10 5 月, 2022

Broad Homes Utilizes Intelligent Manufacturing System to Expand into Smart Buildings

HONG KONG, May 10, 2022 - (ACN Newswire via SEAPRWire.com) - Broad Homes and Tencent Cloud enter into strategic partnership to develop new opportunities in smart buildings. Hefei Binhu New Area Gui Yuan and He Yuan Affordable Housing ProjectBroad Homes' Box MODUL apartment productsUtilizing Broad Homes' whole-process digital information system and globalized, large-scale, specialized and intelligent assembly building manufacturing and service capabilities, as well as Tencent Cloud's advantages in the field of all-true interconnection, digital twin, enterprise digitalization, AI platform and cloud services, the two companies 'strategic cooperation will focus on market development, technical cooperation and product development to jointly innovate and create development opportunities.In the future, Broad Homes and Tencent Cloud will together help more traditional enterprises to transform and upgrade. The two companies will carry out targeted cooperation and R&D in the fields of smart parks, smart communities, and true interconnection. Efforts will go towards creating key cooperation projects in the fields of intelligent construction, smart cities, industrial towns and digital upgrading of enterprises, and replicate and promote them nationwide to achieve wider and deeper strategic cooperation.The regulation and control policies of the real estate industry are expected to be continuously relaxed, and affordable rental housing will drive the demand for prefabricated construction.In 2021, China continued to increase its real estate regulation policies, and the regulation methods, intensity and detail were significantly upgraded. With the intensive introduction of a series of regulatory schemes to strengthen the prudent management of real estate finance, the real estate market suddenly cooled down. By the end of 2021, investment in China's real estate industry had recorded an annual growth rate of only 4.4%, lower than the 7% growth rate in 2020. In the first half of 2021, the number of new construction projects was relatively strong. However, due to the release of the pressure of regulatory measures in the second half of the year, the year-on-year decline was 11.4%.Since this year, the government issued several easing policies for the real estate industry. On the one hand, it has reversed residents' expectations, on the other hand, it has encouraged real estate investment and guided the industry to develop steadily in a positive and healthy direction through policies. For the prefabricated construction industry, the development goals of affordable rental housing, building energy conservation and green building have been issued recently, which provides a strong catalyst for industry development in the coming years. At the same time, the Ministry of Housing and Urban-Rural Development announced clear targets for affordable rental housing in 40 key cities during the 14th Five-Year Plan period. It plans to build 1.9 million new affordable rental housing units by the end of this year and 6.5 million new units by 2025, hoping to resolve housing difficulties of 13 million people. According to market analysis, the new plan of affordable rental housing will benefit the construction demand of prefabricated buildings and accelerate industry development. The benefit comes from the two advantages of prefabricated buildings: 1) shorter construction cycle in comparison to traditional construction methods; 2) reduction in overall labor cost and environmental burdens. For developers, the shortening of the construction cycle is very important, because expedited delivery will allow earlier generation of rental income. According to the calculation of Everbright Securities, if the rental price of affordable housing is estimated to be 40 RMB/m2 per month, and if construction period for building structure and decoration is shortened by 9 months, the corresponding rental value will be 360 RMB/m2. Under current industry circumstance with price of prefabricated buildings equaling that of traditional buildings, there is no doubt that prefabricated building is a more valued method of construction. In March this year, the Ministry of Housing and Urban-Rural Development released the "14th Five-Year Plan for the Development of Energy Efficient and Green Buildings", further clarifying the country's determination to promote high-quality development of green buildings. The plan states that by 2025, prefabricated buildings will account for 30% of newly built housing in cities and towns (the ratio was 9.1% in 2018). The policy clarified the need for green and low-carbon construction in the county and how assembled modular buildings can be well adapted to modernize the construction of farm houses and villages to create green and low-carbon villages.Specific targets for building energy efficiency and green building development in the "14th Five-Year Plan" periodMain Targets / By 2025Energy saving reconstruction area of existing buildings (100 million m2) / 3.5Construction area of ultra-low energy consumption and near zero energy consumption (100 million m2) / 0.5Proportion of prefabricated buildings in new urban buildings / 30%Proportion of electricity consumption in building energy consumption / 55%Broad Homes is a leader in China's prefabricated construction industry, promoting multifaceted growth.Broad Homes is the first prefabricated construction stock to IPO in Hong Kong, which was officially listed