Developing Growth Despite the Downturn in Urban China
Watch the video with Andrew Stotz or read a summary of the World Class Benchmarking on Yanlord Land Group Limited.
Background
Yanlord Land Group Limited (YLLG) is one of the largest foreign-owned developers in China by sales.
The Singapore-listed property company’s commercial and residential development activities are largely concentrated near major cities and regions of China, including Shanghai and the Pearl River Delta.
Business Description
YLLG is a Singapore-listed real estate group with revenues derived entirely from properties in four key growth regions of China, the Yangtze River Delta, the Pearl River Delta, the Bohai Sea region and West China.
The company has prime city locations such as Shanghai, Shenzhen, Tianjin and Nanjing.
With a diversified portfolio of holdings and developments, including residential properties, shopping malls, office buildings and hotels, the company has remained buoyant among a sea of developers experiencing the Red Dragon’s oft-mentioned economic slowdown. Nearly all of its revenue comes from development, with less than 10% stemming from investment and other sources.
Its secret sauce is simple. The group’s relatively strong balance sheet has partially insulated it from volatility in the mainland housing market.
YLLG had more than 15 projects undergoing pre-sales in mid-2016, including high-rise condos in Shanghai, Shenzhen, Suzhou and Nanjing.
It hasn’t slowed down either. It has currently acquired new land worth approximately $1 billion, which it plans to prepare for future projects.
Leadership
Chairman and CEO Sheng Jian Zhong founded Yanlord in 1993 by establishing offices in both Shanghai and Nanjing.
A serial entrepreneur, he has been involved in founding several other firms spanning the manufacturing, real estate and trading sectors in Hong Kong, Singapore and China.
Mr. Zhong’s long career with the company might give shareholders more trust, despite the worry among real estate investors concerning China’s current debt overhang.
World Class Benchmarking
Yanlord’s Profitable Growth is still below average among 180 large global real estate companies. The company’s unmitigated development, however, put Growth at #2 in the past 12 months.
Profit margin at #7 is the main drag on Profitability, but some investors might warm to a Sales growth metric rank of #1.
The drag on Growth is coming from a Margin change ranking of #7.
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