original title "Fengcai News | The outgoing "tiger" has been caught one after another. Who is taking away the empty food from Joy City? 》
Produced | Phoenix Net Fengcaixun fengcaixun author | Wang Tingting
After being frequently investigated by the Discipline Inspection Commission, the truth about the "retrograde development" of COFCO Joy City Holdings seems to have finally been revealed.
In January 2024, Cao Ronggen, Party Secretary and General Manager of Joy City, was suspected of serious violations of discipline and law and has voluntarily surrendered. He is currently undergoing disciplinary review and supervisory investigation by the Discipline Inspection and Supervision Team of COFCO and the Supervisory Committee of Puyang City, Henan Province.
This is only the second climax of the "series", because before this, many core executives of Joy City Holdings were investigated by the Discipline Inspection Commission one after another.
In May 2023, Zhu Shu, a senior expert at the Commercial Management Center of Joy City Holdings, was exposed as being suspected of serious violations of disciplines and laws, and was subject to review and supervisory investigation by the Discipline Inspection Commission.
Earlier, in September 2021, the deputy general manager of Joy City Holdings Shandong Regional Company Zhao Liang was suspected of serious violations of disciplines and laws and was subject to review and supervisory investigation;
In December 2019, the deputy general manager of Joy City Holdings Southwest Regional Company, Jinyun project general manager Lang Gang was suspected of serious violations of laws and regulations and was subject to supervisory investigation;
In June 2018, Xiong Qizhong, the former general manager of COFCO Land (now Joy City Holdings) Chengdu Company Xiong Qizhong was "double opened" on suspicion of serious violations of disciplines and laws and was accepted. Disciplinary review and supervisory investigation, and was transferred to judicial authorities...
Coincidentally, the above-mentioned executives were all subordinates of Zhou Zheng when he was in charge of COFCO Joy City Holdings. Official information from
shows that Zhou Zheng served as the general manager of COFCO Real Estate in 2008, the chairman in 2010, and the chairman of Joy City Real Estate Co., Ltd. in 2013. He submitted his resignation on March 15, 2021.
Within half a year after Zhou Zheng left, Joy City Holdings’ directors Jiang Yong, assistant general manager Zhou Peng, deputy general manager Li Jinyang, chief accountant (financial director) Zhang Jianguo and other senior executives resigned one after another.
Two years after his resignation, In November 2023, Zhou Zheng accepted the disciplinary review and supervisory investigation of by the Central Commission for Discipline Inspection and the National Supervisory Committee because of suspected serious violations of disciplines and laws.
carefully reviewed the development of Joy City in recent years, and found that there are indeed many "puzzling" things. With the in-depth investigation and the disclosure of details, the truth behind the doubts will soon come to light.
Ning Gaoning named "Joy City"
COFCO's real estate cornucopia
"Those who are near are happy, and those who are far away are attracted." One night, it is said that when Ning Gaoning was reading "The Analects of Confucius", he suddenly had an idea and listed COFCO's real estate. The commercial real estate brand is named "Joy City".
At that time, Ning Gaoning was airborne to COFCO Group for less than a year, but he had already made a name for himself at China Resources, saving Yongdali, investing in Vanke, acquiring Huayuan, and building Vientiane City... These are all the things Ning Gaoning did during his time at China Resources. China Resources' record also vaguely reveals his "ambition" after moving to COFCO.
In 2004, at the age of 46, Ning Gaoning landed at COFCO. He faced a large comprehensive trading company with more than 50 dispersed business units, and COFCO was one of the first 16 real estate-based companies identified by the State-owned Assets Supervision and Administration Commission. As one of the main central enterprises, controls high-quality assets in many important cities across the country.
"With COFCO's own background and financial foundation, it has great potential to engage in real estate business." Ning Gaoning emphasized at COFCO's internal meetings many times.
Therefore, in his first year at COFCO, Ning Gaoning "drawn a circle." Clarify the structure, while consolidating the grain and oil trading business, expand the real estate business, and at the same time promote the creation of the "Joy City" brand.
Since the first shopping mall "Xidan Joy City" opened in Beijing in 2007, since then in cities such as Beijing, Shanghai, Guangzhou and Shenzhen, relying on the advantages of COFCO, Joy City has rapidly developed into a commercial landmark in the city.