on the Main Board of Hong Kong Stock Exchange in November 2019. Broad Homes is a leading company in the prefabricated construction industry. The industry is highly policy driven and increase in market demand helps to drive down costs of prefabricated construction. The current price competition in the prefabricated construction industry is fierce, and the price of some assembled buildings is getting closer to that of traditional cast-in-place constructed buildings, which is one of the signs of rapid industry growth.After the impact of the COVID pandemic and overall industry downturn in 2021, Broad Homes recently submitted a solid financial report. As of December 31, 2021, Broad Homes reported total revenue of RMB 3.059 billion, up 21.8% year-over-year with solid operating cash flow and cash reserves. In addition, on January 17, 2022, Broad Homes reported that both new contracts signed and outstanding contracts at hand in 2021 reached record highs, with the total value of new contracts signed for the PC business in 2021 increasing by 20.9% year-on-year to RMB4.947 billion and the total value of outstanding contracts in hand increasing by 24.1% year-on-year to RMB6.448 billion, with solid profitability estimates. In March 2021, Box MODUL (Broad Homes 'modular integrated product) was officially released, which is a prefabricated and modular residential finished product produced by making full use of prefabricated construction technology. The product was launched in July and started to ramp up by September 2021. In less than six months, the product was delivered to 16 provinces, involving innovative application scenarios of cultural tourism, public, office, medical and other scenes. According to the data, as of December 31, 2021, Broad Homes obtained RMB154 million of newly signed contracts and realized RMB82 million of revenues. At the same time, the company's B-House series have also achieved good growth in demand with the help of the recent frequent introduction of affordable rental housing policies and rural revitalization targets. Copyright 2022 ACN Newswire. All rights reserved. (via SEAPRWire)

17 1 月, 2022

Affordable housing has created huge market potentials for prefabricated buildings

HONG KONG, Jan 17, 2022 - (ACN Newswire via SEAPRWire.com) - Affordable housing has created huge market potentials for prefabricated and green buildings.Recently, frequent implementation of affordable housing support policies has created huge market potentials for prefabricated and green buildings. Market analysis pointed out that PC component manufacturers in the prefabricated construction supply chain will be key beneficiaries from these new policies.As the most preferred brand in the prefabricated construction industry for three consecutive years, Broad Homes (02163.HK) will likely benefit from the recent policy catalysts. To highlight, the Company operates in both to-B and to-C business under its dual mode business model, which gives the Company potential to grasp onto a larger market share in this industry uptrend. First and second tier cities are actively responding to affordable housing policies.According to market data, since the beginning of December 2021, the Prefabricated Building Index (931020) rose nearly 10%, driven by discussions during the Politburo meeting in December to further promote construction of affordable housing. Similar discussions also took place during the Central Economic Work Conference, indicating growing interest from high-level officials.In the past year, affordable housing support policies have been frequently issued. The Politburo meeting mentioned the promotion of affordable housing construction for the first time in April and again in December. In addition, in July, the Politburo discussed the need to accelerate rental housing development and implemented supporting policies surrounding land usage and taxation. During the Central Economic Work Conference in December, discussions surrounding the need to "accelerate the development of the long-term rental housing market, promote the construction of indemnificatory housing, support the commercial housing market and better meet reasonable housing needs of buyers" are highlighted. Huachuang Securities pointed out that both the Politburo meeting and the Central Economic Work Conference have prioritized affordable housing before commercial housing, reiterating high-level officials' focus on affordable housing.In terms of specific development goals, the Ministry of Housing and Urban-Rural Development issued the "Notice on the Monitoring and Evaluation of the Development of Affordable Rental Housing in 2021" in November 2021. The notice monitoring and evaluation of the development of affordable rental housing in 2021 in November. The notice outlined that during the "14th Five-Year Plan" period, the supply of affordable rental housing will be largely increased, and the proportion of new affordable rental housing to total new housing supply is targeted to reach 30% or more.Meanwhile, key first and second tier cities have responded actively to recent policies and announced relevant targets for affordable housing construction during the "14th Five-Year Plan" period. Among them, Beijing, Shanghai, Shenzhen set targets of over 45% for new affordable housing to total new housing supply. The affordable housing industry is one of the most important application areas for prefabricated buildings. Therefore, the acceleration and expansion of the affordable housing market will generate growing demand for