On March 29, 2018, Landsea Green Group Company Limited ("Landsea" or "the company", collectively referred to with its subsidiaries as "the Group", which is listed on the Hong Kong Stock Exchange with stock code of 00106), a comprehensive green development operator and life service provider, announced the full year results as of December 31, 2017.
Rapid Development Resulted from Transformation
Landsea Green Groups Core Profit Increased by 132%
In 2017, the Group continued to promote the transformation and upgrading strategy of different products, light assets and international market, and extended from traditional property development business to long-term leasing apartment, elderly care services, green finance, green architectural design, property services, green decoration, asset operation, sales services and other areas to build a green business ecosystem. On February 28, 2018, Landsea Green Properties announced the official change of the company name to "Landsea Green Group Company Limited", fully reflecting the strategic evolution of Landsea.
In 2017, Landsea made initial achievements in its green transformation and upgrading strategy, and performed well in all aspects of diversified businesses. In 2017, the Group achieved a core net profit of RMB 930 million, an increase of 132%, and ROE of 25.2%, an increase of 12%.
Procurement of quality projects
Increase of Sales Contracts
In 2017, Landsea achieved sales contract value of RMB 32.1 billion, an increase of 13%, of which non-Landsea equity sales were RMB 20.3 billion, development services income was RMB 750 million, an increase of 21%, and development services profit was RMB 310 million, an increase of 14%.
In 2017, 34 new projects were established, expanding business to 14 cities including Beijing, Chongqing, Xian and Jinan. The increased saleable area of 3.4 million square meters is expected to achieve a revenue of RMB 53.7 billion, of which the value of non-Landsea equity was RMB 39.6 billion, and the additional development service contract was RMB 1.4 billion. 90% of the additional projects were obtained through various methods such as mergers and acquisitions, equity participation and commissioned development, and the acquisition cost was significantly competitive. As of the end of 2017, the Landsea Traded Project has a saleable area of 6.35 million square meters with a saleable value of approximately RMB 117.9 billion.
Landseas developable projects in China are concentrated in first- and second-tier cities, as well as in the core areas of a small number of third-tier cities. The US-developable projects are concentrated in gateway cities on the east and west coasts.
The Group has consistently maintained a sound financial policy, with effective debt control and ample cash flow. As of December 31, 2017, the net gearing ratio decreased from 102% in the previous year to 49%; the weighted average financing cost decreased from 8% in the previous year to 7.4%. It was rated positive for B2 prospect by Moody, positive for B prospect by Fitch, and stable for B prospect by S&P as a company to be rated for the first time by international credit rating agencies.
Rapid Development of New Business
During the year, Landsea established the Long-term Leasing Apartment Business Unit and vigorously developed the long-term leasing apartment – “Landsea Apartment”. The products are divided into youth apartments, white-collar apartments, boutique apartments and serviced apartments. As of the end of December 2017, we have entered Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Nanjing, Suzhou, Chengdu, Xian, Wuxi, Ningbo and other cities, and signed 55 projects, confirmed 15,040 rooms, ranking top 5 in the industry with 100% property in compliance with the standard.
At the same time, Landsea Groups another business focus - "Landsea Ivy" is committed to becoming the best old-age care service institution in China, with the practice in Nanjing as a sample for the national layout.
In terms of the Green Finance Division, the Group established four funds and joint investment platforms for Pingan Real Estate, Cinda Investment, Zhongrong Trust and CITIC Capital during the year. The asset management scale at the end of the year amounted to RMB 6 billion.
Continuous Development of "Banyan Forest Project"
In the past year, on the basis of consolidating the property business, Landsea has launched a comprehensive "Banyan Forest Project". We will develop long-term leasing apartment, elderly care services, financial services, and the US business unit, and strive to build business systems such as asset management companies, decoration companies, design institute companies, and property service companies to vertically expand the diversified business of Landsea Green Group.
In the future, Landsea will continue to operate green property business as one of its core businesses. In 2018, the "Landsea Produce" contract will reach the sales target of RMB 46 billion, a year-on-year increase of 44%. At the same time, it plans to expand into the South China region and complete the national layout. The value of the newly established projects is RMB 80 billion, and the target is to increase the project development service contracts to be valued at RMB 1.6 billion.
Mr. Tian Ming, Chairman of the Board of Directors of Landsea Green Group, said that although Landsea has entered more and more business areas and fields, Landsea always insisted on advocating green environmental protection, because this is not only the main axis of the differentiation of Landseas competitive advantage, but also in-depth DNA of the blood of Landsea. On the road of strategic transformation, Landsea needs to truly change from product orientation to customer orientation. "Responsible for customers" is an unbreakable business philosophy. From the perspective of the ultimate consumer, we can make truly excellent products and create value for our customers to gain market recognition.
At the launch conference of the fourth-generation urban residential products on March 26, Mr. Tian Ming also introduced Landseas practice and innovation in the new generation of urban residential products. At the conference, he expounded Landsea’s diligent