Looking at the domestic real estate market, among the ten thousand armies, at a glance, there are many defeats and few victories, and the army is not in order. In the past 10 years, most of the old real estate companies have been dying and faltering. In the past five years, the entire industry has grown by more than 30% per year, but the average return on net assets of listed real estate companies has been declining. Among them, only WK is an exception, which not only maintains long-term stable growth, but also delivers an excellent report card this year: the company's business has increased by nearly 80%, the output of a single company has delivered 920,000 square meters, ranking among the best in the world, and the turnover has won the championship in China with 4 billion yuan. Therefore, the sentence that Li Zhong wants to say to Mr. Zhang the most is "learn from the good example of WK". Since we are just starting to do it, we have many opportunities, and the space for learning is endless, and learning never stops. Probably the advice to Mr. Zhang is these aspects, with Mr. Zhang's requirements for the development of the company, these will definitely be of great help.

"One Learning Culture"

The reason why WK is advanced is first of all because it has a very correct set of values. WK solved the property rights problem very early, and also demutualized very early, and went public very early, its entrepreneurs and management team have always been strict with the ethics of professional managers, dedication and love, and wholeheartedly return to shareholders. As a result, WK has developed a set of values and company culture (white-collar culture) associated with professional managers.

The management of WK reveals the professionalism, dedication, meticulousness and rigor brought by it. This value and culture has even become the characteristic packaging and unique brand value of WK products. WK's "corporate perspective and humanistic care" fully expresses the connotation of manager culture, and at the same time, it also takes proper care of the cultural interest of the white-collar class, so that a group of white-collar workers have a soft spot for WK.

Obviously, the decisive factor in making money is often not the money itself, but the core values of the company. Foreign empirical research on century-old stores has fully proved this truth, and one of the most important components of a company's core competitiveness from excellent to great is correct values. Therefore, we see an excellent and great WK today, and we have every reason to believe that the corporate culture and value ethics deeply rooted in WK managers are the most important winning genes.

"Second Learning Model"

Domestic real estate companies have always regarded themselves as "developers", and it seems that "development" is the only mode of real estate companies. Since the rise of the new economy, many people have begun to pay special attention to business models, and the real estate industry has become much more unheard of, with few doubting the role of "developer" and the model of development.

When Li Zhong explored the secret of WK's success, it dawned on him that the development model we have believed in for many years is not the only one, let alone the best business model, for real estate companies. The business model of almost all real estate companies can now be seen as the "Hong Kong model", i.e. land reserves, digging holes to sell properties, speculating in off-the-plan properties, while at the same time, the company's real estate business is diversified (covering almost all products such as infrastructure, residential, office buildings, hotels, shopping malls, etc.). It should be said that this model is often easy to succeed for a single project, or a company with only one project, but it is difficult to say for a multi-project or integrated real estate company.

Almost all of the established real estate companies in the mainland have adopted the Hong Kong model, and most of them have been mired in mud so far. In the past 10 years, a large number of Hong Kong companies, especially the so-called five major companies (Cheung Kong, Hutchison, Sun Hung Kai, Henderson and New World), have used the Hong Kong model and Hong Kong experience to show their strength in the mainland. This shows that the Hong Kong model is not an invincible magic weapon in the mainland.

In fact, if we compare Hong Kong, China with developed countries in Europe and the United States, it is not difficult to see the clues of the problem. Hong Kong is a city with extremely limited land, and the government has a high degree of monopoly on land, and the policy of high land prices has always brought great benefits to the government, while on the other hand, a few large real estate companies monopolize 70% of the supply. The result of the game between the two sides is high land prices, high property prices, and high profits. In the aftermath of the Asian financial crisis, this policy has been questioned and has suffered repeated setbacks in practice.

In the continental economy of the United States, land is constantly being developed with the process of urbanization, so to speak, in the United States, the supply of land is unlimited, as long as roads are built, rails (light rail), and holes (subways) are built, large tracts of land will be developed, attracting a large number of people to work and live. On the other hand, U.S. real estate companies are fully competitive, so land prices and property prices are determined by supply and demand, and companies have no windfall profits to speak of. Due to full competition and highly developed real estate finance, real estate companies have to adopt a highly specialized and long-term profit-oriented business model to win in the market segment and rely on long-term operation to make profits.

China has a vast territory, and the competitive conditions and marketization trend of the real estate sector in the future tend to be more towards the United States than Hong Kong. Therefore, it is important to change course and turn your attention to the American model as soon as possible. In other words, taking an extremely professional path is the way to win in China.

The success of WK is actually the success of the American model. At present, WK's specialization is not only reflected in the concentration of its main business in real estate, but also in practice to simplify all products into residential communities at the junction of urban and rural areas for emerging white-collar workers. Today, the WK production house is like a Wal-Mart store, which has formed the ability to replicate on a large scale. The Coca-Cola Company of the United States has become the world's No. 1 company by selling Coke alone, and today, China's WK has become the world's leading company in terms of production by selling a small white-collar home. WK is inferior to Li Ka-shing in terms of capital strength in Chinese mainland, but it has created achievements in terms of output and efficiency that are enough to make Mr. Li envious. This result in itself proves that Vanke's American model, which adopts a high degree of specialization and product simplification, and is strong in the market segment, can take root in China.