in 2015, and became the reception and visiting location for G20 Summit in 2016.
In 1991, Vanke became the second company listed on Shenzhen Securities Exchange, and has since been approved by investors for its sustained growth and transparent, standardized corporate governance structure. Over the years, it has been included in the Forbes 200 Best Under a Billion, Asia’s 200 Best Under a Billion, and Asia’s Fab 50 Companies; for many times, it has received awards for best corporate governance and best investor relations by international authoritative publications such as IR Magazine. It has been rewarded “China's Most Admired Companies” by the Fortune Magazine(Chinese version) for 9 times in succession and 12 times for “China’s most respected companies” by The Economic Observer and Management Case Research Center of Peking University.
Since the real estate sector enter the silver age, the Group initiated the Business Partners Mechanism in 2014, in order to further motivate the sense of ownership, work enthusiasm and creativity among the operations and management teams, and provide support on administration mechanisms for the change of business operations. Leading by the idea of “Co-creation, co-bearing and sharing”, Vanke Business Partners Mechanism is a set of institution arrangements which will guide the construction of echeloned business partner team, platformed business partner organization, Multi-level business partner identification, and incentive and development mechanism, support the strategic upgrade and business development of the Group, help form a harmonious, symbiotic, healthy, civilized, intergenerational organization and industrial ecology, and create long-term sustainable value for the broadest stakeholders.
Vanke Business Partners Mechanism consists of business partner stock holding plan, co-investment mechanism and Partners In Charge. At the end of 2016, to further strengthen the co-creation, co-bearing and sharing with co-investor, the Group further improved the co-investment scheme. With the introduction of the business partner stock holding plan, the alignment of positioning between the management and the shareholders were further strengthened, and the consistency of interests between the partners and the shareholders were assured.
Vanke believes that the cornerstone of its success is: safeguarding the bottom line of value, adhering to its principle, and emphasizing fair returns from the market. It is committed, through its standardized, transparent corporate culture and reliable, focused development model, to becoming a respectable enterprise that is most popular with customers, investors, and employees.
For its decades of business operations, Vanke has upheld the principle “do not hoard land; do not withhold property for future sales at higher prices; do not buy the most expensive land for development”; it adopts the strategy of fast turnover, fast development and gaining returns from investments through professional expertise. It has been operating in a standardized manner. It has, since 2014, accumulatively paid RMB104.7 billion in taxes, making it the No. 1 real-estate developer in China in terms of tax payment; more importantly, the amount of taxes it has paid each year has been higher than its yearly net profit.
Vanke provides its employees with room and opportunity for their sustainable development, encouraging them to grow together with it; an advocate for simple interpersonal relations, it is devoted to creating a working atmosphere where the employees can give full play to their talent. In 2001, the Company first made the professional manager quality model and continued to develop and improve it. In the same year, the Company took the lead in launching the staff satisfaction survey in China. Only with satisfied staffs can we have satisfied customers.
Talents are the most valuable assets and core competitiveness of Vanke. Since 2014, the Company has been actively cultivated business partner culture and promote the idea of “Co-creation, co-bearing and sharing”. The Group will adopt striver-orientation in selecting, educating and introducing strivers who can meet the needs of business development, and build a striver team which is strong in conviction, strict in discipline, cooperative and have the courage to bear responsibility.
Since inception Vanke has been advocated “creating a healthy and abundant life”, promoted the values of “Customers are always our partner”, “Talents are the capital of Vanke”, “Sunny and transparent corporate governance system” and “Sustainable growth and leadership”. It hopes to improve the health of its employees by cultivating and promoting their health consciousness. Vanke is the first company in China that links the bonus of management team with staff’s health status. If the staff’s health indicator declined or failed in the physical test, the bonus of management team will be deducted accordingly.
