MBA毕业论文英文版.doc

Statement Analysis of China Vanke Co.,Title: Statement Analysis of China Vanke Co.,Name: Antonio HuangSupervisor: Lin Jiang, Lixin WangABSTRACTThe final thesis of Statement Analysis of China Vanke Co., compiled in case style, includes two parts of case body and case analysis. The detailed content in case body comprises the retrospect of Vanke development and its external circumstance and business strategy introduction. Basing on these introductions, some topics will have been unveiled and highlighted in following analysis. With the assistant of analysis of cash flow, earning capability and perspective, the case analysis is intended to figure out the underlying motivation of its strategy, evaluate the efficiency and suitability of its strategy, forecast risks existing possibly, and also, some corresponding advices will be delieved.As for the analysis methods, the general connection and implementation of horizontal and vertical comparison is contributive in terms of final analysis, Moreover, the comprehensive analysis of macro economy, real estate industry and Vankes strategy is also one of advantages of this case study. The main questions this case analysis focusing include why and where Vanke should quit, what is the real prospect of its expanding strategy and whether the cash flow will be the bottleneck of its ambitious expansion. The detailed analysis about these questions will be available in Chapter 6,7,8 respectively. Key words: Statement Analysis, Strategy, Earning Capability, and Cash FlowContentsChapter 1、Retrospect of Vanke41.1 Vankes Initial Expanding41.2 Vankes Busisness Contraction41.3 Vankes Specilized Expanding71.4 Vankes Puzzle in the Future Deveelopment91.5 Retrospect of Vanke in Capital Market101.5.1 Vankes Memorabilia in Capital Market101.5.2 Vankes Capital Structure111.5.3 Vankes Performance in Stock Market12Chapter 2、Vankes External Surrounding132.1 General Situation of Real Estate Market132.2 Current Condition of Residence Market152.3 Macro Influencing Factors of Vanke152.3.1 WTO and Further Opening Up Policy152.3.2 Wide-scare Implementation of Citilization172.3.3 West China Developing Policy172.4 Micro Influencing Factor of Vanke182.4.1 Changes of Land Transforming Policies182.4.2 Changes of Presales and Loan182.4.3 Opening Up of Domestical Capital Market192.4.4 Implementation of Housing Distribution Policy192.4.5 Implementaion of Economic Housing Policy192.4.6 Other Related Policies202.5 Major Competitors of Vanke in Real Estate Market202.5.1 Local Real Estate Developer212.5.2 The Real Estate Developer with Overseas Capital Backgroud222.5.3 Potential Competitors24Chapter 3、Vankes Business Strategy243.1 Specilization and Brand Strategy253.2 Constraction and Investment Quit Strategy263.3 Expansion and Capital Extension Strategy27Chapter 4、Major Focuses and Premises of the Analysis294.1 Major Foucuses of the Case Study294.1.1 Why and Where Vanke Will Quit294.1.2 What the Real Prospect of Vankes Expansion304.1.3 Whether the Cash Flow is the Bottleneck in Vankes Expansion304.2 Time Sample Of the Case Analysis314.3 Competitors Sample of the Case Analysis324.4 Business Sample of the Case Analysis33Chapter 5、Analysis of Earning in Vankes Contraction345.1 About Motivation of Vankes Contraction Strategy345.2 About Equity Earning Index355.3 Major Business Earning Analysis375.4 Underlying Reasons of Vankes Constraction40Chapter 6、Analysis of Growth in Vankes Expansion416.1 Qualitative Analysis of Growth in Vankes Expansion416.2 Quantitative Analysis of Growth in Vankes Expansion426.3 Forecasting Analysis of Growth in Vankes Expansion44Chapter 7、Analysis of Cash Flow in Vankes Expansion467.1 Current Condition of Cash Flow in Vankes Expansion467.2 Analysis of Cash Flow Plan in Vankes Expansion477.3 Analysis of Debt Payback in Vankes Expansion497.4 Capital Force is Essential Approach in Vankes Expansion50Closing Remark52Notation53Reference53Appendix54Postscript55Issued Article During MBA Education55Chapter 1、Retrospect of Vanke1.1 Vankes Initial ExpandingThe story of Vanke could be described from 1984.In 1984, Vanke was set up in Shengzhen and was named “Shengzhen Modern Teaching Facility Exibition Center”, which is located in the second floor of an old building. But it seemsd the business of that time is much wider than teaching facilities, so, the company was renamed as “Shengzhen Modern Corporate” in 1986. At that time, the management team was dreaming to build Trading Kindom. Also in this old building, Vanke was reconstructed and turned into a listed company in 1988. Meanwhile, the name was entitled as the “China Vanke Co., Ltd” In 1989, with the cash inflow of 28.09 million RMB through IPO, Vanke began its business expanding in diverse area. Till the end of 1991, Vankes business had comprised Inport, Export, Industry, Real estate and Culture Distribution, total 13 specific business branches. As for their business dirction, Vanke was intended to be a group with diverse business area. One of most important thing during this period is that Vanke enter real estate business in November 1988, which has been proved to be a decisive strategy transformation later. Before the end of 1993, Vanke continued its business diversification. The reasons why Vanke choose its diversification strategy mainly come from the pressure of capital especially after being a public company.Talking about the initial business expansion, Mr. Wang, President of Vanke, said: intitial business expansion had aroused certain cost for Vanke, just like the many othere companies at that time, Vanke choosed almost every business chances as long as its profitable, which has causing the resource limitation, high managerial cost and many other problems correspondingly.1.2 Vankes Busisness ContractionIn 1993, Vankes business strategy was adjusted oppositively.During the meeting in Shanghai, 