prefabricated buildings. According to Huachuang Securities' estimates, the annual new construction area of 123 million sqm corresponds to RMB 446.3 billion in affordable housing related investments, indicating huge volume growth in the affordable housing sector. Considering part of the growth will be hindered by the impact of fluctuations in real estate regulations, the proportion of prefabricated buildings to new construction buildings will continue to increase, benefiting industry leaders in the prefabricated construction sector. Prefabricated buildings is the most optimal method of construction under the "dual carbon" targets Prefabricated building refers to the use of modern manufacturing, transportation, installation and scientific management of production in replacement of traditional production where manufacturing process is more scattered, offers lower quality and efficiency, and requires intensive human labor. The key characteristics of prefabricated construction is standardization of architectural designs, industrialization of component production, mechanization of construction, and scientific organization and management. These include residential buildings produced through prefabricated construction methods.There are two reasons to support why prefabricated buildings best fit affordable housing demands.Firstly, prefabricated construction method significantly shortens the construction period. Time-saving is the key advantage of prefabricated buildings because early delivery corresponds to earlier collection of rent. According to Everbright Securities' estimates, assuming rental price of affordable housing is RMB40 per sqm per month, saving 9 months of construction period would correspond to a total cost savings of RMB360 per sqm. Secondly, prefabricated buildings help reduce environmental burden throughout the construction process. Different from traditional construction methods, prefabricated construction reduces manual operation and on-site wet construction, and incorporates digitally integrated technologies to support the modernization, intelligence, and other green construction characteristics. Prefabricated buildings also best fit the low-carbon building criteria for affordable housing. The "dual carbon" target acts as an important requirement for construction projects and helps guide the industry towards adopting more green methods of construction. Founded in 2006, Broad Homes is the largest manufacturer of PC components and PC production equipment in China. In November 2010, Broad Homes was listed on the HKEX and is also the first company to IPO in the prefabricated construction sector.According to Broad Homes' 2021 Interim Results, the Company's PC component revenue increased 12.4% YoY to RMB1.138 billion; PC production equipment business increased 306.6% YoY to RMB221 million. The increase in revenue is driven by market expansion and growing demand of PC components.As the pioneer and leader of China's construction industrialization, Broad Homes adheres to green development. Guided by the "14th Five-Year Plan" and 2035 targets, the Company aims to continuously improve the quality and efficiency of industrialized production, better serve the need for green and low-carbon development in rural areas, and explore innovative ways to promote the construction of affordable housing. Broad Home's innovative prefabricated product development maximizes time value saved from early delivery. It is worth noting that, in addition to the PC component business on the to-B end, Broad Homes also launched products on the to-C end in the second half of 2021.The three products from the to-C business are highly standardized and fully assembled buildings, including PC high-rise buildings, B-Homes(fully assembled, low-rise/multi-story buildings), and BOX modules.These products are characterized by their short construction period. It is reported that the multi-story, fully-assembled B-Homes' main body can be completed in 8 days and delivered with fine decoration within 100 days. This breakthrough in quality and efficiency truly allows the productization of buildings. Broad Homes noted that the Company has accumulated years of experience through their B-Home business and will bring positive synergy to the new BOX Module product. The amount of new contracts from BOX Module shows that the product is already gaining market traction with the price of fully-prefabricated buildings being lower than cast-in-place buildings. With many projects in the pipeline, the Company will continue to explore innovate application areas for prefabricated buildings. Copyright 2022 ACN Newswire. All rights reserved. (via SEAPRWire)

1 12 月, 2021

“Carbon reduction” opportunities and Broad Homes’ growth potential

