Eggshell apartment “hard to break”: annual loss, tenants’ worries, CEO being checked into a fan


Sina Technology Zhang Jun
The eggshell apartment, which has not yet fully recovered from the impact of the epidemic, once again ushered in a difficult time.
Gao Jing, the co-founder and CEO of eggshell apartment, was investigated by local government departments, and Cui Yan, the co-founder and President, acted as acting CEO.
As soon as the news came out, the eggshell apartment immediately ushered in a sharp fall in its share price, which once triggered a circuit breaker. It’s not just investors who are worried, many eggshell owners and renters also said on social platforms that they hope not to affect the normal rent.
The eggshell apartment, founded in 2015, has been IPO in five years. However, there are various hidden worries behind the rapid expansion. Since 2017, the company has lost money year after year, accumulating more than 6 billion yuan. After the outbreak and investigation, the future of eggshell will not be smooth.
Why CEOs are investigated is a mystery
Regarding the investigation of CEO Gao Jing, eggshell apartment said in the announcement that it was because the commercial investment before the creation of eggshell apartment was investigated by the local government department, so it was unable to exercise the company’s management responsibility for the time being. However, the announcement did not disclose specific investigation institutions and matters.
Eggshell apartment to Sina Technology said that everything is subject to the announcement information. The official said Gao Jing’s investigation had nothing to do with the eggshell apartment. The company’s business and business activities were normal.
But the news raised concerns among investors and tenants. Eggshell apartment shares fell for two consecutive sessions, while renters were worried about whether it would affect the company’s operations and the interests of renters. “What happened? I just rented the eggshell house. I hope it doesn’t affect the tenants. ” One tenant fretted.
Eggshell apartments have been sued in recent years
Sina Technology found that the main business of the eggshell apartment management, the purple Wutong (Beijing) asset management company and its subsidiaries, has seen more than ten judicial proceedings recently, mainly based on the dispute of the housing lease contract. Gao Jing is the legal representative of eggshell apartment and its subsidiary.
However, the eggshell apartment claimed that the investigation was due to the commercial investment before the creation of eggshell apartment. According to the data, before the creation of eggshell apartment, Gao Jing used to work in,, and
During, Gao Jing met Shen Boyang, then CEO of and now executive chairman of eggshell apartment. In fact, the early core team of eggshell apartment is actually the backbone staff of Shen Boyang said in an interview with sina technology that although Gao Jing didn’t like the long rent apartment mode when he founded the eggshell apartment, he still threw the eggshell for the purpose of throwing people, “compared with the mode, I value the founder of the eggshell apartment Gao Jing more.”
Liu Erhai, the egg shell apartment investor, founder and executive partner of joy capital, also mentioned that when he invested in the egg shell apartment, he was also very tangled, but Chen Min, CEO of tuhu Car Co., Ltd. invested by joy capital, was an old colleague of Gao Jing. Chen Min commented that “Gao Jing is very capable and excellent in many aspects”, which also gave Liu Erhai great confidence.
Gao Jing, who has been highly praised by many old colleagues and investors, has no clear clue why he was investigated.
In addition, according to sina science and technology, Gao Jing held positions in three enterprises before the establishment of eggshell apartment. The first is Beijing orange sunshine Technology Co., Ltd. established in January 2013, Gao Jing was the shareholder and legal representative; the second is green cherry (Beijing) Technology Co., Ltd. established in October 2013, Gao Jing was the supervisor; the third is iris (Beijing) Technology Co., Ltd. established in November 2014, Gao Jing was the shareholder. The company operates a self media trading platform called Zoe League, and its official website displays service customers including Baidu and other enterprises.
High speed expansion year after year loss
After Gaojing founded eggshell apartment, it developed rapidly with the support of angel investor Shen Boyang.
In 2016, the state issued some policies on long-term rental, and the long-term rental apartment began to usher in good news. By the time Shen Boyang left LinkedIn in mid-2017, the long-term rental market had become a new outlet for Internet entrepreneurship in China. Shen Boyang also decided to leave in person as executive chairman of eggshell apartment, responsible for strategic and capital issues. Liu Erhai, founder and executive partner of joy capital, invested in eggshell apartment because of Shen Boyang’s recommendation.
Shen Boyang said in an interview with sina science and technology that eggshell apartments have monthly, quarterly and annual targets on housing supply. He hopes that the number of eggshell apartments will exceed 1 million in the next three years (from 2018), compared with 80000 at that time. “As a start-up company, when what you do becomes an outlet, you must strive for high-speed development, or even sacrifice the interests of investors in a short period of time. We would rather lose money and still pursue the development speed.”
Number of houses in eggshell apartment over the years
At the end of 2015, the number of eggshell apartments established in one year was only more than 2000; by the end of 2016, it was 12000; by the end of 2017, it was 70000; in 2018, it was 236000; in 2019, it increased by 85.4% to 438000; in the first quarter of 2020, it dropped to 415000.
But long-term apartments are a huge investment industry. The mode of eggshell apartment is to take out the fund to sign in the house source from the owner first, and then through the renovation of the house source, to rent to the tenant finally. In the whole industrial chain, there is a high cost of house collection and decoration, while maintaining a certain high rental rate.
Financial status of eggshell apartment over the years
Under the rapid expansion, eggshell apartments lost money year after year. According to its prospectus and financial report data, eggshell apartment’s revenue in 2017, 2018 and 2019 was 657 million yuan, 2.675 billion yuan and 7.129 billion yuan respectively; in terms of net profit, the net losses in 2017, 2018 and 2019 were 272 million yuan, 1.370 billion yuan and 3.437 billion yuan respectively.
