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China's Economy: Will the Bubble Burst?, Online apartment rental…
China's Economy: Will the Bubble Burst?
Evergrande’s affects on
global markets & China’s
real estate bubble
Chinese Ecomomy
Financial industry
Risk control strategy
GDP
-4.1% :warning:
Real Esate
Black swan theory
:black_flag:
An event that comes as a surprise
Related business go bankrupt
Slow down
Restructuring
:recycle:
Global Economy
Stock market
Take a nose dive
Psychological expectations
Lehman Brothers of China :!?:
:red_cross: Still controllable
Evergrande
External
Shut down
Handover failed
Internal
Back pay
Evergrande debt crisis
About Evergrande
One of China's largest real estate developers
Listed in Hong Kong
based in the southern Chinese city of Shenzhen
1,300 projects in 280 cities
Account for as much as 30% of Chinese GDP.
Has invested in electric vehicles, sports and theme parks
Even owns a food and beverage business, selling bottled water, groceries, dairy products, other goods across China.
In 2010, the company bought a soccer team (Guangzhou Evergrande), is believed to be the world's biggest soccer school, at a cost of $185 million to Evergrande.
Evergrande also caters to tourists through its theme park division, Evergrande Fairyland
Creating the world's biggest soccer stadium,
How did it run into trouble
As the company struggled to repay creditors, global markets responded with selloffs.
After missing four payments, the company made a key payment to bond holders, staving off default.
Evergrande's electric car company is having trouble paying its suppliers
total debts of $305bn
having trouble finding buyers for some of its assets.
In recent years, Evergrande's debts ballooned as it borrowed to finance its various pursuits.
investors reacting
Trying to move forward
sell part of its stake in a local bank for roughly $1.5bil, raising some much needed cash.
Correlation & Comparison between Danke & Evergrande
Similarity
High leverage
Multiply their buying power in the market :money_with_wings:
Finance their assets
Use debt to invest in business operations
Increase shareholder value :arrow_up:
Issue stock to raise capital
Debt (borrowed funds)
Returns from an investment or project :recycle:
Difference
Danke Apartment
Evergrande
Danke’s bankruptcy crisis
& its business model
Mode
Danke's bankruptcy crisis
employees
crisis
NO
saliries for months
reason
❎Contractual commitment by Danke apartment
NO
rental
NO
house to live
Tenant
Landlord
Business model
1️⃣customer segment
👧🏻students
young people
for work
2️⃣Value propositions
organized management
environment
3️⃣Channels
network platform
4️⃣customer relationships
annual payment
tenants
monthly fee
landlord
5️⃣key activities
Advertisement
through the company's reputation to gain trust
6️⃣key resources
E-commerce
E-finance
Long term rentals
7️⃣key partners
landlords
8️⃣revenue streams
rent
from tenants
percentage
from landlord
9️⃣cost structure
Suppliers
Landlords
Tenants
Online apartment rental platform
China’s best professional soccer team
Bottled water
Pig farming
Theme parks
Electric cars
G8-Distribution
Trang
Peggy
Jessie
Angel
Tenant
Danke apartment
Lanlord
entrust
rent
Online apartment rental platform
Landlords
Tenants
Customers
Suppliers
(Bond) Investors
Banks
Long term leases :money_with_wings:
Buy high :arrow_up:
Sell low :arrow_down:
Offer its properties at major discounts :label:
Ensure money was coming in to keep the business afloat :recycle:
Rents flats from landlords long-term
Renovation
Sublets the flats or individual rooms as single units to tenants
At a relatively affordable rate
💰（Monthly rent）
💰（Monthly rent）
Investors
Companies
Use leverage :check:
:green_cross:
The use of
To amplify :explode:
v.s
:arrow_up_down:
:arrow_up_down:
One of China's largest real estate developers
:arrow_up_down:
1️⃣
2️⃣