At that time, Joy City was still just a shopping mall brand, and the company name was COFCO Land. In 2014, COFCO Land borrowed money from Parkview Enterprises and listed on the Hong Kong stock market. A year later, the name of the H-share was directly changed to "Joy City Real Estate" (00207 hk), further highlighting the Joy City brand and weakening the word COFCO.
Ning Gaoning even planned "to build 100 Joy City" , which shows that he attaches great importance to this new brand.
However, until Ning Gaoning resigned from COFCO in 2015, he was unable to fulfill this wish. Another unfinished task is the reorganization of COFCO's real estate business.
This has also become an important task for his successor Zhou Zheng.
Comprehensive restructuring during the Zhou Zheng period
Weakened COFCO’s strong promotion of Joy City
Zhou Zheng was born in 1963 and graduated from Nanchang Hangkong University. In the 1990s, he crossed over from the aviation field to COFCO. He is an old COFCO man and was once Ning Gaoning’s employee. subordinate. Therefore, when Zhou Zheng took over in 2010, he was very clear about the direction of COFCO Real Estate's restructuring planning.
In fact, COFCO’s real estate sector was quite confusing at the time. It was called “COFCO Real Estate” in the A-share market (renamed “Joy City Holdings” 000031sz in 2019), “Joy City Real Estate” in the Hong Kong stock market, and was called “Joy City Real Estate” within COFCO. It is collectively called "COFCO Land", and the commercial street business was originally called "COFCO Industrial" separately.
"We used to do a promotion called COFCO Real Estate and Hotel Business Promotion Conference, but it didn't have a name. Because I didn't know what it was called. Especially two listed companies, it also involves the issue of independence between them, so we can't talk nonsense."
Zhou Zheng once told "China Entrepreneur Magazine" bluntly stated that for a state-owned enterprise to appear in the market as two listed companies, it gave the market a bad image. The reorganization of
is imperative. Zhou Zheng was concurrently the chairman of COFCO Real Estate and the chairman of Joy City Holdings at the time. “Because of the concurrent positions, we actually relied on us to match up, promote, communicate and coordinate the resource team system in these years.”
COFCO July 24, 2017 Real estate was suspended due to major asset reorganization until 2019, when the integration plan was passed. As marked by the official renaming of "COFCO Real Estate" to "Joy City Holdings" in March of that year, COFCO Joy City's reorganization ushered in the dawn of victory.
This process took Zhou Zheng a lot of energy, but the result is that he is quite satisfied, "We have been relatively successful among central enterprises."
So far, COFCO’s real estate business has further stripped away the word COFCO and completely labeled it “Joy City”.
"Why not use the group's name?" This has also been a topic of debate within COFCO for a long time. According to the above-mentioned media reports, the disagreement among the senior leaders at that time was to "retain the name 'COFCO' and have a big tree behind it to enjoy the shade. If not, it will be completely exposed to the market and the risk is very high." So in the end the team management and shareholders meeting It was unanimously agreed that the development strategy of Joy City urban complex should be established as the main brand, operation and equity should be separated, and strategic investment should be introduced in the future.
Development has stagnated after the reorganization
Four major doubts about Joy City
However, after the reorganization, COFCO Real Estate’s business, which was fully presented as “Joy City”, did not usher in the planned vigorous development.
The share price of Joy City Holdings (000031.sz) has been falling continuously for more than 7 years since mid-2015; the share price of Joy City Real Estate (00207 hk) has also been falling continuously since 2013.
At the operating level, Joy City Holdings’ net profit has continued to decline since 2018, and it turned from profit to loss by the end of 2022. The company’s net profit loss that year was 2.223 billion yuan . The company's operating income has also declined, with total revenue in 2022 reaching 39.579 billion yuan, a drop of more than 3 billion in one year.
Not only that, Phoenix Finance News noticed that among the net profits of Joy City Holdings, the net profits attributed to the parent company turned from profit to loss, with a loss of 2.883 billion yuan by the end of 2022; the net profits attributed to minority shareholders increased to 6.6 billion.
Moreover, the situation of "major shareholders losing money and minority shareholders making money" has existed since 2020. Even in 2020, when Joy City suffered a loss in net profit attributable to the parent company, minority shareholders gained as much as 1.5 billion yuan.
In fact, before COFCO Real Estate and Joy City completed the reorganization in 2019 and in the year of the merger, the company was still in a normal state, and the net profit attributable to the parent company was higher than the profit and loss of minority shareholders. This can't help but make the outside world wonder, "Who will the profits of the reorganized Joy City go to?"