In the first quarter of this year, eggshell apartment’s revenue was 1.94 billion yuan, a year-on-year increase of 62.5%; its net loss was 1.234 billion yuan, compared with 816 million yuan in the same period of last year, which further expanded the loss range. Eggshell apartments lost nearly all of 2018 in the first quarter of this year.

According to Shen Boyang’s idea, most of the long-term rental apartments earn profits by rent difference, while the eggshell model’s larger imagination space in the future is not rent difference, but value-added services. For example, all the furniture in the eggshell apartment is designed by a freelance designer and produced through its own production line. In the future, eggshell can export its home furnishing capacity to the outside world; he even imagined that eggshell could sell the insurance of rental housing to users in the future, including other financial related services. “When the eggshell has 1 million houses and 1.5 million renters spend more than 10 hours a day in the eggshell room and sleeping on the eggshell bed, the imagination space of future value-added services is huge.”
At the same time, the eggshell also encountered the challenge of the outbreak earlier this year.
Under the epidemic situation at that time, renters could not return to their rented places and asked for eggshells to be rent-free; however, eggshells were once faced with survival problems due to a large number of vacant houses during the epidemic period, sharp decrease of rental population and aggravation of breach of contract. In order to alleviate the financial pressure, eggshell once forced owners to rent free eggshell, but caused a strong rebound of owners.
In the end, the eggshell gives the tenants and the owners their own rent-free programs. Although the problem has been solved to some extent, the financial situation of the eggshell has not been completely solved.
According to the housing data at the end of 2019 and the first quarter of this year, the number of eggshell apartments decreased by 23000 in the first quarter of this year. Among them, there are owners who actively terminate the contract, and there are also some eggshells who actively terminate the contract for some houses with high cost. Eggshell disclosed in its 2019 annual report that due to the early termination of the lease with some owners, the relevant income loss was about 82 million yuan.
Eggshell apartment is in debt
In addition, Sina technology has learned that the eggshell apartment company has encountered financial difficulties. An eggshell apartment decoration supplier said Shenzhen eggshell apartment has been in arrears for 11 months, resulting in difficulties for workers. The supplier said that it would lock the door of the eggshell house to remove passengers.
In fact, some eggshell apartment tenants said on social media that they paid rent to eggshell apartment but were unable to live. The owners had to accept the apartment because the eggshell apartment did not pay the rent on time.
Is constant rent loan the antidote or the poison?
In the complaints of black cat, a consumer complaint platform, there are many complaints about eggshell apartments, including deposit refund, service system, rent and loan issues.
Among them, the rent loan may be the most troublesome problem for long-term apartment enterprises, including eggshell apartments.
On the one hand, due to the high cost of housing acquisition and decoration in the early stage, the long-term rental apartment enterprises need a variety of financing means to raise funds. Rent loan is one of the relatively easy means to operate. The long-term rental apartment enterprises will pack the rent loan cooperated with the third-party financial enterprises as the rent payment method of “one payment for one mortgage”. Compared with the normal quarterly payment and annual payment, this is a huge attraction to the tenants. If the renter chooses the way of rent loan, the third-party financial enterprise will directly send the one-year rent to the long-term rental apartment enterprise, and the renter needs to pay the rent to the third-party financial enterprise every month.
These rents are an important source of funds for the rapid expansion of long-term apartment enterprises. As more and more tenants choose to rent, the capital and housing resources of long-term apartment enterprises will be more and more.
However, this highly leveraged development model also contains huge risks. In recent years, there have been many cases of long-term apartment industry closed down due to high-speed expansion and huge losses. Under the mode of rent loan, once there are problems in the capital and operation of long-term apartment enterprises, the interests of tenants can hardly be guaranteed.
A defender of the rights of Qingke apartment said that after he signed the rent loan mode in Qingke apartment, the owner of Qingke apartment failed to pay the rent to the owner due to the operation problem, so the owner would drive away the tenant, and if the tenant does not continue to repay on time every month, it will affect the personal credit. “At present, the salesmen and managers of Qingke can’t contact each other. This is P2P in the rental community!” He said excitedly.
Hu Jinghui, the former vice president of my family I love, bombarded the long-term apartment. He said that a large number of long-term apartments would die if the major institutions in the market continue to develop irrationally. Once the large-scale capital chain of long-term apartments breaks, there will be the situation that the owners drive out the tenants, hundreds of millions of people will be homeless, the consequences are more serious than the P2P explosion.
In fact, in December 2019, the 6 departments of the Ministry of housing and urban rural development jointly issued the “opinions on rectifying and standardizing the order of the housing rental market”. It is clearly stated that the rental income of housing rental enterprises can not exceed 30% of the amount of housing rent loans, and the proportion should be adjusted before the end of 2022.
According to the data disclosed in the 2019 annual report of eggshell apartment, the proportion of tenants who chose rent loans in 2017, 2018 and 2019 was 91.3%, 75.8% and 65.9%, respectively, still far higher than the regulatory red line of 30%.
At the IPO site in January this year, Gao Jing, CEO of eggshell apartment, said in his speech that there is much more eggshell can do after listing. He will never forget his original intention, continue to work in the housing rental market, and achieve the best service through refined operation.
At present, it remains to be seen why Gao Jing was investigated and whether it will affect the subsequent development of eggshell apartments. Whether the new acting CEO Cui Yan and the executive chairman of eggshell apartment Shen Boyang can make eggshell survive the current difficulties is still unknown.
The impact of the epidemic continues. In front of such long-term apartment companies as eggshell and Qingke, it’s time to reassess the balance between the expansion speed and the survival profit of the enterprises.