Author: Cao Anxun
Editor: Zhang Xiaoling
Since June 2021, the adjustment in the real estate industry has been so long and intense that many real estate tycoons have fallen, some have simply given up or disappeared, but the once cosmic real estate giant, Country Garden, is still striving to persist.
On December 8th, Yang Huiyan, the Chairman of Country Garden, made a rare statement: &#34;The family will definitely support the company at all costs, and the company will strive to become a model for quick recovery.&#34;
Yang Huiyan, who is gentle and refined, made this statement at the company's monthly management meeting. Such emotional words are not her usual style, indicating the immense pressure that Country Garden is under.
Internally, Country Garden has just completed a major regional merger and is fully committed to delivering completed projects. Externally, Country Garden is negotiating a comprehensive debt restructuring plan with creditors, hoping to gain breathing space like Sunac.
Yang Guoqiang and Yang Huiyan do not want to give up. They still want to do their best to save Country Garden.
In recent years, from Song Guangju, Wu Yajun, Ling Ke, Xu Yongjun to Xu Jiayin, Huang Qisen, and others, real estate tycoons have either retired or fallen. Those like Yang Guoqiang and Wang Jianlin who are still persisting in seeking survival are in the minority. In the long bear market and crisis, the credibility and determination of the company's founders have become increasingly important. Creditors will look at their sincerity in solving problems, which will determine the life or death of the company.
The future of Country Garden still depends on the choices made by the Yang family.
<h2>Self-help</h2>
Since the public default in October, Country Garden has been shrouded in rumors. Over the past two months, Country Garden's founder Yang Guoqiang and President Mo Bin, as well as Yang Huiyan and her husband Chen Chong, have appeared in Shunde to dispel the &#34;leaving the country&#34; rumors and reassure the market.
After more than a month, Yang Huiyan made another statement, indicating that the family will support Country Garden at all costs, demonstrating their determination to save the company.
As the controlling shareholder, the Yang family has supported Country Garden with a total of approximately HKD 41 billion through loans, stock purchases, bond purchases, and stock dividends, and has never reduced its holdings.
According to Wall Street News, the Yang family provided Country Garden with a USD 300 million interest-free loan in October, and Yang Guoqiang also sold his private Bombardier Global 6000 aircraft.
Some investors have expressed that companies that are still persisting in the midst of difficulties deserve respect. However, while statements are one aspect, more will depend on Country Garden's subsequent actions.
In the midst of industry and company turmoil, Yang Huiyan is also striving to give the market and investors more confidence.
She stated that the company has conducted sensitivity analysis on extreme scenarios that the business may face. The conclusion is that, under conservative calculations, as long as Country Garden's inventory assets are sold normally, even assuming that Country Garden does not acquire land, there is no tax reduction, and the contribution from the two wings is not considered, Country Garden will continue to maintain positive assets in the next ten years. &#34;I have great confidence in Country Garden's balance sheet repair.&#34;
Based on this, Country Garden has three main tasks in the next 12 months: ensuring project delivery, ensuring operations, and ensuring credit.
Among them, ensuring project delivery is considered the top priority for Country Garden.
Yang Huiyan revealed that in the next 12 months, Country Garden's delivery challenges will enter a deep-water zone, and the estimated delivery volume of Country Garden in 2024 will exceed 400,000 units.
During the meeting, Mo Bin also emphasized, &#34;Ensuring delivery and ensuring safety and quality are the bottom line of the company. We must manage the bottom line well, as it is also the bottom line for the survival of the enterprise.&#34;
In the first 11 months of this year, Country Garden has delivered approximately 500,000 houses, with a cumulative delivery area of 60.43 million square meters, involving 31 provinces and 240 cities.
Country Garden is also making efforts to maintain normal operations in order to ensure delivery. On December 5th, Country Garden issued an internal document, making a series of rapid adjustments to the organizational structure, merging 14 regions into 7 new regions.
This also means that Country Garden is no longer one of the real estate companies with the largest number of regions in China. In three years, the number of regions has decreased from over 100 to 21.
Prior to this, at the end of May, Country Garden also underwent the largest organizational restructuring in recent years. Country Garden Holdings Group established the Real Estate Group and the Technology Construction Group, showing an unprecedented strong intention to accelerate diversified development.
Yang Huiyan stated that the company's organizational structure has now reached a relatively stable stage, and the next step is to identify outstanding talents and improve compensation and incentive mechanisms.
In addition, Country Garden has significantly reduced administrative expenses this year, with a decrease of nearly 60% compared to 2021, in line with the reduction of regions, making efforts to tighten belts and actively save itself.
Positive news has also emerged. On December 1st, Country Garden was invited to attend the Guangfa Bank's bank-enterprise symposium, which shows that the bank still has hope for Country Garden's credit repair and successful recovery.
