LPN Sets Turnaround Strategy by 2024 <\/strong><\/span><\/p>

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LPN<\/a><\/strong> has outlined its strategy for 2021-2024 as a year of driving the organization towards sustainable growth, focusing on revenue growth, profit, and efficient cost management, while enhancing the quality of housing and services that meet the diverse needs of buyers.

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Mr. Opas Sripak, CEO and Managing Director of L.P.N. Development Public Company Limited (LPN<\/strong><\/a>), announced the company's operational plans for 2021-2024, stating that the company has set a three-year strategy aimed at driving the organization towards sustainable growth in revenue and profitability. This will be achieved through efficient cost management and the use of Big Data to analyze customer insights for the development of residential homes and condominiums that meet all customer needs at affordable prices, under the concept of "The Better Balance."

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“To achieve our goals, 2021 will be a year of organizational restructuring from a functional organization to a business unit management model, along with the application of digital technology to improve work processes for more agile decision-making and enhanced efficiency in managing expenses and operational costs. This will elevate customer experience management through a business management network platform. It is a preparatory year before we aim for significant growth in 2022-2024, targeting revenue of no less than 16 billion baht in 2024, which is the level we achieved in 2015 after overcoming the business risks that arose in 2020, maintaining a reasonable revenue and profit rate despite facing the COVID-19 pandemic that forced all sectors, including real estate, to adapt,” Mr. Opas stated.

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In 2021, in addition to restructuring the organization, the company has set a business plan focused on increasing revenue and managing costs across all business units. This includes four main strategies: penetrating the residential market to meet current buyer demands, expanding revenue bases from service sectors, managing financial liquidity to mitigate business risks, and creating added value from existing assets.

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- Penetrating the Residential Market<\/strong> <\/span><\/p>

            In 2021, the company will focus on launching more residential projects to meet the increasing demand from buyers interested in single-family homes, duplexes, and townhouses following the COVID-19 outbreak. Plans include launching six residential projects valued at 5.5 billion baht, targeting the premium market with single-family homes priced from 10 million baht and above under the brand “Home 365.” One to two projects valued at approximately 3 billion baht will focus on launching in central urban areas with small but highly private spaces under the concept of “Private Resident” to cater to buyers seeking urban residences with privacy. Additionally, projects under the brands “Lumpini Town Place” and “Lumpini Town Ville” will be priced below 10 million baht per unit, with about 3-5 projects valued at approximately 2.5 billion baht, designed with wide townhouses that can accommodate three cars for all family members.

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The company aims to increase the proportion of residential income from 20% in 2020 to 30% in 2021 and plans to raise this to 50% by 2024. At the same time, the company will maintain revenue from condominium projects in 2021 at no less than the level of 2020, with plans to launch approximately 2-3 new projects valued at around 3 billion baht in 2021, with the first project expected to launch in the second quarter of 2021.

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- Expanding Revenue from Services<\/strong> <\/span><\/p>

The company is actively expanding its revenue base from services beyond its existing business to new customer segments outside of LPN. This involves creating a business platform to build networks with business partners to increase revenue for service businesses managed by its subsidiaries, including Lumpini Property Management Co., Ltd. (LPP), LPC Social Enterprise Co., Ltd. (LPC), Lumpini Wisdom and Solutions Co., Ltd. (LPN Wisdom), and LSS Solutions Co., Ltd. (LSS). The target is for service revenue to grow by no less than 20% in 2021 compared to 2020, which generated service and rental revenue of 1.361 billion baht.

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- Managing Financial Liquidity<\/strong> <\/span><\/p>

In 2021, the company has a policy to manage financial liquidity by delaying plans to purchase new land for condominium development, as it has 6-8 plots of land acquired in 2020 that can be used for condominium development in 2021 as planned. Additionally, the company currently has condominium projects under construction and completed units ready for sale to support business growth continuously from 2021 to 2024, thus eliminating the need to purchase new land for condominium development. This allows the company to maintain cash flow to support investment plans in other areas or to mitigate risks that may arise from the uncertainty of controlling the COVID-19 outbreak.

At the same time, the company plans to issue bonds worth approximately 3 billion baht to repay bonds maturing in 2021 amounting to 2 billion baht and to invest in land purchases for residential project development, with an investment budget of approximately 4 billion baht in 2021, while maintaining a debt-to-equity ratio not exceeding 1:1 to ensure financial stability.

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- Generating Revenue and Backlog from Existing Assets <\/strong><\/span><\/p>

In 2021, the company plans to lease out existing assets, such as completed condominiums awaiting sale, to generate revenue and create a backlog for future sales. The company also plans to develop some undeveloped land in different ways to add value to the land it holds, in addition to achieving a 30% revenue growth in this area in 2020.

From the four business strategies in 2021, Mr. Opas stated that the company aims to maintain revenue growth of no less than in 2020, with residential income accounting for approximately 30% of total revenue and condominium income approximately 70%. Revenue from service and rental businesses is expected to grow by about 20%, with a target of achieving sales (presales) of approximately 10 billion baht in 2021, close to the 2020 sales and service revenue of 7.362 billion baht, and a net profit of 734 million baht.

                As of the end of 2020, the company had a backlog of approximately 2.2 billion baht to be recognized in 2021 and approximately 11 billion baht in inventory ready for sale.

“We are confident that after overcoming the COVID-19 crisis in 2020, we have learned from every crisis over the past 32 years, making us stronger and ready to grow sustainably according to the goals we have set,” Mr. Opas concluded.