HONG KONG, Dec 1, 2021 - (ACN Newswire via SEAPRWire.com) - The second round of land auction rules in 22 cities has been adjusted, and competitive quality has become a standard feature in the multi-city land auction market. An enterprise's vitality, product strength, innovation ability and product competitiveness are becoming the underlying logic to drive the industry into high-quality development.Broad Homes (Ticker: 2163.HK) is the first company in the prefabricated construction industry to IPO on the HKEX. The Company has accumulated more than 20 years of technological and industrial capabilities. The industry believes that Broad Homes will help lead the construction industry towards resource integration and more environmental-friendly developments.Opportunities under carbon reduction This year, "carbon peak, carbon neutral" was formally written into the government work report, the "14th Five-Year Plan" included policies to accelerate the promotion of green and low-carbon development. Since the construction industry is a key contributor of carbon emissions, companies related to green buildings will usher in new development potential. In fact, green building development is already on the rise. In June 2021, 15 departments including the Ministry of Housing and Urban-Rural Development issued the "Opinions on Strengthening Green and Low-Carbon Construction in County Towns" document, clarifying that the county will vigorously develop green buildings and building energy conservation, including the promotion and application of green building materials, the development of new construction methods such as prefabricated steel structures, and the full implementation green construction, etc.Prefabricated buildings are highly energy-efficient and can reduce carbon emissions by more than 40% throughout its life cycle, according to CITIC Securities. From 2016 to 2020, the CAGR of newly started prefabricated buildings nationwide reached 53%, and the proportion of newly started prefabricated buildings reached 20.5% in 2020. Broad Homes' path to carbon reductionFacing positive market prospects, Broad Homes' strategy to grasp development opportunities is industrialized construction. Tang Fen, Board Director and President of Broad Homes, commented: "Industrialized construction is the most effective technological path for the construction industry to achieve the dual-carbon goal." Broad Homes will continue to invest in technology and product R&D to consistently enhance product characteristics. "Simply put, construction industrialization is like building a house like a car. This methodology is currently in its early stages of development in China", Tang Fen added.Compared with traditional engineering construction models, prefabricated buildings have the following two advantages: 1) prefabricated construction can effectively shorten the construction period and improve construction efficiency. During the early stage of construction, prefabricated buildings go through stages of detailed and standardized design, shortening the construction period by more than 1/3 compared to buildings built using traditional construction methods. 2) Prefabricated construction helps to achieve energy saving, environmental protection and low carbon emissions throughout the entire construction cycle, Ping An Securities' research report indicated.As the industry leader for prefabricated construction, Broad Homes has greater development advantages. Firstly, Broad Homes is the first company in the industry to fully adopt the full-process digital information system. Secondly, Broad Homes is also the first company to obtain exclusive intellectual properties for the entire industry technology chain.At present, Broad Homes has 8 generations of product systems, a leading national information system, an accumulation of experience in building 200 million square meters of construction projects, and a strategic factory layout in China. As of June 2021, Broad Homes has 15 wholly owned PC factories and 60 joint PC factories that are currently under operations.Future growth is empowered by digitalizationWhen industrialized construction reaches productization, it is necessary to gradually move away from passively meeting customer needs to actively meeting them. Broad Homes believes digitalization should be adopted to improve efficiency and push for product innovation. Tang Fen commented: "How to return building construction to the essence of the product itself relies on realizing the values of industrialization and digitalization." Broad Homes began to actively engage in digitalization capabilities in 2014. Currently, the Company's operation is entirely driven by the data system. The front-end production and operation are driven by demand, and the influence of human factors in the entire production and operation process is reduced by 95%.In March 2021, Broad Homes officially released the BOX Modul product. Since the trial production in July this year, a total of more than 100 million new orders have been contracted in three months, showing positive demand from the market. It is reported that the BOX Modul is built ready-to-live with a wide range of application scenarios including cultural tourism, homestays, public service spaces, etc. This product allows the realization of more innovative models of living and usage of land. Take employee apartment as an example, in 2021, Broad Homes upgraded the settlement solution for employees. The multi-story employee apartment can be delivered in just 50 days, and high-rise employee apartment can be delivered in 150 days, which meets the differentiated market demand for rental housing in different cities. Regarding the successful innovation of products, Hu Shengli, the Co-President of Broad Homes and CEO of Broad Box Technology Co., Ltd., commented: "The Company's independently developed whole-process digitalized information system, PC-CPS, integrates all parts of the industrial chain including design, manufacturing, and construction and at the same time offering flexible manufacturing. This system has set a good foundation to produce BOX-Modul products." He also commented: "Through transformation and upgrades, the PC-CPS system can be implemented into BOX-Modul products. We hope in a year of continuous efforts, we can realize digitalization through the BOX-Modul's CPS system and with feedback from the client end, we hope to further enhance and upgrade our product."In his view, in the near future, BOX-Modul products can be upgraded and iterated from hardware to software just like the iPhone. Digital technology provides this possibility for the BOX-Modul. Copyright 2021 ACN Newswire. All rights reserved. (via SEAPRWire)