<h2>Disappointment</h2>
Country Garden's disappointment is a microcosm of the adjustments in the real estate industry in recent years.
In November, Country Garden achieved a total sales volume of approximately RMB 6.11 billion. In the first 11 months of this year, Country Garden's total sales volume was approximately RMB 212.45 billion, ranking 6th among real estate companies.
Before this, Country Garden had won the annual sales champion for six consecutive years.
Once upon a time, Country Garden caught up with the good times of rapid urbanization in China. Over the past decade, Country Garden expanded rapidly nationwide, delegated more authority to regions, and adopted a &#34;high turnover&#34; model, harvesting a large share of the sinking market.
In 2013, Country Garden's total sales volume exceeded RMB 100 billion for the first time, entering the ranks of the top real estate companies. After that, Country Garden surged forward, with annual total sales volume once exceeding RMB 500 billion, becoming a high-profile &#34;cosmic real estate company&#34;.
However, the introduction of the &#34;three red lines&#34; questioned the cash flow management capabilities of real estate companies, and the previous high-leverage, high-turnover model was no longer viable. Coupled with a weak real estate market and the impact of the pandemic, the industry experienced a wave of defaults by real estate companies.
Due to the failure to timely withdraw and shift focus to first- and second-tier cities, Country Garden was burdened by its overly sinking layout. After the market cooled in the second quarter of this year, Country Garden's sales immediately faced the greatest pressure. Eventually, in August, it could no longer hold on and fell into a liquidity crisis.
After completing the overall extension of domestic debt in September, Country Garden is now busy with the restructuring of overseas debt.
According to publicly available data, as of October, Country Garden has approximately USD 9.3 billion in outstanding US dollar bonds, totaling 15 bonds. If all participate in the restructuring, Country Garden will set an example of the top 3 real estate companies in terms of overseas debt restructuring.
This will directly determine the company's credit and survival. The Yang family can only fight to the death.
In addition to debt restructuring, the Yang family is also accelerating the development of the &#34;two wings&#34; business, trying to find a new way out.
At the meeting on December 8th, Country Garden revealed that &#34;in addition to the traditional real estate main business, the technology construction and agency construction businesses are also steadily advancing.&#34;
It is reported that since June of this year, Bozhilin Robotics has started to sell to the market, mainly through leasing to purchase and repurchasing from old customers. As for agency construction, since the establishment of Phoenix Zhituo two months ago, Country Garden has added four new projects, including Qinhuangdao, Luoyang, Shangqiu, and Yancheng, on the basis of existing projects, continuously cultivating new business growth points.
Yang Huiyan also stated that while emphasizing the importance of delivery and operation, she must adhere to the medium- and long-term development plan of the &#34;two wings&#34;. This has been regarded as the focus of her work since taking the helm.
Yang Guoqiang and Mo Bin made a rare public appearance in October to inspect one of the &#34;two wings&#34; businesses, the technology construction business.
Times change, and the tides rise and fall. Including Country Garden, Vanke, Longfor, and Poly, the leading real estate companies are all struggling to survive, heading towards different destinies.
Currently, Evergrande has fallen from grace, and Xu Jiayin and others have been taken away; Sunac has recently completed a comprehensive debt restructuring and is striving to return to normal operations; Vanke's leader, Yu Liang, is fighting back against short-selling and seeking assistance from state-owned shareholders such as Shenzhen Metro; Longfor is constantly rearranging its business and funds to cope with the increasingly difficult situation; state-owned enterprises such as Poly and China Merchants have also launched a round of promotions at the end of the year in order to quickly recover funds.
As Anxin Securities' chief economist Gao Shanwen said, the real estate market is already over-adjusted, but no one knows when the bottom will come. Wang Shi, the founder of Vanke, believes that the real estate market needs a 3-5 year adjustment period.
In any case, people have already recognized that the golden age of blindly rushing into real estate is gone. Anyone and any company in the future will have to live frugally, and this is probably the new normal.
This is a new era. Country Garden and the Yang family can only adapt and give it their all.

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The Yang family is determined to support Country Garden and the company is striving to become a model for troubled enterprises. Country Garden is currently in discussions with creditors on a debt restructuring plan, hoping to gain some breathing space. The Yang family has already supported Country Garden with approximately HKD 41 billion and has not reduced their holdings of the company's stocks. Yang Huiyan stated that the family is willing to go all out to support the company, demonstrating their determination to save it. As the controlling shareholder, the Yang family has provided a USD 300 million interest-free loan. While Country Garden is facing challenges, the founder's credibility and determination will determine its future. Yang Huiyan is working hard to give the market and investors more confidence.

The Yang family will spare no effort to support COUNTRY GARDEN