Greentown Management (9979.HK): From Industry Leader to Value Benchmark — A Capability Test Through Cycles

As China’s real estate sector remains in a difficult deep adjustment phase, searching for a bottom, this legacy “golden track” of project management and build-to-deliver (delegated development) is also beginning to undergo a pivotal transformation.

According to data from the China Index Academy, in 2025 the newly signed area in the delegated development industry was about 171 million square meters, up only 4% year over year. The slowdown in growth highlights further divergence within the industry, and the “the strong get stronger” pattern is becoming even more entrenched.

Against this backdrop, Greentown Management released its 2025 financial report, sending a clear “sound resilience” signal.

With improvements in cash flow, enhanced shareholder returns, better business quality, and the launch of the 2030 strategy, all these clues point to a common conclusion. This delegated development leader is accelerating the completion of a key capability shift. As the industry’s development logic moves from “scale expansion” to “value deep cultivation,” Greentown Management will also upgrade from a “pioneer of light-asset real estate development in China” to a “pioneer of full-cycle integrated real estate services in China.”

I. A cash-flow safety cushion and stable shareholder returns to solidify the foundation for profitability

In 2025, Greentown Management’s operating cash flow increased 42.3% year over year, reaching RMB 415 million. This figure is basically in line with net profit attributable to shareholders. It not only further strengthens the company’s profitability quality and reinforces its cash-flow safety cushion, but also significantly enhances financial resilience—providing strong support for long-term shareholder returns and the company’s future development.

(Data source: company materials)

What does this also mean?

In an industry where delegated development businesses generally face lengthened receivables cycles and slower project starts, Greentown Management’s “gold content” in profits remains solid.

From the data, the improvement in cash flow directly reflects the company’s improved operating efficiency and faster delegated development fee collections.

The financial report shows that in 2025 the company’s rate of commencement of newly contracted projects improved to 72%, and its contract conversion rate increased to 9%. The rise in operating efficiency is directly reflected in collections. Meanwhile, the time to start new projects was shortened to 126 days, and the time to achieve the first launch was shortened to 7 months. The achievement rate of milestone nodes and the on-time opening rate of model areas both increased by more than 10 percentage points year over year.

More importantly, although the delegated development industry generally adopts a light-asset model, Greentown Management—through refined operational management—strictly controls capital expenditure, keeping its capital expenditure pressure at an extremely low level. Even during the industry adjustment period, the company still has the capacity to maintain a dividend scale in line with the previous year.

In 2025, Greentown Management maintained a high dividend payout ratio. Combined with the interim dividends already paid earlier, the annual dividend per share was RMB 0.2095, and the payout ratio reached 100%—truly sharing the company’s operating results with shareholders in a timely manner.

More clearly, the company has made a commitment of “a dividend payout ratio of no less than 80% of net profit attributable to shareholders in 2026.” If performance and cash flow continue to improve, it will further optimize the shareholder return plan.

In addition, the latest equity disclosure materials from the Hong Kong Stock Exchange show that Greentown Management’s executive director and chief administrative officer Wang Junfeng received 328k shares under a share incentive plan on March 31, and also increased its holdings by a total of 328k shares in the open market using its own funds. Its total shareholding increased to 1.1M shares. In 2025, the company also repurchased and cancelled 10 million shares for the first time. While effectively safeguarding shareholders’ interests, this also sends the market a clear signal of management’s firm confidence in the company’s long-term development.

Overall, amid continued deep industry adjustment, Greentown Management can maintain a high dividend payout and provide clear dividend guidance. This in itself proves that management has sufficient confidence in the stability of the company’s future cash flow, and also lays a solid foundation for its subsequent profit recovery.