1 3 月, 2021

Broad Homes (02163.hk) Well-positioned for Revenue of RMB4.92 Billion in 2021, an Expected Increase of over 80%

HONG KONG, Mar 1, 2021 - (ACN Newswire) - On February 26, 2020, Broad Homes (02163.HK) released its annual results announcement for 2020. In 2020, it achieved total revenue of RMB2,613.9 billion, a year-on-year decrease of 22.4%, gross profit of RMB926.8 million, a year-on-year decrease of 19.0%, net profit of RMB216.4 million, a year-on-year decrease of 68.0%, and an increase in gross profit margin from 34.0% in 2019 to 35.5% in 2020.Broad Homes remarked that the decline in revenue was on one hand attributable to delayed construction progress of certain of its joint factories due to the COVID-19 pandemic, and on the other, a decrease in gains from loss of significant influence in associates by over 70% in 2020 from the corresponding period last year as a result of an adjustment in management mode of certain joint factories, as well as the improving layout of joint factories nationwide with the progressing of the "Broad Homes United Program".However, it is noticeable that PC unit manufacturing business of Broad Homes secured remark performance in 2020, with new contract amount reaching RMB4.09 billion, up 31.7% from RMB3.106 billion the corresponding period last year, and backlog amount reaching RMB5.196 billion, up 38.6% from RMB3.749 billion the corresponding period last year. Sufficient orders of the PC unit manufacturing business pave the way for Broad Homes in 2021.Looking into future, Broad Homes will embrace more opportunities leveraging the three advantages of rapid industry development, its data-driven and B+C dual-diver strategies. According to the Resolution in Relation to the Financial Budget Report for 2021 as set out in the appendix of Meetings to be Resolved at Annual General Meeting and Notice of Annual General Meeting published together with its annual report, Broad Homes budgets a revenue of RMB4.92 billion for 2021, a year-on-year increase of 88%.PC Unit Business to Ride upon the Potential Industry BoomIn recent years, the state vigorously guides and encourages the development of the prefabricated construction industry. Thanks to the policy support of the central government, Ministry of Housing and Urban-Rural Development and other competent authorities, domestic prefabricated construction industry has embarked on rapid development. Pursuant to Frost & Sullivan, market scale of PC unit manufacturing business reached RMB65.4 billion in 2020, and is expected to reach RMB285.5 billion in 2024 at a CAGR (Compound Annual Growth Rate) of 44.5%.With the progressing of the "Broad Homes United Program" and improving layout of joint factories, Broad Homes primarily generate revenue from its PC unit manufacturing business, which achieved revenue of RMB2.4192 billion, a year-on-year increase of 5%, and as a proportion of total revenue increased to 92.6% from 68.4% of the corresponding period last year. Riding upon its on-going rapid growth, PC unit manufacturing business has become the core business of Broad Homes. As of June 2020, Broad Homes had 15 wholly-owned PC factories and 88 joint PC factories accumulatively contracted for, making it China's largest PC unit and PC equipment manufacturer. According to the "2020 China Real Estate Industry Chain Strategic and Integrity Supplier Research Report" issued by China Real Estate Chamber of Commerce, Broad Homes was the most preferred cooperator among "Prefabricated Structure - PC Structure" brands in real estate suppliers.As an industry pioneer, after more than two decades of exploration, Broad Homes has been blessed with marked advantages amid the rapid development of the industry, which, the market believes, is well positioned to enjoy the dividend from the rapid growth of the prefabricated construction industry. Comprehensive Establishment of Digital Platform to Focus on Intelligent Upgrading According to information available, Broad Homes is the pioneer and leader in the industrialization of construction industry in China and the first to adopt full process digital information system and industrial chain technology system with exclusive intellectual property rights, which is capable of offering global, scalable professionalized and intelligent manufacturing of prefabricated buildings and servicesAs the only prefabricated construction enterprise having been selected for the Pilot Demonstration Project of Intelligent Manufacturing by the MIIT (Ministry of Industry and Information Technology of the PRC), Broad Homes has embarked on establishment of a prefabricated digital platform, upgraded digital development strategy and successfully forged two intelligent systems of PC-Maker software service strategy and PC-CPS system.PC-Maker service strategy is able to enhance the design interactivity and optimize the design process. Through data collection, utilization and sharing, it promotes the virtuous circle of work done by different parties and continuously enhances the cooperation with and upgrading of strategic customers. As of the end of 2020, Broad Homes has provided comprehensive prefabricated construction solutions