The annual salary of the four directors of Country Garden is reduced to 120,000, and the resources are concentrated to ensure delivery.

Country Garden said that the company is actively taking self-help measures, trying its best to increase revenue and reduce expenditure, and concentrate resources to ensure delivery.

Reduce expenses: the annual salary of the four directors is reduced to 120,000 yuan, and the administrative expenses are reduced by 60%.

On December 12th, Country Garden Holdings Limited announced that the directors’ salary was adjusted.

According to the announcement, in combination with the actual business needs of the industry and the company, Ms. Yang Huiyan, Mr. Mo Bin, Ms. Yang Ziying, executive directors of Country Garden, and Mr. Chen Nai, non-executive directors, offered to reduce their salaries, and signed a supplementary agreement and a supplementary letter of appointment with the company on November 1, 2023, which will be the latest annual salary adjustment for directors as follows (adopted by the board of directors of the company on the date of this announcement and effective on November 1, 2023): Yang Huiyan will be adjusted from 370,000 yuan to. Mo Bin was adjusted from 3 million yuan to 120,000 yuan; Yang Ziying was adjusted from 2 million yuan to 120,000 yuan; Chen Tai was adjusted from 370,000 yuan to 120,000 yuan.

It is understood that Country Garden has made several adjustments to executive compensation in the past two years.By 2023, executive compensation will drop by 86% compared with 2021.These executives include the vice president of the company headquarters, the general manager of the functional center and above, and the regional president.

According to Country Garden’s official micro-display, the whole group tried its best to reduce administrative expenses, all of which were based on the principle of zero, and unnecessary expenses were not spent. Rigid expenses were reduced as much as possible through integration and intensification. In 2023, administrative expenses were significantly reduced by nearly 60% compared with 2021.

At present, Country Garden has cancelled all senior executives’ car allocation. When there is a real need for work, it can achieve intensive vehicle cost control and cost reduction by applying for official car allocation or using its own car. For all group buses including the former senior executives’ car allocation, assets are revitalized through internal public bidding and foreign workers’ debt repayment. In addition, including the reimbursement of senior executives’ medical examinations and the free canteen for senior executives, etc. have also been cancelled.

Streamlining organizational structure: 14 to 7

Recently, Country Garden has adjusted its organizational structure and merged 14 regional companies into 7 new regions: Hebei and Beijing merged into North China; Shandong and northern Jiangsu merged into Lusu region, northwest and Shaanxi merged into central and western regions, Anhui and Zhejiang merged into Zhejiang-Anhui region, Jiangxi and Fujian merged into Jiangxi-Fujian region, Yunnan and Sichuan merged into Sichuan-Yunnan region, and Guangxi and Jiangzhong merged into Jiangzhong region.

In this regard, Country Garden said that under the current industry situation, this adjustment is aimed at further improving the adaptability between the organization and the business, promoting flat and efficient management, complementing the available resources, and doing their best to ensure the realization of the strategic goal of "guaranteeing delivery".

Yang Huiyan said at the management meeting that the overall organizational structure of the company has reached a relatively stable stage after certain adjustments at the group headquarters and regional project level. What we need to do next is to lock in outstanding talents, adhere to the open and transparent mechanism of selecting and employing people and cultivating talents, and better improve the short, medium and long-term salary and incentive mechanism.

Guaranteed delivery: It is estimated that the delivery will exceed 400,000 sets next year.

Country Garden said that ensuring delivery is the company’s vital corporate responsibility and the safety bottom line of the property market.

According to public information, in 2022, Country Garden Group and its joint ventures and affiliated companies delivered nearly 700,000 houses, ranking first in the industry in terms of delivery volume. In the first 11 months of 2023, the Group has delivered more than 500,000 houses with a total delivery area of 60.43 million square meters, involving 240 cities in 31 provinces (municipalities and autonomous regions), and the delivery volume once again ranks first in the industry.

At the management meeting of Country Garden Group in December, Yang Huiyan pointed out that in the next 12 months, the delivery challenge will enter the deep water area.The delivery volume of Country Garden is expected to exceed 400,000 sets in 2024.The number is still huge. "Guaranteeing delivery is a very difficult but also very important task. I hope that everyone will be ready, attach great importance to it and do a good job in pre-planning."

Open source: "selling hematopoiesis"+"two wings" business

At Country Garden Group Management Meeting in December, Yang Huiyan, Chairman of the Board of Directors of the Group, said:"The family will definitely support the company by selling iron, and the company will strive to explore an effective path to resume normal operations as soon as possible."

It is reported that, as the controlling shareholder, Yang Huiyan family has supported a total of about HK$ 41 billion by borrowing money, increasing stock holdings, purchasing bonds, and paying interest by shares. Among them, HK$ 1.56 billion interest-free unsecured loans were provided to the Group in 2021, and HK$ 5.05 billion was raised in December 2022 for interest-free unsecured loans to the Group.

(1) Promote sales and realize hematopoiesis.

Recently, the management and financial department of Country Garden Group conducted a sensitivity simulation analysis of the extreme situation that the company may face in its operation. Yang Huiyan said: "Under conservative calculation, as long as our inventory assets are sold normally, Country Garden will continue to maintain positive assets in the next decade even assuming that we don’t buy land, there is no tax reduction, and the new contribution of the two wings is not considered."

Mo Bin, president of Country Garden, said that what Country Garden is doing now is mainly hemostasis and blood transfusion. At the same time, it is necessary to cultivate internal strength, get through difficult times, and strive to increase sales and realize hematopoiesis, so that enterprises can truly return to the track of healthy development. In addition, Mo Bin stressed that in order to realize sales hematopoiesis, first, we should grasp the key sales nodes in December, increase the renovation of existing buildings, mobilize national marketing, strive to break through special revitalization and promote the return of cash. Second, we should pay close attention to the payment at the end of the year and do a good job in collecting overdue receivables at the end of the year. At the same time, it is necessary to plan the work of returning home during the Spring Festival in advance, and the returning areas should make full preparations in advance to prepare for a good start in supply and sales arrangements.

However, the current sales situation of Country Garden is still not optimistic.From January to November, 2023, the cumulative sales of Country Garden was 212.45 billion yuan, down 52% year-on-year, which was the largest year-on-year decline among the TOP30 housing enterprises. In addition, the monthly sales of Country Garden are still in a downward trend: since July this year, the sales of Country Garden have dropped sharply, of which the contracted sales in June was 16 billion yuan, which fell to 12.07 billion yuan in July, 7.98 billion yuan in August and 6.17 billion yuan in September respectively. In October, the sales volume was 6.31 billion yuan, compared with the previous month, but the latest data showed that the sales volume showed a downward trend again, and the sales volume in November was 6.11 billion yuan.

(2) Cultivate new business growth points

In addition to the real estate sector business, Country Garden is also making efforts in technology construction and escrow construction. It is reported that since June this year, Bozhilin robot under Country Garden has started to sell to the market. At present, it is mainly leased to buy and repurchased by old customers. In terms of agency construction, Phoenix Zhituo has added four new projects, including Qinhuangdao in Hebei, Luoyang in Henan, Shangqiu in Henan and Yancheng in Jiangsu, on the basis of the original projects since its establishment two months ago. Country Garden said that it will continue to cultivate new business growth points in the future.

(This article first appeared in Titanium Media APP, author | Wang Jian, editor | Liu Yangxue)

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