Real Estate Developers Turning to Other Areas for Funds

The mid-year reports on listed property companies in China have shown that only 40 percent of these companies have seen overall sales volume and net profit growth. Less powerful real estate companies have been forced to turn to other areas in an effort to maintain profit, such as the mining industry and financial business.

Let's take a closer look with our reporter Liu Min.

 
70 out of 170 mainland real estate companies listed on Hong Kong's stock market have been proved to be making profit while the rest are struggling with limited capital. Many middle and small sized companies, especially those which didn't get the chance to build government subsidized housing, are now facing huge challenges in maintaining profit margins¹. Manager Ding Lei says his company, Zhangjiang Real Estate, is one of them.

"Our company is transforming from a 100 percent real estate company to one which will also become involved in high-tech² and risk investment areas."

According to the market report from Wande Statistics Company, many real estate developers have turned to investing in the mining industry. Since late last year, more than 20 listed companies have invested capital into this area, accounting³ for one sixth of the entire real estate sector⁴ listed on the stock market. But analyst⁵ Shi Jianjun from Dazhihui Tactic⁶ Research Company says the format⁷ of diversified⁸ investment brings with it high risks for these companies.

"It's very dangerous for them since they may not be aware of the mining business in its entirety. Such investment involves many uncertainties⁹, including the issue of mine quality, human resources and corporate¹⁰ cultural management."

At the same time, a number of construction service suppliers have also been affected¹¹ by the current stringent¹² situation within the real estate market. Zhou Weigang's family company used to work with real estate developers carrying out construction projects. But recently he has chosen to divert the company's direction away from real estate and towards the area of finance.

"I've received two business opportunities this past March, one was a 180 million yuan real estate construction project, and the other was a 30 million yuan project to build a factory. I accepted the latter. Why? Because the capital chains from the developers were not good, and I couldn't take the risk. My prediction is that the real estate market will certainly go downhill very soon. So, now I'd rather stay away from the construction business."

In Shanghai, the trading volume on newly built houses has seen a huge decrease in recent months, though average property prices remain stable. Economics Professor Sun Lijian from Fudan University indicates that the capital chain pressure from the major real estate developers is not so intense just yet.

"Many real estate companies have established their own financing companies to collect capital from average people who expect to gain higher profit returns out of their investment. These financing companies don't need to apply for loans from the banks, but they could have enough money to maintain their capital flow."

For this reason, many researchers believe that there will be no sharp drop in housing prices for a considerable period of time to come. However, the people who work in the real estate market, the managers from property agencies disagree. Huang Hetao from the 21st Century Property Agency asserts that the turning point of China's real estate market has already emerged.

"The real estate developers have to win the final war during September and October, the golden season for property sales. Otherwise, they will face huge pressure later on. So I think whether average house prices plummet¹³ will become apparent very soon, during this period of time."

These market insiders believe that the market has come to its extreme peak, leaving real estate developers with no choice but to give in on price reductions.

For CRI, I'm Liu Min.

1 margins   

边( margin的名词复数 )； 利润； 页边空白； 差数

参考例句：

• They have always had to make do with relatively small profit margins. 他们不得不经常设法应付较少的利润额。
• To create more space between the navigation items, add left and right margins to the links. 在每个项目间留更多的空隙，加左或者右的margins来定义链接。

2 high-tech   

adj.高科技的

参考例句：

• The economy is in the upswing which makes high-tech services in more demand too.经济在蓬勃发展，这就使对高科技服务的需求量也在加大。
• The quest of a cure for disease with high-tech has never ceased. 人们希望运用高科技治疗疾病的追求从未停止过。

3 accounting   

n.会计，会计学，借贷对照表

参考例句：

• A job fell vacant in the accounting department.财会部出现了一个空缺。
• There's an accounting error in this entry.这笔账目里有差错。

4 sector   

n.部门，部分；防御地段，防区；扇形

参考例句：

• The export sector will aid the economic recovery. 出口产业将促进经济复苏。
• The enemy have attacked the British sector.敌人已进攻英国防区。

5 analyst   

n.分析家，化验员；心理分析学家

参考例句：

• What can you contribute to the position of a market analyst?你有什么技能可有助于市场分析员的职务？
• The analyst is required to interpolate values between standards.分析人员需要在这些标准中插入一些值。

6 tactic   

n.战略，策略；adj.战术的，有策略的

参考例句：

• Reducing prices is a common sales tactic.降价是常用的销售策略。
• She had often used the tactic of threatening to resign.她惯用以辞职相威胁的手法。

7 format   

n.设计，版式；[计算机]格式，DOS命令:格式化(磁盘)，用于空盘或使用过的磁盘建立新空盘来存储数据；v.使格式化，设计，安排

参考例句：

• Please format this floppy disc.请将这张软盘格式化。
• The format of the figure is very tasteful.该图表的格式很雅致。

8 diversified   

adj.多样化的，多种经营的v.使多样化，多样化( diversify的过去式和过去分词 )；进入新的商业领域

参考例句：

• The college biology department has diversified by adding new courses in biotechnology. 该学院生物系通过增加生物技术方面的新课程而变得多样化。 来自《简明英汉词典》
• Take grain as the key link, develop a diversified economy and ensure an all-round development. 以粮为纲，多种经营，全面发展。 来自《现代汉英综合大词典》

9 uncertainties   

无把握( uncertainty的名词复数 )； 不确定； 变化不定； 无把握、不确定的事物

参考例句：

• One of the uncertainties of military duty is that you never know when you might suddenly get posted away. 任军职不稳定的因素之一是你永远不知道什么时候会突然被派往它处。
• Uncertainties affecting peace and development are on the rise. 影响和平与发展的不确定因素在增加。 来自汉英非文学 - 十六大报告

10 corporate   

adj.共同的，全体的；公司的，企业的

参考例句：

• This is our corporate responsibility.这是我们共同的责任。
• His corporate's life will be as short as a rabbit's tail.他的公司的寿命是兔子尾巴长不了。

11 affected   

adj.不自然的，假装的

参考例句：

• She showed an affected interest in our subject.她假装对我们的课题感到兴趣。
• His manners are affected.他的态度不自然。

12 stringent   

adj.严厉的；令人信服的；银根紧的

参考例句：

• Financiers are calling for a relaxation of these stringent measures.金融家呼吁对这些严厉的措施予以放宽。
• Some of the conditions in the contract are too stringent.合同中有几项条件太苛刻。

13 plummet   

vi.(价格、水平等)骤然下跌；n.铅坠；重压物

参考例句：

• Mengniu and Yili have seen their shares plummet since the incident broke.自事件发生以来，蒙牛和伊利的股票大幅下跌。
• Even if rice prices were to plummet,other brakes on poverty alleviation remain.就算大米价格下跌，其它阻止导致贫困的因素仍然存在。