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

As China’s real estate sector continues to undergo a deep adjustment and struggle to find its footing, this former “golden track” of contract development is also beginning to see a key transition.

According to the China Index Academy (Centaline Index Institute) data, in 2025 the contract development industry’s newly signed floor area was about 171 million square meters, only up 4% year over year. The slowdown in growth highlights greater industry differentiation, as the “the strong get stronger” pattern becomes even more entrenched.

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

Improvements in cash flow, enhanced shareholder returns, better business quality, and the launch of Strategy 2030—all point to one conclusion in unison. This contract development leader is accelerating a switch in key capabilities. As the industry’s development logic shifts from “scale expansion” to “value deepening,” Greentown Management will also upgrade from “a leader in China’s light-asset real estate development model” to “a leader in comprehensive real estate full-cycle services.”

I. A cash-flow safety net and stable shareholder returns, laying a solid foundation for profitability

In 2025, Greentown Management’s operating cash flow increased 42.3% year over year to RMB 415 million. This figure closely matches attributable net profit, not only fully strengthening the company’s earnings quality and reinforcing its cash-flow safety net, but also significantly enhancing 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 environment where contract development firms generally face a longer collections cycle and slower project starts, Greentown Management’s “earnings quality”—its profit “gold content”—remains solid.

From the data, the improvement in cash flow is directly attributable to the company’s enhanced operational efficiency and faster collection of contract development fees.

The financial report shows that in 2025, the start rate of newly secured projects increased to 72%, and the contract conversion rate rose to 9%. The improvement in operational efficiency is reflected directly in collections. Meanwhile, the project commencement cycle was shortened to 126 days, and the first opening cycle to 7 months; the achievement rate of milestone nodes and the on-time opening rate of model sections increased by more than 10 percentage points year over year.

More importantly, although contract development firms commonly adopt light-asset models, Greentown Management—through refined operational management—strictly controls capital expenditures, keeping its own capex pressure at an extremely low level. Even during the industry adjustment period, the company still has the ability 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 company’s 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 explicitly, the company has made a commitment of “a dividend payout ratio no less than 80% of attributable net profit in 2026.” If performance and cash flow continue to improve, it will further optimize its shareholder return plan.

In addition, the latest equity disclosure materials from the Hong Kong Stock Exchange show that on March 31, Greentown Management’s executive director and president, Wang Junfeng, was granted 328k shares under the share incentive plan, and used his own funds to buy an additional 328k shares in the open market; his total shareholding increased to 1.1M shares. In 2025, the company also carried out its first share repurchase and cancellation of 10 million shares. While effectively safeguarding shareholders’ interests, it also sends a clear message to the market of management’s firm confidence in the company’s long-term development.

Overall, amid the industry’s ongoing deep adjustment, Greentown Management is able to 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 it also lays a solid foundation for its subsequent earnings recovery.

II. Multi-dimensional optimization to strengthen the foundation, and a clear path for earnings improvement

In 2025, Greentown Management’s newly secured contracts had a total gross floor area of 35.35 million square meters, a slight decline of 3.1% year over year. But if you look only at scale, you may miss changes that are even more important. In-year contract development fees secured by the company were RMB 9.35 billion, up 0.4% year over year. Market share has remained stable at above 20% for ten consecutive years, continuing to lead the industry.

(Data source: CRIC)

This is precisely the result of the company’s “improving project mix by optimizing for quality over quantity, deepening in key cities to reinforce its business foundation, and strengthening the degree of operational execution to ensure profit delivery.” It can be seen in three dimensions.

From the perspective of customer mix, state-owned enterprises are the biggest source of business. This type of business is characterized by strong revenue certainty, relatively high average ticket size and profit margins, and a high repeat-entrustment rate, earning it the label of “strategic safety-net business.” By optimizing its customer and project structure, Greentown Managementin2025’s newly secured projects saw the share of state-owned enterprises rise from2024’s25.1%to37%, and the share of contract development fees reached47.4%****, continuing to improve profitability quality.

(Data source: company materials)

From the perspective of regional mix, the company focuses on key cities and strengthens its layout in core regions. Newly secured projects in first- and second-tier cities reached 55%. Among the top ten provincial-level markets, eight had the #1 market share, adding two more provinces compared with 2024. Among them, key benchmark projects in major cities such as Greentown·Tianjin Xiaoyue Qingchuan and Chengfa Greentown·Jiangyin Chengyunlu, not only increase regional market penetration, but also drive higher contract development fee rates through high-quality delivery—providing solid support for earnings improvement. This is not only a reflection of market standing, but also a foundation guarantee for achieving favorable conditions for project destocking and兑现 of premium capability.

(Data source: company materials)

From the perspective of project quality, the repeat-entrustment rate has risen for three consecutive years. It increased from 13% in 2023 to 26% in 2025. Against the high baseline of 98 points for B-end customer satisfaction and 92 points for C-end customer satisfaction, the rise in repeat-entrustment rate reflects a deeper level of trust—that the entrusting party is willing to pay a reasonable premium for quality and execution capability.

