Deeply Cultivate Project Management Services and Focusing on Green Building Technology Landsea Green Management (0106.HK) Has Firmly Committed to Asset-Light Transformation

 

Landsea Green Management Co., Ltd.

（stock code: 00106.HK）

 

Deeply Cultivate Project Management Services and Focusing on Green Building Technology

Landsea Green Management (0106.HK) Has Firmly Committed to Asset-Light Transformation

 

 

(28 August 2023, Hong Kong) Landsea Green Management Co., Ltd. (“Landsea” or the “Company”, together with its subsidiaries collectively known as the “Group”, HKEx Stock Code: 00106.HK), a leading green property development service provider in China, is pleased to announce the interim results for the six months ended 30 June 2023 (“the Period”)

 

Practising Asset-Light Strategic Positioning and Actively Expanding Multiple Types of Service Projects

 

During the period, The Company’s revenue was approximately RMB3.96 billion. The gross profit of the Group was approximately RMB728 million. Profit before tax was approximately RMB43 million. In the first half of 2023, the contracted sales of “Landsea Products” was approximately RMB11.16 billion with corresponding contracted GFA of approximately 563,000 sq.m.

 

Although contracted sales in the first half of 2023 were still under pressure, the overall business of the Company was under normal operation. The gross profit margin and operating profit margin remained stable, and the net profit basically returned to positive. With the continuous deepening of deleveraging, the overall size of liabilities further decreased by nearly 2.3% as compared with the end of last year, of which the short-term debt ratio significantly decreased to 13.8%, representing a decrease of 6.6 percentage points as compared with the end of 2022.

 

For expansion of real estate development, Landsea continued to take a prudent and pragmatic approach. For the six months ended 30 June 2023, the Group secured a total of 9 projects in Suzhou, Wuxi, Chongqing, Foshan, Taizhou and other cities. All of the projects acquired were under development for sale and project management services projects, with an additional saleable value of RMB24.59 billion, representing a year-on-year increase of 216%, and an additional saleable area of approximately 1.12 million sq.m..

 

Over the years, Landsea has been exploring the transformation path from a traditional asset-heavy housing model to an asset-light model. We hope that we not only become a brand service provider with asset-light operation capability, but also to be equipped with investment capability to a certain extent, so as to implement the strategic positioning of “real estate investment bank + green developer”. Our ability has been well tested in the current market environment. In the first half of 2023, a total of 15 asset-light projects (including locked-in projects) were obtained in China, including project management service projects, technology output, consulting services and marketing agency services, etc., bringing a total contracted value of nearly RMB400 million, of which 9 projects have been implemented. As of 30 June 2023, we provided a total of 99 projects with project management services and with minority interests, while the total saleable area was 5.479 million sq.m. and the estimated saleable value was RMB108.77 billion, representing 94% of the total accumulated saleable value in the PRC.

 

As of 30 June 2023, the Group had reserve projects with an aggregate saleable area of 7,440 thousand sq.m. and expected saleable value of approximately RMB143.46 billion. Nonetheless, the accumulated saleable value in the PRC was RMB115.61 billion, approximately 55% of which was from first-tier and new first-tier cities and nearly 80% of which was from Yangtze River Delta and Greater Bay Area. As of 30 June 2023, the accumulated saleable value in the United States was RMB27.85 billion, of which 16% was from California, 31% from Arizona and 49% from Florida and Texas together.

 

Creating Green Differentiated Products with The Advantages of Products Diversification

 

As a green development service provider, Landsea’s core is to drive research, development and construction capabilities in the green building sector. Landsea will continue to strengthen its investment in green innovation and is committed to cultivating and developing its own green brand influence. During the period, we have built more than 150 green residential projects in 36 cities across the country, with a green residential development area of more than 25 million sq.m. At present, the Company has obtained a total of 102 green building certifications in the PRC, of which more than a half are three-star green building certifications; The first three-star green building project certification in 9 cities, including Shanghai, Nanjing, Hangzhou and Suzhou, was obtained by Landsea. In addition, we have also obtained 21 international green building certifications, including BREEAM and LEED.

 

Mr. Tian Ming, Chairman of the Board and Executive Director, commented, in the future, the real estate development business will mainly focus on first-tier cities and strong second-tier cities with good economic fundamentals, strong industrial foundation and continuous population inflow. High-quality and improved products will become the mainstream products in such markets. At the beginning of this round of real estate policy adjustment and control, we emphasised that we should win the defence battle of cash flow, give up our fantasies, have the bottom-line thinking, with the goal of “survival”, which has not changed so far. On the other hand, the industry has been cleared for more than two years. Many real estate enterprises are or will be exiting the market in this round of adjustment, and the industry concentration is expected to accelerate. Since July 2023, the central and local governments have been intensively voicing out, aiming to promote the adjustment and optimisation of real estate policies and the healthy and stable development of the industry. The remaining real estate enterprises are expected to obtain more resources in financing, projects and customers in the future.

 

Entering 2023, the Company’s asset-light upgrade and transformation has entered a new stage. The market situation and business transformation also put forward higher requirements for the Company’s abilities for expansion, operation and risk control. In the period of in-depth adjustment in the industry, we should not be swayed by impatience and worries on gains and loss, and should take a down-to-earth approach in creating innovative products, exploring and implementing new business models in difficult times. We should also establish an organisational and human resources system suitable for the current strategic model. In the future, the only way we could get through the cycle is to continue to maintain our strategic strength, hard work and long-term commitment.

 

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About Landsea Green Properties Co., Ltd.

Landsea Green Properties Co., Ltd. (Stock Code: 00106.HK) is a leading green property development service provider in China. It has been implementing a green product-centered and differentiated development strategy since 2004 and one of the Top 100 Chinese Real Estate Enterprises for eleven consecutive years. Landsea Homes, a holding subsidiary of the company, is listed on Nasdaq (Stock Code: LSEA) in 2021, being the eighteenth listed home builder in the United States. The company’s business network covers all major economic regions of China as well as the first-tier cities in the United States.