to almost 300 property developer, including Vanke, Country Garden, Evergrande, Jinke and Gemdale. The PC-Maker service strategy enables Broad Homes to realize the transformation from business cooperation to standard co-construction, and accelerates the comprehensive upgrading of prefabricated buildings to standardization, digitalization and intelligence at the product end.Capitalizing on the mature PC-CPS intelligent manufacturing system, Broad Homes commences to transform into data-driven production at the demand end, and realized flexible demand-based manufacturing through digital definition of various elements of the industrial chain, which promoted and achieved efficiency, intelligence and visualization of the whole construction process, and further improved the product quality and construction efficiency. Providing full process digital solutions for prefabricated buildings with PC-CPS system helps to solve problems such as cost, logistics and supply chain management, and facilitates enterprises to achieve excess profit. Consolidating Industry Leading Position Leveraging B+C Dual-driver StrategyAt the recent Central Rural Work Conference, General Secretary Xi Jinping emphasized that, the state had made it clear to comprehensively promote rural revitalization, accelerate the development of rural industries, deepen rural reform, implement rural construction, and improve the quality of rural housing construction. As a forerunner of construction industrialization, Broad Homes proactively responded to the national strategy to implement rural construction, and successfully realized the strategic transformation from TOB to TOB+TOC in 2020.At the business end, Broad Homes remains committed to PC unit manufacturing and intelligent manufacturing research and development (R&D), and gradually shits focus away from construction contracting. Broad Homes developed PC Maker software and PC CPS to improve its production efficiency and cost control capacity. Meanwhile, Broad Homes was the first to realize the importance of data elements, and took the lead in the full process prefabricated construction intelligent-oriented development.At the consumer end, taking advantage of the policy of "separation of ownership, contracting right and management right" in rural homesteads, Broad Homes is expected to get involved in the trillion-level rural housing construction market. In 2020, Broad Homes focused on developing TOC business and launched B-house and the new product B-BOX. B-house products mainly target C-end consumers and the rural villa market, under which Broad Homes introduced seven standardized products, such as Buttonwood Villa, Oak Manor and Camphorwood Villa, established and opened B-house parks in Changsha, Wuhan, Tianjin and other cities, and developed new housing supply schemes to meet the diversified and customized consumption needs of the market, which is transforming the development trend of the traditional rural housing market.TF Securities predicts that Broad Homes will embrace rapid development in the prefabricated rural villa market segment, its product type design will satisfy the demands of the whole market in the future and TOC business scale (excluding B-BOX) will reach RMB5.25 billion in the next three years, thereby contributing to considerable performance growth. In view of the expansion of housing market demand and the leading advantage of digital intelligent technology, Broad Homes is well positioned to consolidate its leading position in the prefabricated construction industry.According to expert analysis, in 2020, China further introduced a more detailed industrial digital development strategy. In the new development era, Broad Homes continuously increases investment in digital economy, promotes R&D and digital upgrading, focuses on the principal business of PC unit manufacturing, and specifies the TOB+TOC dual-driver development strategy, which has laid a solid foundation for the rapid expansion of its PC unit business and the leading position in the prefabricated industry, and its future performance is expected to gain remarkable growth. Copyright 2021 ACN Newswire. All rights reserved. www.acnnewswire.com

26 2 月, 2021

Broad Homes (02163.hk) to Intensify Its Leading Position Through Data-driven and Dual-driver Strategies

HONG KONG, Feb 26, 2021 - (ACN Newswire) - Recently, promotion policies of prefabricated buildings were rolled out in succession, contributing to an on-going increase in scale of industrial chain and positive industry sentiment. In particular, Broad Homes (02163.HK), one of the industry leaders, which has exploited the construction industrialization field for over two decades, is committed to consolidating its competitive edges and has delivered remarkable performance with CAGR (Compound Annual Growth Rate) of revenue reaching 32.36% for the last three years (2017-2019), market share (of PC unit manufacturing business) amounting 13.5% and research and development (R&D) expenses as a percentage of revenue accounting for 8.82%, both topping the industry.Picture 1Picture 2Picture 3Picture 4 China's PC unit manufacturing market scale from 2014 to 2024 (estimated) Unit: RMB100 millionThanks to the recent favorable policies in the prefabricated construction industry, Broad Homes remains dedicated to its PC unit manufacturing business and upholds the data-driven and B+C dual-driver strategies, well positioned to further consolidate its leading position and achieve leapfrog growth.EXPEDITE INDUSTRIAL CHAIN DEVELOPMENT THROUGH