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

According to China Index Academy data, at present, in the industry more than 80% of projects have contract development fee rates reduced to 1%-3%. In this environment, Greentown Management still has more than 50% of projects with fee rates above 3%. Its business fee rate is significantly better than the industry average.

(Data source: China Index Academy)

This indicates that although the price war continues, the pricing power of leading companies has not been fully eroded.

Supporting this pricing advantage are Greentown Management’s eight core fundamentals cultivated over many years: credit standing, brand, team, resources, systems, products, services, and customers. Based on these, the company’s product capability and operational effectiveness continue to iterate and improve, further strengthening competitive barriers and expanding profitability space.

Stable and reliable fulfillment on the delivery side is the most intuitive manifestation.

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 the brand’s reputation, but also further ensures timely collection of contract development fees, driving improved earnings performance.

Product strength is also impressive. Throughout the year, the company won 117 product-related awards, retaining its position as “China Contract Development Enterprises—Product Capability TOP1.” At the same time, the speed of submission and approval for design schemes increased by 13%, and efficiency in state-owned enterprise procurement and tenders improved by 20%-30%, demonstrating the comprehensive strength of a leading company in all directions.

(Data source: company materials)

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

Looking ahead, 2026 is the opening year of Greentown Management’s “Strategy 2030.”

At performance briefings, management’s description of its strategic vision showed 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 comprehensive real estate services.”

From the perspective of business layout, this full lifecycle service extension has two clear directions:

First, extending the value chain around the contract development core business.

Based on four dimensions—industry chain relatedness, reuse of core capabilities, alignment of resource endowments, and the light-asset model—the company selects new related businesses that are highly synergistic with its contract development core business, such as new home sales agency, refined decoration, property services, leasing operations, and city renewal tracks. It cultivates long-term new growth points in profit and cash flow.

Second, extending into the geographic space of overseas markets.

Relying on the massive overseas resource network covering more than 150 countries and regions under the China Communications Group, Greentown Management assesses the situation and formally establishes an overseas contract development business unit. It deeply integrates into the country’s Belt and Road Initiative, actively explores development opportunities in overseas Chinese markets, and in 2026 will focus on completing in-depth research and route-based argumentation for certain core markets. While seeking incremental markets, the company is also leveraging the synergy advantages of the China Communications system to spill over and export its capabilities, providing new support for long-term profit growth.

(Data source: company materials)

From industry trends, Greentown Management’s strategic upgrade is mainly based on several key industry opportunities.

First is the revitalization of stock land held by urban investment platforms. Across the country, the roughly 340 million square meters of residential land that has not been developed by urban investment platforms. Among this, about 85 million square meters may have an intention to pursue contract development—one of the more certain high-quality business sources for contract development in recent years.

Second is capital-provider contract development. On one hand, under the backdrop of “ensuring project delivery,” financial institutions’ investments in distressed-asset resolution and support business continue. Contract development firms, working together with specialized capital providers, participate in the revitalization of bad real estate businesses, and the space is broad. On the other hand, some capital providers have been proactively exploring partnerships with privately owned enterprises and local state-owned enterprises with investment capabilities, binding them at the source to lock in quality projects. In this process, contract development firms can leverage their expertise to help investors pre-screen projects.

Finally is city renewal. Based on the “Seventh National Population Census (”Seventh Census“) data” estimates, the total residential floor area of “housing awaiting renewal” built before 2000 in China is about 10 billion square meters, indicating extremely broad market space.

Judging by Greentown Management’s business layout, even with multiple development opportunities at hand, the company still strictly observes operational bottom lines. It repeatedly emphasizes the principles of “start with pilots, conduct prudent evaluations, advance steadily, and strictly control risks.”

By adhering to these principles, the company can both stick to its long-term strategic direction and solidify its development foundation, while also flexibly adapting to market changes and seizing development opportunities. Ultimately, it can achieve sound development with steady progress, continuous expansion, and a favorable earnings recovery.

IV. Conclusion

At the crossroads of differentiation in the contract development industry—where the reshuffling of industry rankings occurs, tail-end companies exit the market, and the concentration of leading companies increases—CRIC data shows that in 2025 the concentration among the top 10 companies by newly secured scale reached 77%, up 6 percentage points from 2024.

(Data source: CRIC)

During this period of market reshuffling, Greentown Management’s value logic is undergoing subtle changes.

Placed in the context of industry adjustment, fee-rate decline, and rigid labor costs, the company’s solid fundamentals, the magnitude of cash flow improvement, the change in quality of newly secured orders, and the official launch of Strategy 2030 all point to one judgment: Greentown Management is completing a capability switch from scale-driven to value-driven.

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

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

After all, in a real estate industry with a long cycle, it is never the company with the largest scale that can consistently pass through cycles; it is the one with the most stable cash flow and the thickest capability barriers.