II. Multi-dimensional optimization strengthens the foundation and clarifies the path for profit improvement

In 2025, Greentown Management’s newly signed total GFA (gross floor area) reached 35.35 million square meters, down slightly by 3.1% year over year. But if you look only at scale, you may miss more important changes. In the year, the newly signed delegated development fees were RMB 9.35 billion, up 0.4% year over year.** Market share has remained stable at over 20% for ten consecutive years, continuing to lead the industry.**

(Data source: CRIC)

This is the implementation result of the company’s “improving project structure by exchanging quality for quantity, deepening cultivation in key cities to consolidate business foundations, and strengthening operating fulfillment to ensure profit realization.” Specifically, it can be seen across three dimensions.

From the perspective of customer structure, state-owned enterprises are the largest source of business. The characteristics of this type of business include strong revenue certainty, relatively higher average deal size and profit, and high repeat-entrustment rates—often referred to as “strategic safety cushion businesses.” By optimizing customer and project structures, Greentown Managementin 2025’s newly contracted projects the proportion of state-owned enterprises increased significantly from2024’s25.1%to37%, and the proportion of delegated development fees reached47.4%****, continuously improving profitability quality.

(Data source: company materials)

From the perspective of regional structure, the company has focused on key cities and strengthened its layout in core areas. The proportion of newly contracted projects in first- and second-tier cities reached 55%. Among the top ten provincial-level markets, eight had the No.1 market share. This also added two additional provinces compared with 2024. Among them, key benchmark projects in important cities such as Greentown · Tianjin Xiaoyue Qingchuan and Chengfa Greentown · Jiangyin Chengyun Luwu not only increased regional market penetration, but also drove an increase in delegated development fee rates through high-quality delivery, providing solid support for profit improvement. This is not only a reflection of market position, but also provides a fundamental guarantee for achieving project destocking conditions and realizing pricing premium capabilities.

(Data source: company materials)

From the perspective of project quality, the repeat-entrustment rate of the principals has risen for three consecutive years: from 13% in 2023 to 26% in 2025. Based on high levels of B-end customer satisfaction of 98 points and C-end customer satisfaction of 92 points, the increase in repeat-entrustment rate reflects deeper trust—that the principal is willing to pay a reasonable premium for quality and delivery capability.

It is also worth noting that, unlike some enterprises in the industry that adopt a “price-for-volume” strategy, Greentown Management proactively gives up low-margin, high-risk projects and focuses on high-value tracks.

According to data from the China Index Academy, currently in the industry, more than 80% of projects’ delegated development fee rates have fallen to 1%-3%. In this environment, Greentown Management still has more than 50% of projects with fee rates above 3%, and its commercial fee rates are significantly better than the industry average.

(Data source: China Index Academy)

This indicates that although the price war continues across the industry, the pricing power of leading enterprises has not been completely eroded.

Supporting this pricing advantage are Greentown Management’s eight core foundations developed over many years: creditworthiness, brand, teams, resources, systems, products, services, and customers. On this basis, the company’s product strength and operational efficiency continue to iterate and improve, further thickening its competitive moat and expanding its profitability space.

Stable delivery and兑现 (fulfillment) at the delivery end is a direct reflection.

The financial report shows that Greentown Management has delivered more than 10 million square meters for five consecutive years. In 2025, it delivered 129 projects as scheduled, with a total delivery area of 14.51 million square meters. A high fulfillment rate not only consolidates brand reputation, but also ensures timely cash collection of delegated development fees, driving profitability to improve.

Product strength is also impressive. Throughout the year, the company won 117 product-category awards, and retained the title of “China’s Delegated Development Enterprises—Product Strength TOP1” for consecutive years. At the same time, the approval submission speed for design方案 increased by 13%, and the efficiency of state-owned enterprise procurement and bidding improved by 20%-30%, showcasing comprehensively the overall strength of leading enterprises.

(Data source: company materials)

III. From a delegated development leader to a full-cycle service provider, Strategy 2030 expands the boundaries of profitability

Looking at the present, 2026 is the starting year of Greentown Management’s “Strategy 2030.”

