Greenland Hong Kong's "change of leadership"

Chen Jun resigned, and Luo Weifeng took over.

China Housing Daily reporter Fu Shanshan reported from Shanghai

Greenland Hong Kong Holdings Limited (hereinafter referred to as "Greenland Hong Kong", 0337.HK), which has quietly "hidden" in this round of real estate adjustment cycle, has recently ushered in a major personnel adjustment.

On May 17, Greenland Hong Kong announced that Chen Jun resigned as an executive director and chairman of the board, and was appointed as the chairman of the nomination committee and a member of the remuneration committee of the board of directors, and was appointed as the honorary chairman of the board. At the same time, Luo Weifeng succeeded Chen Jun and was appointed as the new Executive Director, Chairman of the Board, Chairman of the Nomination Committee and a member of the Remuneration Committee of Greenland Hong Kong.

"This is a normal arrangement based on the business management needs of Greenland Group." Regarding Chen Jun's resignation, a person close to Greenland Hong Kong said that he still serves as the honorary chairman of Greenland Hong Kong, and also serves as the executive president of Greenland Group and the president of Greenland Infrastructure Group, and is the leader in charge of Greenland Hong Kong at the group level.

According to public information, Chen Jun, 49, previously served as the executive president of Greenland Holding Group Co., Ltd. (hereinafter referred to as "Greenland Holdings"). In recent years, the infrastructure business has become another major business of Greenland Holdings in addition to the real estate business, and Chen Jun has also been given a new mission by Greenland Group. Since April 2023, Chen Jun has served as the president of Greenland Holdings' large infrastructure group. After this resignation, Chen Jun will also focus on the group's large infrastructure business.

Chen Jun's career has basically been dedicated to Greenland Group.

According to public information, Chen Jun has successively served as the assistant general manager of the Chengdu Real Estate Division of Greenland Group, the assistant general manager of the Xi'an Real Estate Division, the deputy general manager of the Xi'an Real Estate Division, the general manager of the Xi'an (Northwest) Real Estate Division, the assistant to the president, vice president, executive vice president and executive president of Greenland Group, the chairman and president of the board of directors of Greenland Hong Kong Holdings Co., Ltd., and the president of Greenland Infrastructure Group.

During his tenure as Chairman of Greenland Hong Kong, Chen Jun led the company to a brilliant record.

Compared with the popularity of A-share Greenland Holdings, Greenland Hong Kong, a Hong Kong-listed platform under Greenland Group, is more low-key. In August 2013, Greenland Holdings subscribed to Shenggao Land to become its controlling shareholder, and changed the company's name to Greenland Hong Kong, thus making Greenland Hong Kong one of the bridges connecting Greenland Group's domestic and overseas resources. Since 2017, Greenland Hong Kong has taken advantage of the momentum and ushered in an increase in performance, and in 2020, Greenland Hong Kong's sales scale has exceeded 50 billion yuan, a record high.

Perhaps aware of the importance of this platform, Greenland Group once wanted to further expand and strengthen Greenland Hong Kong. In 2020, when the industry was facing challenges, Greenland Group handed over the responsibility of its Greater Bay Area development to Greenland Hong Kong, which acquired the entire equity of Guangzhou Greenland Real Estate Development Co., Ltd. (hereinafter referred to as "Guangzhou Greenland") from its parent company, Greenland Holdings, at a total consideration of RMB7.26 billion, including an equity transfer price of RMB3.64 billion and a net debt of RMB3.62 billion.

After the completion of the acquisition, the number of projects in the Guangdong-Hong Kong-Macao Greater Bay Area has increased from 2 to 31, not only directly penetrating into key cities such as Guangzhou, Shenzhen, Dongguan and Foshan, but also forming a scale advantage in terms of quantity, and the total number of urban layouts has increased from the original 26 to 36, with great development potential.

However, with the rapid deterioration of the real estate industry, in less than four years, Greenland Hong Kong has fallen from its peak to a trough.