Responding to National Fitness strategy, Vanke launched Run for Fun Race since 2013. This race advocates an active way of work and life by encouraging companies to pay attention to their staff’s personal health, add sports facilities and improve the working environment. Nowadays, the “Run for Fun Race” series have included full marathon, Run for Fun Race at city level for white collars, community Run for Fun Race to promote family harmony and Run for Fun Race on campus for graduates. Run for Fun Race is the only company-sponsor event be given official directives by the Department of Mass Sports of General Administration of Sports of China. At the same time, it is also one of the key projects of National Fitness strategy supported by the government.
Vanke insist in creating refined quality to consolidate product competitiveness. The Company established Vanke Architecture Research Center in 1999. In 2012, the Company initiated “One Billion for One Thousand Engineers Plan”, according to which large amount of engineers would study abroad in order to enhance engineering quality level. Until the end of 2016, over 1300 people had participated in “One Billion for One Thousand Engineers Plan” in total.
In 2016, the total delivery volume of the Group amounted to 214,000 units, reaching the largest record scale. The Group continued to promote exact survey, delivery appraisal and other management tools, provide customers with inspection guidance and enhanced the frequency of “Skynet Action” to maintain good product quality. The Group’s European Village in Guangzhou was awarded Luban Award, the best quality award in the architecture industry.
Vanke is committed to leading the industry in energy efficiency by relentlessly promoting green construction and housing industrialization. the Group continued to enhance quality and efficiency through application of industrial technologies and reduced the reliance on workforce and consumption of materials. During the year, the Group continued to promote the green strategy and completed 28.34 million sq.m. of green construction, of which 13.19 million sq.m. were granted as the green label projects. 14 projects were granted the three stars rating, covering area of 1.828 million sq.m. As air quality has been a main social concern in recent years, it has developed a technical solution called the smog-removing and air-freshening system to ensure a healthy living space for customers by making the indoor air quality as good as that in a natural scenic area.
In 2007, Vanke Architecture Research Center was ratified as a national housing industrialization base by the Ministry of Housing and Urban-Rural Development of the People’s Republic of China. Dongguan Vanke Architectural Technology Research Co., Ltd. received a High-tech Enterprise Certificate jointly issued by Guangdong Provincial Department of Science and Technology, Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT, and Guangdong Local Taxation Bureau, becoming the first high-tech enterprise thus certified in the industry. Among the new mainstream products of the Group in 2016, the proportions of the three industrial applications, namely prefabricated components, interior wall assembling and non-plastering of internal and external walls, amounted to 43.5%, 100% and 100% respectively.
While striving for business growth, the Group persistently adhered to its values and concepts, actively fulfilled social responsibilities through concern with the development of stakeholders and is committed to allow more people sharing our operating results.
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 and the State Council. 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.
In 2016, the Group responded to the government’s call to participate in accurate poverty alleviation in terms of education, industry and employment, fully demonstrated its professional edges and expanded the radial and leading influence, including (1) the Company donated for building 12 300kw 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; (2) the Company carried out 6 school-enterprise cooperation projects with vocational schools in Taijiang, Danzhai and Leishan in Guizhou and Huichang in Jiangxi and Shunping and Zhangbei in Hebei to nurture property management talents and recruit them to Vanke. It offered 4 types of position including property manager, property customer service, utility maintenance and safety management, with a view to helping the poor.
Vanke 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. Before the aided reconstruction, Zundao school served the last two place in the senior high school entrance examination. Now, the school continues served the third place in Mianzhu city for five years. In 2016, Vanke helped construct the Tahman Boarding School and built new comprehensive building, indoor playground and outdoor plastic track playground inTaxkorgan 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. In 2016, Vanke 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. Partnering with Ai You Charity Foundation, Vanke has set up health care center for disease orphans in Wuhan, Kunming and Nanchang and provided healthcare for 437 orphans. Vanke Charity Foundation also partner with other charity organizations to carry out aid project for poverty-stricken children suffering from congenital heart disease. Vanke has helped 2832 children in total. In 2016 alone, Vanke helped 138 children. In addition, Vanke Charity Foundation continues to pay attention and launch campaigns to advocate caring for autism children, raise and donate money for charity.
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.