Greenland Hong Kong chief Chen Jun focused on expansion
In order to better tap the mainland market, Greenland chief Chen Jun has set his sights on first-tier cities and provincial capitals while also expanding into the commercial sector
Chen Jun took the helm of Greenland Hong Kong Holdings after state-owned Shanghai Greenland Group completed a back-door listing, buying a 60 per cent stake in SPG Land (Holdings) in a share placement in August last year.
Before he was appointed chairman and chief executive of Greenland Hong Kong, Chen, 39, had been at Greenland Group for more than 12 years. Between 2001 and 2003, he was tasked with building the group's headquarters and overseeing a redevelopment in the suburban Kangqiao area of Shanghai.
Chen won acclaim from the management during a 10-year stint at Greenland Group's operations in Xian, the capital of Shaanxi province. Under his leadership, the company recorded good sales amid Beijing's go-west campaign and he was even nominated as a key contributor to Shaanxi's economic development.
Since Greenland Hong Kong engineered the back-door listing last year, how did you adjust the company’s strategy to better tap the property market on mainland China?
We did make some changes in our strategies after taking over a public company in Hong Kong. First of all, we took advantage of the Hong Kong financial market to issue a three-year US$700 million bond, a move to help optimise our debt structure. We also decided to invest less in mainland Chinese cities such as Ningbo and Wuxi where competition is fierce while planning to focus on only first-tier cities and some provincial capitals such as Kunming and Nanning.
Will Greenland Hong Kong extend the business from residential properties to other segments such as commercial and office?
Yes. After the Hong Kong listing, we began conducting a series of restructurings. Aside from the SPG Land assets, which mainly focused on high-end residential properties, we also intended to increase investments in economical housing projects to meet mainland Chinese demand. Since our parent is good at developing large mixed-use projects, we will follow its lead in expanding our businesses into commercial properties and office buildings. At the end of the day, we hope to have not only homebuyers as our customers, but also attract some corporate clients.
Will Greenland Hong Kong play any role in the parent’s ambitious push for expansion outside mainland China?
The parent defines Greenland Hong Kong as its window company and a listing in Hong Kong helps the group hone its image outside mainland China. For now, the Hong Kong-listed firm will seek investment opportunities in Hong Kong and mainland China only. Eventually, our Hong Kong businesses will represent about 15 to 20 per cent of Greenland Hong Kong’s total.
In the face of an expected slowdown in the mainland Chinese economy, are you still confident that Greenland Hong Kong will be able to reach the targeted sales of 50 billion yuan (HK$63 billion) in 2018?
We’ll keep the target unchanged despite a slowdown in the coming years. We are cautiously optimistic because the macroeconomic policies and the anti-corruption drive would eventually lay a solid foundation for long-term healthy growth in the property sector. Apparently, property development will no longer be an industry in which every player can make easy money. But we think the demand for housing is huge in mainland China.
There is speculation that developers will offer discounts to fast-track sales of the new apartments amid the financial squeeze. Do you also plan to do that?
Frankly, it’s not unusual for developers to cut prices as they face cash-flow problems. Overall, a correction in the property market is inevitable and from now on, the market will grow only at an orderly pace, rather than continuously reporting soaring growth in sales. We will also carefully monitor our cash flow in the coming months before deciding our pricing strategy.
How much will Greenland Hong Kong spend to boost its land bank in the coming years?
We hope to spend 8 billion to 10 billion yuan a year to boost our land bank and an annualised 20 to 30 per cent increase in the next few years can be expected.
Greenland Hong Kong has just officially launched a big project in Taiping Lake in Anhui province to tap the tourism sector. What’s your take on the tourism sector in mainland China?
We want to develop projects that encompass hotel, entertainment and sport facilities and health care to satisfy all needs. This is a market with huge potential in mainland China and we’ll continue to pay close attention to it. I would think those complexes should also include venues for business meetings.
As a senior executive with a mainland Chinese state-owned developer, what do you think are the biggest difficulties in managing a Hong Kong-listed firm?
There were some differences in management styles between Greenland and SPG. I must say the middle-level managers with SPG are excellent. However, we conducted some personnel reshuffles recently. My job now is to help the employees to understand Greenland’s philosophy and goal. Greenland is a state-controlled developer but it does not lack flexibility and incentives to inspire employees to work harder. I am confident that we can achieve all our goals.