A Case Study Of Poly Real Estate’s Transformation To Asset-light Operation Mode

Since the marketization reform in 1998,Chinese real estate enterprises have been adopting the traditional asset-heavy operation mode.Asset-heavy operation mainly obtains income through land appreciation,which makes the real estate industry achieve rapid development in the 1990 s when the land cost is low.During this golden period of rapid development of the industry,many real estate enterprises obtained super profits by reserving a large amount of land,developing and selling it.Since 2010,with the changes of national policies and economic situation,competition in the real estate market has become increasingly fierce.Meanwhile,it is also faced with problems such as rising land costs and financing difficulties.The growth rate of the industry has gradually begun to decline,and many problems brought by asset-heavy operation have become increasingly apparent.At this time,some real estate enterprises chose to quit,and some real estate enterprises,such as Poly Real Estate and Vanke,began to transform into asset-light operation mode,and achieved good results.By adopting the asset-light operation mode,enterprises can invest their own resources into the part of the industrial chain with higher economic added value,which is conducive to improving the market competitiveness of enterprises and alleviating the problems such as capital precipitation and slow inventory turnover brought by the asset-heavy operation mode.By combining theoretical discussion with typical case analysis,this thesis mainly explores the motivation,feasibility,measures and transformation effect of Poly Real Estate’s transformation into an asset-light operation mode,which is conducive to providing reference for other real estate enterprises that want to transform.This thesis first introduces the definition of relevant concepts,and then compares and analyzes the characteristics,advantages and disadvantages and applicable conditions of the asset-light and asset-heavy operation mode adopted by real estate enterprises.Then,it simply analyzes the reasons for the transformation of the asset-light operation mode adopted by real estate enterprises,and introduces the relevant theoretical basis applied in this thesis.In the part of case analysis,the background of Poly Real Estate is briefly introduced first,and then the reasons,feasibility and specific measures of Poly Real Estate’s transformation into asset-light operation mode are analyzed.Out of the needs of financing strategy transformation,mitigation of business risks,revitalizing stock assets and seeking innovative profit mode,etc.,Poly Real Estate has gradually shifted to an asset-light operation model since 2012.Specific strategies include:Actively explore financing channels,use the credit insurance fund,rental housing REITs and other real estate financial business,at the same time,Poly hotel and other commercial real estate operations,through the construction of the trinity pension model layout pension industry,community O2 O to develop community consumption service business,and foreign cooperation development and brand export business.This thesis analyzes the effect of the transformation of Poly Real Estate’s asset-light operation mode based on financial and non-financial indicators.From the perspective of financial indicators,the debt paying ability of Poly Real Estate remains relatively high,the asset operation efficiency and profitability show a steady rising trend,the company has a promising development prospect,and the overall financial performance is good.From the perspective of non-financial indicators,after the transformation of asset-light operation mode,Poly Real Estate not only expands its market share,builds brand effect,improves product and service quality and establishes professional system,but also changes its profit growth point.Finally,this thesis concludes that the asset-light operation significantly improves the financing ability of Poly Real Estate and reduces its overall risk.The diversified profit model also makes Poly Real Estate more competitive in the market.In the current industry environment,it is undoubtedly a more rational choice for real estate enterprises to choose to transform into asset-light enterprises.By introducing the transformation process and experience of Poly Real Estate,this thesis can bring some enlightenment for the development of other real estate enterprises.When choosing transformation,real estate enterprises need to fully consider their own conditions and choose appropriate transformation methods;During the transformation,attention should also be paid to adjusting the income structure and asset structure,and gradually shifting the company’s main business from real estate development to operation and service.Meanwhile,attention should also be paid to the integration of resources in the value chain and the export of external brands.Finally,real estate finance should be used to control risks during the transformation,so as to achieve the success of the transformation.