According to its previously released 2023 results, the company's annual net profit attributable to shareholders of the parent company turned from a profit to a loss of 1.752 billion yuan, and the gross profit margin also dropped to 10%.

However, it is worth noting that in 2023, the total sales revenue of Greenland Hong Kong properties will be 23.8 billion yuan, of which Guangzhou is the city with the most confirmed sales, with 4.26 billion yuan.

Coincidentally, Luo Weifeng, the new chairman who succeeded Chen Jun this time, has served in several government departments in Guangzhou.

According to public information, Luo Weifeng, 60 years old, has been the chief executive officer since joining Greenland Hong Kong on June 15, 2023, presiding over the daily management of the company. After graduating from Renmin University of Chinese, he successively served as the secretary of the Guangzhou Municipal Committee of the Communist Youth League, the mayor of Panyu District of Guangzhou, the secretary of the Baiyun and Luogang District Party Committees of Guangzhou, the secretary and director of Guangzhou Development District and Sino-Singapore Guangzhou Knowledge City, the vice mayor of Guangzhou, the deputy secretary and mayor of Shaoguan Municipal Party Committee of Guangdong Province, and the president of Shenggao Investment (Holdings) Co., Ltd. and Shenggao Group Holdings Co., Ltd. During the term of appointment, Lo is entitled to a basic salary of approximately $1,706,400 per annum and discretionary management bonuses.

In the eyes of some industry insiders, the new chairman's past professional experience may bring some benefits to Greenland Hong Kong's future development, but at present, Greenland Hong Kong has no residential projects for sale in Guangzhou, and the two projects under construction are also commercial and office projects, so how the new head of the company can lead the company to break through is the key.

In fact, since last year, Greenland Hong Kong has been making a conscious transformation.

On August 27 last year, at the summary meeting of the 10th anniversary of the establishment of Greenland Hong Kong, the company put forward the "1+2+3+X" development strategy for the next five years, and implemented precise policies from four aspects: "optimizing the structure, optimizing the main business, strengthening synergy, and diversified development".

Specifically, Greenland Hong Kong proposed that the real estate business will make every effort to turn the situation around and become better and stronger; the synergistic development of the two businesses of agent construction and Mercure; Commercial, property and long-term leasing businesses are developing rapidly; Other businesses such as cultural tourism were rapidly cultivated and started quickly, seizing market opportunities, and actively promoting the company's high-quality development.

According to the above-mentioned people close to Greenland Hong Kong, up to now, Greenland Hong Kong's long-term leasing business has signed dozens of projects in Shanghai, Guangzhou, Shenzhen, Nanjing, Hangzhou and other cities, with a management scale of more than 10,000 units.

According to the data of the China Index Institute, in the first quarter of this year, Greenland Intelligent Manufacturing, a subsidiary of Greenland Hong Kong, ranked 13th in the list of new contracts and TOP5 in the list of new government construction with a new performance of 850,000 square meters. On April 28, Greenland Intelligent Manufacturing, Greenland Hong Kong's agent construction platform, once again successfully went overseas to establish a benchmark and won the bid for the design management consulting service contract for the Zhongtian Beach project in Pattaya, Thailand.

Despite the improvement in the transformation business, Greenland Hong Kong's real estate business is still showing signs of decline. In the first four months of 2024, Greenland Hong Kong's contracted sales were about 2.866 billion yuan, a year-on-year decrease of 42.48%; The total gross floor area of the contracts sold was approximately 255214 square metres, representing a decrease of 36% year-on-year.

In order to solve the financial dilemma, Greenland Hong Kong also sold a 49% stake in its landmark project in Guangzhou at a discount to "regain blood". According to some reports, the deal could cost Greenland Hong Kong a loss of $115 million. However, for Greenland Hong Kong, the disposal will allow the company to redeploy financial resources to optimize operational efficiency, while enhancing the company's returns, making its balance sheet more robust and, more importantly, as Greenland Hong Kong says, the proceeds from the disposal can replenish the company's general working stock.