1993, Vankes managerial team retrospected and summarized their past business experience, and decided to focus its core business on urban residence development, and give up its diversification strategy accordingly.The definite measures mainly comprised that: Vanke transferred its business from diverse areas to real estate industry, and its equity in over 30 companies had been transferred from that time. Meanwhile, in its real estate business, Vanke concentrated its resource on urban residence development. And also, Vanke adjusted its business regions from 13 cities nationwide to 4 biggest cities including Beijing, Tianjing, Shanghai and Shengzhen.That means, the contraction strategy of Vanke included not only its business specialization but also regional market focus. Several activities of its stragtegy adjustment comprised the sales of several subsidiaries unrelated with its core business of real estate. Different from other companies, Vanke saled its noncore business when they are all profitable. For example, the loudspeaker factory saled in 1997, had 40% market share of domestic market and had good business relationship with key clients such as TCL and KONIC. Cestbon was another brand saled by Vanke, which was bought in the end of 80s. With three years of development, Cestbon had become the one of biggest suppliers of distilled water in South China. Considering the long term development of the whole group, however, Vanke decided to sell it outIn 2001, Vanke sold Vanjia Department Store to Huarun Group, its biggest shareholder, with the sales price of 0.46 billion RMB. Vanke declared that it had decided to quit from the retail industry.After the sales of Cestbon, Vanjia and other noncore business, Mr. Wang said, Vankes specialization adjustment was finished after several years, and Vanke had turned out to be one specialized real estate developer. Looking back to review Vankes strategy trasformation, there are several affairs facilitating this process.In April 1993, China Vanke issued its B share in Hong Koong stock market successfully. From this issue, Vake not only finance more than 400 million RMB, but also experience a instructive education. The investors of B share are mainly from Mutual Fund. The people of Vanke are very jauty when they talk about their business in 13 areas, which are all profitable. But it seemed the managers of Mutual Fund are not very attracted, and their first question is what is the core business of Vanke. The reason is very obvious: If we bought the stocks of KONIC, which means I invested in the Color TV industry; if we bought the stocks of FYADA, which means the investment in horologe industry. But it is not clear which industry had been invested if we bought the stocks of Vanke. Vanke had a electronic business which is biggest in Mainland China in terms of its scale, and its net income had amounted to more than 10 million RMB. Vanke are very happy with this business because the return ratio of investment is pretty good. But the managers of Mutual Fund said they are not interested in this business because the absolute business scale is small and the future business scale will not be very large even if its increasement ratio is rather high. Meanwhile, they added that: If we decided to invest in Vanke, the intention is not investing in one of your projects but investiong in one company. Diversification is the major task of Mutual Fund, not the business of Vanke. We even regard your business is highly risky because Vanke had no significant competitive advantages in your business areas. In 1994, the major investors of Vanke had lauched the dispute between Vanke and they claimed to reconstruct the Board of Director with the reasons that Vanke had no competitive core business and the managerial team can not perform well in the past operation. They rasied the questions continuously about what is core competency and core business of Vanke. The equity investment in several industries can not create the core competency and its own business are so diverse and had not formed the substantial competitive advantages yet. The only business with some advantages is the real estate business, but the scale was still very small and the advantage was very weak, which can not be supposed to bring big investment return for Vankes investors. So, the major investors recommended that Vanke should reconstruct its business structure, formulate the core business and quit some business area such as industry, trading or equity investment correspondingly. Real estate business and culture development business is recommended to be focused in the core business formulation considering their relatively high market reputation. In sum, this dispute between China Vanke and major investors had remind the management of Vanke again, that is, it was the time for Vanke to reconstruct its business.A short time later, Vanke confirm the real estate business as its core business and start its contraction strategy. Till now, it is not difficult for us to understand the underlying reasons of Vankes strategy adjustment. As Mr. Wang said, Vanke decided to constract its business, but actually it is intended to acculmulate the energy and focus the resource for further business expansion.1.3 Vankes Specilized ExpandingTill the end of 2001, Vanke had sold out its share of Vanjia Department Store, which means the constraction strategy of 8 years has decleared a pause and Vanke has become the real specialized real-estate developer in Mainland China. At the same time, Vanke accelerate its expansion in real estate industry. In 2001, besides its bigger investment in orginal market including Shanghai, Beijing, Shengzhen, etc, Vanke had entered the new 4 cities such as Nanjing, Changchu and Nanchang as well. The market investigation indicated that the market share of Vanke has achieved 0.88 national wide and amounted to 