First, real estate development companies;
Second, property management companies;
Third, other non-major operating companies.
There are three main reasons why Vanke has so many subsidiaries:
First of all, in the real estate industry, it is common to set up a project company when developing new projects. The project company is not a sustainable management entity in the usual sense. When a real estate project is completed, sold and delivered to consumers, the project company has completed its mission and can cancel it. By establishing a project company, a real estate project can be accounted and evaluated separately. On the legal level, for the project company, it only needs to bear limited liability for the project with registered capital, which effectively controls the risks. This kind of company is a real estate development company. According to Vanke's 20 19 annual report, the group added three 88 subsidiaries in 20 19 and reduced19 subsidiaries.
Secondly, the establishment of the project company contributes to the professional management of the property and provides special services for the owners. This kind of project company is the property management company.
Finally, the establishment of a project company is convenient for the company to set up a shell company and carry out capital operation at home and abroad. That is, other non-major operating companies. For example, the capital investment of minority shareholders' rights and interests can be obtained through subsidiaries. However, this investment method has a disadvantage: minority shareholders are actually other shareholders who cooperate with Vanke. When a cooperative project ends, there are usually no new projects, so minority shareholders demand to distribute their net profits. According to Vanke's historical financial data, the cash dividend of minority shareholders can reach about 50%.
These are three reasons why Vanke has many subsidiaries.