Long term apartment: CEO of eggshell is checked and the problem of rent loan is hard to solve

category:Finance
 Long term apartment: CEO of eggshell is checked and the problem of rent loan is hard to solve


On June 18, the eggshell apartment (NYSE: DNK) disclosed a personnel change announcement. Gao Jing, CEO of the company, involved in the investigation. The board of directors has appointed Cui Yan, co-founder, director and President of the company, as the interim CEO, which will take effect immediately.

Kai Xin Bao shows that Gao Jing is the legal representative of the purple Wutong (Beijing) Asset Management Co., Ltd., holding 57% of the shares, and 43% of the temporary CEO Choi Yan holdings. In addition, there are 10 affiliated enterprises in Gaojing, including 7 as legal representatives, 3 as shareholders, 9 as executives and 6 as equity holding enterprises.

Song Qinghui, a famous economist, analyzed to China News Weekly that the founder is the soul of the enterprise. As the founder of eggshell apartment, Gao Jings investigation will inevitably have a huge negative impact on the company. If Gao Jing is punished for the above investigation, the high-level of the eggshell apartment is likely to make personnel changes and a major reshuffle, which may have a certain impact on the companys business strategic direction.

In fact, the companys share price fell sharply last Thursday due to Gao Jings investigation. As of the day, U.S. shares closed at $8.75, down 6.32%.

Including eggshell apartments, China News Weekly noted that affected by the epidemic, the long-term rental apartment industry has been plagued by disputes and thunderstorms over rent loans since the beginning of the year. Now, with the investigation of the co-founder and CEO of the company, the development of eggshell apartment is also cast a shadow.

Profit difficult

Eggshell apartment is the Internet long rental apartment brand of purple Wutong (Beijing) Asset Management Co., Ltd., founded by Gao Jing and Cui Yan two people in 2015. Since then, two people have jointly been responsible for the management and operation of eggshell apartment. With the continuous development of the rental market, on January 17, 2020, eggshell apartments were listed on the NYSE.

According to the data of tonghuashun, the net profits of eggshell apartments in 2017-2019 were - 272 million yuan, - 1.37 billion yuan and - 3.437 billion yuan respectively.

On June 10, eggshell apartment disclosed its first financial report after listing, i.e. the first quarter report in 2020. According to the financial report, in the first quarter of 2020, the company achieved an operating revenue of 1.94 billion yuan, an increase of 62.48% year-on-year, and a net profit of -1.234 billion yuan. The net profit of the same period last year was -816 million yuan, and the loss area further expanded.

Why does eggshell apartment run counter to its net profit? On the one hand, long-term apartment is a less profitable industry, with a general profit of only 1% - 4%; on the other hand, it is related to the business model of long-term apartment.

As we all know, the way of high rent and low rent is often adopted for long-term rental apartments, that is, to take the house at a price higher than the market price, pay the rent to the landlord on a monthly or quarterly basis, and then rent the house at a low price, but charge the tenant half a year or a years rent at one time.

Through the above methods, the scale of long-term apartments can be rapidly expanded, but there are also profit risks. It is understood that the model has been in a loss operation state in the early stage. Only when the scale of long-term rental apartments is large enough to affect the local housing rental price, and the housing rental rate is high and the tenant liquidity is large, can the profit be realized.

In fact, many long-term rental apartments often fail to wait for the day when scale is king.

According to the data of Fang Dongdong, in 2019, 53 long-term rental apartment platforms broke the capital chain due to poor management, 45 failed and ran away, 4 were purchased, and 4 were in arrears. Among them, Hangzhou has become a disaster area of the explosion of long-term rental apartments. The Lega apartment, Guochang apartment, woke apartment, Deyu technology, Zhongxuan real estate, etc. in Hangzhou have successively erupted the crisis of capital chain.

As a core fulcrum for many long-term apartment enterprises to achieve rapid growth, rent loan is quite favored by long-term apartment platform.

Eggshell apartment is also a rent loan, but also a rent loan. In recent years, eggshell apartment has been in the forefront of public opinion for many times because of the problem of rent loan.

As early as 2017, eggshell apartment was interviewed and required to be rectified by Shenzhen Municipal Committee of the peoples Republic of China for rent loan. Unexpectedly, three years later, eggshell apartment was investigated again for rent loan.

According to the data of Shenzhen consumer committee, from March 1 to June 5, there were 219 complaints about eggshell apartments received by the residents, including consumer fraud, contract disputes, forced rent withdrawal and other types of complaints.

In response, eggshell apartment previously said in response to China Securities News that according to the statistics of eggshell Shenzhen customer service, the vast majority of complaints reported by eggshell apartment in the consumer association have been completed. At present, there are 27 more in the process. In accordance with the 15 working days set by the association, we will actively and properly deal with it at all times.

In addition, the sky eye showed that the zwutong (Beijing) asset management company behind the eggshell apartment has been punished by the relevant administrative departments for many times because of changing the internal structure of the house and splitting the rental, etc., and accumulated 23 administrative penalties.

Frequent complaints from consumers and repeated investigations by relevant departments are bound to have a series of negative impacts on the reputation, performance, stock price or other aspects of eggshell apartments, Song said. Whats more, this action not only damages the legitimate rights and interests of consumers, but also damages the reputation of enterprises. Its not worth the loss.

Chinas Newsweek noted that affected by the epidemic, the long-term rental apartment industry has been plagued by disputes and thunderstorms over rent loans since the beginning of the year.

According to the Beijing business daily, recently, many tenants were induced to lend in the process of renting beautiful houses in long-term apartments. When they encountered the situation that they would not return the loan after returning the rent, they found that the rental agency did not settle the loan until they received the payment reminder from the Shanxi Merchants consumer finance, which led to the overdue status of the tenants credit investigation.

However, after the incident, meiliwu and Shanxi Merchants consumer finance dumped the pot each other, and the problem has not been solved so far. In addition, since the beginning of the year, the first unit of Qingke apartment in long-term rental apartment has continued to explode. According to China Youth Daily, from February this year, tenants of Qingke apartments in Shanghai, Hangzhou, Nanjing and many other places are facing the dilemma of water, electricity and Internet disconnection or even being evicted from their apartments because of Qingke defaulting on the rent of their landlords. Long rent apartment is easy to explode, in addition to their own blood capacity, the emergence of the epidemic is to increase the survival risk of long rent apartment enterprises. Earlier, novel coronavirus pneumonia Secretary Zhao Qingxiang, Secretary General of Beijing Real Estate Agency Association, said that the housing rental enterprises had been greatly affected by the recent outbreak of the new crown pneumonia epidemic. So far, the business of leasing enterprises has not been fundamentally improved. Source: Yang Bin, editor in charge of China News Weekly_ NF4368

However, after the incident, meiliwu and Shanxi Merchants consumer finance dumped the pot each other, and the problem has not been solved so far.

In addition, since the beginning of the year, the first unit of Qingke apartment in long-term rental apartment has continued to explode. According to China Youth Daily, from February this year, tenants of Qingke apartments in Shanghai, Hangzhou, Nanjing and many other places are facing the dilemma of water, electricity and Internet disconnection or even being evicted from their apartments because of Qingke defaulting on the rent of their landlords.

Long rent apartment is easy to explode, in addition to their own blood capacity, the emergence of the epidemic is to increase the survival risk of long rent apartment enterprises.

Earlier, novel coronavirus pneumonia Secretary Zhao Qingxiang, Secretary General of Beijing Real Estate Agency Association, said that the housing rental enterprises had been greatly affected by the recent outbreak of the new crown pneumonia epidemic. So far, the business of leasing enterprises has not been fundamentally improved.