At the performance briefing, management’s description of strategic vision shows a change: Greentown Management will upgrade from “a leader in China’s light-asset real estate development model” to “a leader in China’s full-cycle integrated real estate services.”

In terms of business layout, this full-lifecycle service extension has two clear directions:

One is the extension along the value chain of the delegated development core business.

Based on four dimensions—industrial chain adjacency, core capability reuse, resource endowment matching, and the light-asset model—the company selects related new businesses highly synergistic with its delegated development core business. Examples include new home agency sales, refined decoration, property services, leasing operations, and urban renewal tracks. The company will cultivate long-term new growth points in profit and cash flow.

Two is the geographic extension into overseas markets.

Relying on the large overseas resource network covering more than 150 countries and regions of the China Communications Construction Group, Greentown Management makes its move in a timely and prudent manner and officially establishes an overseas delegated development business department. It deeply integrates into the Belt and Road Initiative, actively explores development opportunities in overseas Chinese markets, and in 2026 will focus on completing in-depth research and path argumentation for parts of key core markets. While looking for incremental markets, the company is also leveraging the synergy advantages of the China Communications Group system—an instance of capability spillover—to provide new support for long-term profitability growth.

(Data source: company materials)

From the perspective of industry trends, Greentown Management’s strategic upgrade is mainly based on the following major industry opportunities.

First is the revitalization of inventory land held by urban investment platforms. Across the country, there is approximately 340 million square meters of residential land held by urban investment platforms that has not yet been developed. Of this, about 85 million square meters may have delegated development willingness—making it a high-quality source of business with relatively strong certainty for delegated development in recent years.

Second is delegated development by capital providers. On one hand, under the backdrop of “ensuring delivery of housing,” financial institutions’ investment in distressed-asset resolution business continues. Delegated development companies working together with professional capital providers to participate in the revitalization of distressed real estate businesses has broad space. On the other hand, some capital providers have already proactively explored partnerships with private enterprises and local state-owned enterprises that have investment capability, securing high-quality projects from the source. In this process, delegated development companies can play their professional role and help investors pre-screen projects.

Finally is urban renewal. According to estimated calculations based on the “seventh national population census” (“the 7th census”) data, the total residential area of “to-be-updated” housing built before 2000 in China is about 10 billion square meters, containing extremely broad market space.

Judging by Greentown Management’s business layout, even with multiple development opportunities at hand, the company still strictly adheres to its operational bottom line. It repeatedly emphasizes the principles of “pilot first, prudent assessment, steady advancement, and strict control of risks.”

With this approach, the company can both stay committed to long-term strategic direction and build solid development foundations, while also flexibly adapting to market changes and seizing development opportunities—ultimately achieving sound progress, continuous capacity expansion, and a healthy development path for profit recovery.

IV. Conclusion

At the crossroad of differentiation in the delegated development industry, the reshuffling of industry rankings, the clearing out of tail-end enterprises, and the rising concentration among leading enterprises are taking place. According to CRIC data, in 2025 the concentration of the top 10 companies by newly contracted scale reached 77%, up 6 percentage points from 2024.

(Data source: CRIC)

In such a shuffle period, Greentown Management’s value logic is undergoing subtle changes.

Placed in the context of industry adjustment, fee rates moving downward, and rigid labor costs, the company’s solid fundamentals, the magnitude of cash-flow improvement, changes in the quality of newly signed orders, and the official launch of Strategy 2030 all point to one conclusion: Greentown Management is completing a capability shift from scale-driven to value-driven.

For investors, it may also mean that the way they view this company needs to change.

Not only should they focus on Greentown Management’s market share in the delegated development track, but also on the capability realization in its leap from “a delegated development leader” to “a full-cycle service provider.”

After all, in a real estate industry characterized by long cycles, it is never the largest-scale players that can pass through the cycle, but rather those with the steadiest cash flow and the thickest capability barriers.