COMPREHENSIVE DIGITAL TRANSFORMATION AND SECURE EXCESS PROFIT LEVERAGING INTELLIGENT MANUFACTURING As the only prefabricated construction enterprise having been selected for the Pilot Demonstration Project of Intelligent Manufacturing in 2018 by the MIIT (Ministry of Industry and Information Technology of the PRC), Broad Homes has, through over two decades of cultivation, spared no efforts in facilitating the digital transformation of the industry and expediting industrial chain development. It has established eight generations of product systems for prefabricated buildings, conducted R&D into domestic first-class full process digital solutions and boasted experience accumulated in industrial projects of over 100 million square metres and strategic factory layout across the nation. Currently, leveraging the leading manufacturing capacity of PC units, PC Maker I, the first domestic forward design software based on BIM platform in the field of prefabricated buildings, and PC-CPS intelligent manufacturing management system, the digital solution for the full process of prefabricated buildings, Broad Homes has bridged every stage of the whole industrial chain from design, manufacturing, construction to operation and maintenance and become a standardized portal for industrialization and intelligent service platform of the construction industry.The design software PC Maker I of Broad Homes effectively improves design interactivity and optimizes design process to significantly reduce the time required for a single design process. With improved design accuracy, it enjoys better function integration capacity and consistency between the subsequent production processes and actual use when compared with other BIM software, thus winning great trust and favor from customers. As of the end of December 2020, we had provided comprehensive solutions of prefabricated buildings for nearly 300 customers, including Vanke, Country Garden, Evergrande, Jinke and Gemdale, and established cooperative relations with nine out of China's top ten property developers and China's top ten construction enterprises, thereby promoting the transformation from business cooperation to standard co-construction, and accelerating the shift of prefabricated buildings into standardization, digitalization and intelligence at the product end.The picture 1 shows the functions of PC Maker 1 softwareProject Prefabricated preliminary design Construction drawing Prefabricated deep design Prefabricated inspection Drawing Model creation Unit dismantlingUnit design Drawing managementParameterized unit library Parameterized accessory library Custom module The PC-CPS intelligent manufacturing system of Broad Homes is applied in digital twin technology to pre-simulate the whole process of prefabricated buildings in the system and trigger all instructions through data, which integrates process, cost, logistics and supply chain management, and coordinates the whole process from forecasting to goods acceptance in real time, thus significantly improving production and operation efficiency. It has become a standardized portal and intelligent service platform for building industrialization and enjoys trust from various reputable domestic property developers and construction customers. In 2021, Broad Homes will continue to improve the PC-CPS platform, enhance R&D capabilities, boostthe soft power of intelligent manufacturing, promote the comprehensive integration of the industrial Internet platform system, and propel the modernization of China's construction industry.The picture 2 shows the whole functioning process of the PC-CPS systemStrategic customers Product R&DBusiness protocol for building modeling Project import Building model Engineering model Business model Concluding contractDelivery + first-level confirmation Construction site Complete semi-finished products PC manufacturing Finished products warehouse Transportation Site warehouseAssemble prefabricated parts Processing and packing Pallet distribution QR code-based production QR code-based loading Project startup QR code-based warehousing QR code-based launching QR code-based delivery QR code-based loadingQR code-based hoisting Level-three QR code triggered by hoisting Settlement AnalysisIn recent years, Broad Homes continued to increase R&D investment and strived to achieve digital transformation and upgrading. In 2019, its total R&D expenditure as a percentage of revenue remained at the forefront of the industry, which laid the foundation for the rapid expansion of its PC unit manufacturing business and forging leading advantages in the prefabricated industry, and brought about sustainable competitiveness and excess profits.The picture 3 shows the total R&D expenditure as a percentage of revenue of industry peers in 2019 and R&D expenditures of Broad Homes from 2017 to 2019 (including the amount expensed and capitalized based on the information in the prospectus of Broad Homes and CITIC Securities Research Institute)Total R&D expenditure as a percentage of revenueChina State Construction Honglu Steel Structure Golden Mantis Orient LandscapeShanghai Construction Group China ChemicalsChina Design GroupChina Industrial InternationalBroad HomesR&D expenditureR&D expenditure as a percentage of revenue From 2017 to 2019, the operating revenue and net profit of Broad Homes increased at a CAGR of 32.36% and 108.26%, respectively. In 2020, despite the shock of the COVID-19 pandemic, the PC unit manufacturing business, the core principal business of Broad Homes, secured