The doubts don't stop there.
The second is like the development rhythm. According to the 2022 annual report of Joy City Holdings, the company’s salable value is as high as approximately 190.5 billion yuan, which does not include land bank projects such as primary development and renovation, and is distributed in Beijing-Tianjin-Hebei, the Yangtze River Delta, the middle reaches of the Yangtze River, Guangdong, Hong Kong and Macao Core urban areas such as the Greater Bay Area and Chengdu-Chongqing.
As of the end of 2022, Joy City's land reserve is 15.2272 million square meters, with a total construction area of 32.707 million square meters, and the remaining developable construction area (capacity construction area - cumulative completed area) is 13.1469 million square meters.
Joy City obviously has so many high-quality goods in core cities, why is it so difficult to say that the development pace is decisive?
And what is dramatic is that the development of some projects cannot wait. For example, according to media reports, in September 2020, in Jinan COFCO’s Joy City project, some buildings were built two or three stories high, and they did not even have scaffolding to apply for a pre-sale permit. In the end, the project was fined 36,400 yuan and had its credit rating lowered for defrauding "pre-sale certificates" with fake materials.
The third is like selling assets. In 2022, Joy City's full-scale sales business contracted 56.8 billion yuan, a year-on-year decrease of 22%, and the contracted area was 2.27 million square meters, a year-on-year decrease of 21%. The company explained in the announcement that due to optimizing inventory and promotion strategies, accelerating sales and asset turnover, the sales prices of some projects did not meet expectations.
However, the fairness of prices during some inventory optimizations is questionable. In particular, Joy City’s “low-price sales” of core projects in core cities have caused controversy.
Phoenix Finance News noticed that COFCO Seaview One, which completed the equity transfer in July 2023, was transferred at a reserve price of 4.142 billion yuan, corresponding to about 50,000 square meters of salable area in the three buildings of Nos. 5, 6 and 7, equivalent to The unit price is about 84,000/square meter.
This price is far lower than the current average second-hand price of 293,850 yuan/square meter for projects on Beike.com. In fact, two months after the transfer, news came out in the market that the acquirer was selling the Shanghai COFCO Seaview No. 1 house in bulk, with a quoted price of 158,600-369,300 per square meter, an instant increase.
In addition, industry insiders revealed that Joy City has always used an industrial land acquisition strategy. In recent years, even central enterprises have found it difficult to acquire land from local governments in the name of industry.
can see that Joy City Holdings disclosed only 8 new land acquisitions in 2022, with a land area of 350,000 square meters and a gross floor area of 790,000 square meters, mainly located in Chongqing, Chengdu, Nanjing, Hangzhou, Suzhou, Beijing, Xi'an and other places.
is neither developed nor increased quickly. How does Joy City develop subsequent sales of , and how does it counterattack? This also casts a layer of fog on the company's subsequent development trend.
By 2022, Joy City will have only 29 projects in operation (including light assets and non-standardized products); it holds 2 light asset management projects for office buildings, 11 industrial real estate projects in operation, 6 operating hotels, and a chief operating officer. There are 11 stores for renting apartments.
This is still far from the "100 Joy Cities" proposed by Ning Gaoning ten years ago; it is also far from the "achieving sales of over 100 billion within three years" proposed by Zhou Zheng in 2019.
Cao Ronggen, who performed the duties of chairman after Zhou Zheng resigned, is now under investigation; You Wei, who succeeded Zhou Zheng as chairman, joined the company in March 2021 and left in September 2022, with only one year of transition.
Chen Lang, currently the chairman of Joy City Real Estate, is a non-executive director of the company. It is still questionable how much change he will bring to Joy City.
Who would have thought that Poly Development, China Overseas Real Estate, China Resources Land, etc., which are also state-owned enterprises, have completed breakthroughs from tens of billions to hundreds of billions in the past ten years, and now their rankings have risen.
However, more than ten years have passed. As the only real estate investment and management platform of COFCO Group, Joy City, which houses COFCO’s many high-quality real estate and commercial assets, has not been able to achieve its goal of "100 buildings" or "100 billion". It has never been realized.
In today’s situation, whose problem is it? Perhaps now it’s more important to ask, “Who can solve the problem?”
