LPN <\/u><\/strong>and <\/u><\/strong>3 <\/u><\/strong>Strategies for Enhancing Sustainable Profitability <\/u><\/strong><\/p>

 <\/p>

LPN <\/strong>has set the strategy for the year <\/strong>2020 <\/strong>as a year of proficiency (<\/strong>Year of Proficiency<\/strong>) focusing on enhancing profitability, expanding revenue from the service sector, and improving financial liquidity for sustainable growth.<\/strong>

 <\/p>

Mr. Opas Sripakdi, Chief Executive Officer and Managing Director of L.P.N. Development Public Company Limited, <\/strong>stated that 2020 marks the 31st year of LPN, entering the fourth decade of the organization. It is a year of challenges in developing and improving work efficiency amid a slowdown in the real estate sector due to economic conditions and regulatory measures from the Bank of Thailand, resulting in decreased purchasing power.

<\/p>

“This year, we focus on enhancing work efficiency, emphasizing three main areas: improving profitability from real estate business, expanding recurring income from service businesses including building management, construction, consulting, research and development, and enhancing the company's financial liquidity management. Although the overall real estate market is expected to continue slowing down, projected to decline by about 3% compared to 2019, the economy is expected to grow by 2.5% – 3.0% in 2020,” he said.

<\/p>

<\/p>

- Enhancing the company's profitability focuses on managing existing assets to generate increased income, such as leasing completed condominiums to create revenue from existing properties, as well as accelerating the sale and transfer of completed projects valued at approximately 10 billion baht, targeting products priced below 3 million baht, with an aim to sell at least 50% of the existing value.

<\/p>

<\/p>

-  Expanding recurring income from service businesses, including building management, construction, consulting, and research and development through subsidiaries such as Lumpini Property Management Co., Ltd., Lumpini Project Management Service Co., Ltd., and Lumpini Wisdom and Solution Co., Ltd. The goal is to expand the customer base from service businesses in building management and engineering services from LPN to the external market to grow the revenue of this business segment by at least 20% in 2020 compared to 2019.

The current building management market for residential and office buildings continues to grow, with a market value of no less than 44 billion baht in 2019 and an annual growth rate of at least 10%, presenting an opportunity for this business to generate continuous revenue growth, aiming to account for 10% of total revenue in 2020.

- Financial liquidity management The company has a policy to manage the debt-to-equity ratio not exceeding 1:1 to ensure financial stability. At the same time, the company effectively manages financial costs, maintaining interest costs below 3%, down from 4%, due to the company's credit rating of A- by TRIS Rating, reflecting a stable financial position.

Additionally, in 2020, the company has a budget of 4 billion baht for land acquisition. The strategy for land purchases in 2020 is termed “Soil Strategy”, which involves selecting land in alleys not far from main roads or train lines to keep land acquisition costs manageable, allowing for the development of competitively priced housing that meets the purchasing power and demand of current market customers. In 2020, the company plans to launch approximately 10 new projects with a total value of about 12,000 - 13,000 million baht, divided into 4 low-rise projects valued at approximately 5,000 million baht and 6 condominium projects valued at approximately 7,000 - 8,000 million baht.

“This year, we emphasize low-rise projects that still have high purchasing power, aiming for low-rise sales to grow by no less than 20% compared to 2019. We plan to launch “Twin Houses” that provide a single-house feel in the city starting at 5 million baht to meet the needs of customers looking for urban residences. For condominiums, we focus on designs that meet all customer needs in the price range of 1-3 million baht, which still has purchasing power in the market. The recent relaxation of the Loan to Value (LTV) ratio by the Bank of Thailand will help stimulate purchasing power in the condominium market priced below 10 million baht, with projected condominium sales in 2020 expected to exceed those of 2019,” he added.

This strategy gives LPN confidence that 2020 will be another year where we can maintain continuous business growth, despite the overall real estate business slowing down due to increased household debt and the Debt Service Ratio (DSR) measures expected to be implemented this year, which will lead financial institutions to tighten lending. However, we are confident that in 2020, LPN will maintain its ability to generate revenue and profit better than in 2019.

In 2019, despite being a challenging year for the real estate business, directly affected by the economic slowdown and LTV measures, the company's revenue only slightly decreased from 2018, while its profitability improved compared to 2018.

“We were able to enhance the company's profitability in 2019 better than in 2018, while the overall real estate business slowed down, due to continuous adjustments in our business strategy from 2017 to 2019. 2020 is the “Year of Proficiency” where we will enhance work efficiency and continuously generate profits, moving towards becoming a sustainably growing organization in all dimensions,” Mr. Opas concluded.

 <\/p>