The year 2012, which has just passed by, is particularly special to CCRE. Besides the attention-grabbing leadership transition in the Chinese Government and the fall of the doomsday prophecy, CCRE’s creative use of sales and marketing and management measures also sent both contract sales and amount received over RMB 10 billion. The dedicated effort of the staff not only gave CCRE a substantial gift in the difficult year, it also drew a perfect closure to the Company’s key stage in its regionalization strategy.
In 2013, CCRE will officially enter the in-depth stage of its strategy. The operational objective at this stage is: In 4 years, i.e. around the end of 2016, the Company will enter 40-50 county-level cities and widen the scale of development to 2 million sq. m. or more, on the basis of a strengthened and expanded market in prefecture-level cities. In the process, the Company aims to spend 2-3 years to reestablish its superior position in Zhengzhou and progressively expand its competitive advantages in prefecture-level cities, in hopes to meet the basic balance of the three-market scale of development— “capital cities—prefecture-level cities—county-level cities”. In addition, the Company’s total scale of development is targeted to reach over 6 million sq. m. with the capability of reaching RMB 30 billion in contract sales and EBTIDA over RMB 5 billion. The achievement of these strategic goals bears important significance in the aspects below.
First – Demonstrate adaptation to the major trends of the country and the province’s planning: The 18th National Congress of the Communist Party of China clearly stated that, urbanization will be a major driver to sustaining economic growth in China, as well as part of the basic national policy, for the coming decade or more. In 2011, the Party Committee of Henan Province also established an urbanization-led plan that involved a coordinated development in industrialization, urbanization, and agricultural modernization. As early as 1999, CCRE staff has devised the regionalization strategy, which was later initiated in 2002. The strategy coincided with the current national policy and the “provincial strategy” of Henan province. After eleven years of strategic allocation and critical stage, CCRE shall be the biggest beneficiary in face of the important development opportunity as urbanization, as well as the advantage of early planning and first impression.
Second – Serves as a testimonial to the value of strategy: The top 100 Chinese property developers represent the mainstream of the industry. Among these developers, most of them consider the urbanization in China as the shift of major economic factors from rural village to cities and the continuous centralization of the factors from small cities to major cities. Therefore, targeting major cities as the corporate strategy allow for faster pace of development. CCRE, however, believes that the sole reliance on major cities or metropolises in a nation of 1.4 billion population insufficient to absorb 1 billion rural residents. The four markets in China, namely province, city, county, and town, must go through urbanization at different but concordant development paces. As a miniature of China’s economic and societal development with some 100 million population, 120 cities of county-level or above, and over 500 towns, Henan also provides enterprises with an enormous market for sustainable development and growth. The development strategy based on this market is essentially the same as the city-oriented strategy. County-level cities will be the new battle grounds during the in-depth stage of the regionalization strategy. These cities not only help CCRE to expand its headroom for development, they can also enhance the Company’s capability to sustain development. The unique strategic value is best demonstrated by CCRE’s above-average growth rate of 30%.
Third – Boosting team confidence: As a new market, county-level cities are characterized by its management flexibility, small market size, low operating profit, and underprivileged working condition etc. The Company’s continuous entry to 40-50 county-level cities means the projects under management will increase to over 100, of which the difficulty is equivalent to fighting in the battlefields in both central China and “Hundred Regiments Offensive”. To ensure the in-depth proceeding of the Company’s strategy, CCRE started its research and preparation to entering the county-level markets since July 2010. In 2011, CCRE selectively entered some of the county-level cities on a trial basis. In 2012, exhilarating news from Wugang and Huaiyang about contract sales exceeding RMB 100 million and sell-out on initial project launches were repeatedly heard. As we proportionally magnify these samples of victory on the battlefield of “Hundred Regiments Offensive”, the Company reaps not just the constant breakthrough in operational goals, but also the team confidence to tackle down the county-level markets.
Lastly – Garner more respect: In the journey towards the strategic progress towards county-level markets, CCRE will dedicate more effort in market research, project research and development, management innovation, and creating operational breakthroughs. In addition, CCRE’s unique and large-scale customer service system and its manifested values, which are the new support to the Company’s core competitiveness, will test CCRE’s wisdom and persistence. These efforts resulted in the rising customer satisfaction and growing respect in the society. The premise of such improvement is the true enhancement in staff satisfaction; that is, without improvement in staff satisfaction, there will not be any increase in customer satisfaction and subsequently higher social respect. For the past twenty years, CCRE experienced the difficulty in starting a new business and the confusion in exploring for direction; the Company also endured the loneliness during strategic allocation and the critical stage. Because of these, the fruits of corporate in-depth strategy ought to be shared by all CCRE members. Only the road of development in these two satisfaction levels in high standard should be considered a sustainable development. Only the strategy that allows the Company for sustainable development should be considered a successful corporate strategy, a strategy that ensure the Company’s development, while at the same time create more wealth for employees, for clients, for the society and garner more respect.
As mentioned above, the in-depth stage of CCRE’s regionalization strategy is the most critical one to the progression of the corporate strategy. Besides examining the alignment of the strategic direction with the mainstream trend, the market agreement with CCRE’s strategic values, and the strength of confidence in realizing CCRE’s goal to establish presence in 100 cities, it is also important to assess whether the strategic end meets with the shared team value. Hence, CCRE members should think clearer, more diligent, more tolerant, and achieve higher excellence. Only with these qualities can the corporate strategy be successfully push through and reach CCRE’s goal.
2013 – The new beginning of CCRE’s journey of regionalization.