4.05 and 8.48 in Shengzhen and Shenyang respectively. Additionally, Vankes land reservation had enlarged dramatically in the past one year. Till the end of 2001, the number of Vankes land reservation had exceed 9.8 million square meters, which has established the solid foundamentation for the further business expansion.Something deserving our attention, Mr. Wang said, even though the business performance of Vanke in 2001 is very remarkable (with annual net income of 373 million RMB, with EPS of 0.592 RMB and land reservation great incresement), the real increasement of Vanke will be in 2002. Definitely speaking, Vanke is intending to expand its real estate business to more than 20 cities in the new year.On January 21, 2002, The headquarter of Vanke transferred from Shuibei Road 27 to the new building, Vanke Architecture Research Center located in Meiling Road 63. In the press conference of business demonstration in Feburary 2002, Mr Wang declared that the name of Vankes stock will renamed from “Shenzhen Vanke” to “Vanke”. Thus, Vanke will enter the accelerated develping stage and will promote its market position in real estate industry and further promote its brand image national wide, with the external support from ventual capital and gold chance after the WTO entry.In the new year, Vanke will ignore the “Shengzhen” from its name, which foretell the great strategic adjustment of Vake and also reflect the real current condition of Vankes development.The new year of 2002 has been regarded as the first developing point after its strategic adjustment. Vankes plan of 2002 is that: the projects under construction will achieve 21 and the markets will achieve 20. the business strategy will remain focusing on the middle and high level residences located between urban and rural areas. Totally, the construction area is to be more than 1.62 million square meters, finished area is to achieve to 1.14 million square meters and sold area is to exceed 1 million square meters. Meanwhile, the reserved land area is supposed to achieve 15 to 18 million square meters. In sum, the new-round expanding strategy of Vanke has been started up now. At the same time, Vanke has raised its five-year business plan with the specific contenr of “Double 15”, that is, until the end of 2005, Vnkes net income is supposed to reach 1.5 billion RMB, the ROE is supposed to reach 15. Moreover, Vanke has taken 44 cities in Mainland China with the urban population of more than 1 million as its target market, and Vanke has planed to enter above 44 cities within the next 5 years.To achieve that two goals, Vake has planned to take some reforms in terms of its business process, managerial system, information flow or even the motivation policies of HR correspondingly, in order to adapt to the changing surroundings. These reform is expected to comprise the organizational structure reconstruction, business processs adjustment, information flow sys redesign and other managerial sys reforms as well. Meanwile, Vanke will take full advantage of the internet to facilitate the building of three headquarters in the near future, which is supposed to solve the serial problems such as the difference of diverse markets, puzzle of service radius, cost control, business innovation and so on, so as to optimize the allocation of internal resource and maximize the synergy effects of Vanke.1.4 Vankes Puzzle in the Future DeveelopmentMany things had indicated that Vanke is intended to expand its real estate business and corresponding measures have been implemented. Vanke will expand its business to cities with the population of more than 1 million, and the core business will still focus on residence development.It seemed that everything is under control. Vankes businss performance kept increasing steadily in the near several years with the increasement ratio of revenuve, net income being 17.74% and 25.99% respectively in 2001. Till the end of 2001, the reserved land had amount to more than 9 million square meter, and the business had expanded to more than 10 cities. As for the internal management, the implementation of new motivation sys of HR, the construction and operation of website building and purchase on line, the optimization of project management sys and other reforming policies has contributed a lot to the advance of Vankes business. The external appraisement from local and foreign media for Vanke is also high, the s ranking of local listed real estate companies has unveiled that Vanke is listed as the No. 1. Meanwhile, in 2000 and 2001, Vanke was entitled as the one of 300 top small and middle enterprises sponsored by , one of most famous managerial magazine of USA. In 2001, Vanke was also entitled as one of top 6 respected listed companies in Mainland China by the famos auditing company, PWC.However, there are many difficulties existed during the development of Vanke, especially the internal managerial problems and external market challenges encountered by Vanke in the reforming period, which still deserve the attention of managerial team of Vanke, investors and related analysts.Analysts related think that, there are major two challenges during the Vankes development. One challenge is coming from the competitors of Vanke, for example, the real estate developers from Hong Kong, they had shown their interest in real estate market in Mainland China. These giant will be very very strong compared with local real estate companies thanks to their capital power, their business experience and mature managerial sys. How to expand the business one step further and enlarge the market share continuously is the urgent problems that Vanke will encounter and should solve. The other challenge is coming from Vankes internal management, which means Vanke should find the solution to various managerial problems when the business is being expanded larger and la