sound growth with new contract amount of RMB4.091 billion, a year-on-year increase of 31.7%, and contract amount secured yet to complete of RMB5.196 billion, a year-on-year increase of 38.6%. Sufficient new orders and backlog paved the way for Broad Homes in 2021.With the relief of the pandemic, the revenue of PC equipment manufacturing business of Broad Homes will pick up. Upon completion of reform of the remaining joint factories and leveraging potent demand, the overall performance of Broad Homes will steer into a normalized growth track.PREFABRICATED BUILDINGS AN INEVITABLE CHOICE AMID POTENTIAL INDUSTRY BOOMIn recent years, the state issued relevant policies to vigorously guide and motivate the development of prefabricated construction industry. The "13th Five-Year Plan of Action for Prefabricated Buildings" of the Ministry of Housing and Urban-Rural Development clearly stipulates that the proportion of prefabricated buildings in new buildings should reach 25% by 2023 and 30% by 2025. The prefabricated building industry will embrace explosive growth.Policies regarding China's fabricated buildings were first introduced in 2016. Although the industry grew at a CAGR of 55% in recent four years, the penetration rate of fabricated buildings in China in 2019 was only 13%. According to Frost & Sullivan, the domestic market scale of PC unit manufacturing business will reach RMB65.4 billion in 2020 and RMB285.5 billion in 2024, with a CAGR of 44.5%. Compared with the traditional cast-in-place construction method, the prefabricated building is energy-saving and environment-friendly, which may shorten the construction period by 45% and save manpower by 75%. Looking into future, due to the disappearing demographic dividend, high labor cost and limited capacity of resources and environment, prefabricated building materials will be an inevitable choice for the transformation and upgrading of the construction industry. With the improvement of penetration, this industry is expected to usher in a trillion-level "blue ocean" market. From 2014 to 2024, the domestic market scale of PC units for prefabricated buildings is estimated to record a year-on-year increase of 680 times, promising great potential. (Picture 4)It is fair to say that in the next few years, the domestic prefabricated industry will enjoy a boom, and Broad Homes will also usher in an obvious turning point in profit. Three advantages will facilitate it to tap on the scale advantages 1) Broad Homes has established factories in Hunan, Tianjin, Yangtze River Delta and Pearl River Delta, which are the key areas for promotion of the prefabricated buildings, and 62 Joint Factories it contributed to span across the nation, which is expected to increase the capacity utilization rate of Broad Homes in the market boom; 2) the two design software of Broad Homes, being PC Maker I and PC-CPS, the intelligent manufacturing management system, empower the development of the industrial chain through digital management, resulting in per capita production efficiency far exceeding peers, and enjoy popularity among customers; 3) Broad Homes boasts eight generations of prefabricated building product system and experience accumulated in industrial projects of over 100 million square metres, positioning it in a very favorable position to seize the huge blue ocean market in the future.INTENSIFY LEADING POSITION THROUGH DUAL-DRIVER STRATEGY TRANSFORMATION AND PROPOSED INITIAL PUBLIC OFFERING OF A SHARESAt the beginning of 2020, Broad Homes categorized its business into two major sectors, being B2B and B2C, in which B2C represents the B-house business charged by the Module Integration Technology Division, and the new product B-BOX business will also be launched. In the B2C field, B-house products primarily target C-end consumers and country villa market, and seven standardized products have been offered. In the first half of last year, it commenced to take orders for country villas.It is reported that the self-built housing in rural areas and approximate to cities in China covers an area of over 1.3 billion square meters, and it is estimated that there will be more than 2.2 million new rural houses each year, implying great market potential for rural construction. Since the beginning of 2019, policies on rural residential pilot projects, marketing of collective management of construction land and decentralization of land use approval authority have been successively rolled out. Therefore, TF Securities pointed out in its research report that To C business will generate new growth driver for Broad Homes, and it is predicted that the scale of To C business (excluding B-BOX) of Broad Homes will reach RMB5.25 billion in the next three years, thereby contributing to considerable performance growth.Besides, Broad Homes proposed to apply for initial public offering of A shares and listing the same on ChiNext of the Shenzhen Stock Exchange, to further enhance its capital strength. No more than 86.054 million shares will be allotted and issued under this IPO exercise, and the proceeds raised will be applied in six fields, including Broad Homes CPS Henan Research, Development and Production Headquarter Base Project, The First Phase of Assembly PC Factory Construction Project of Broad Homes Weifang Direct Company, Broad Homes Smart Site Research and Development Project, Broad Homes Mansion Exhibition Center Project, B-BOX Modularized Building Production Line Technology Renovation Project and supplementing of Working Capital, with an investment amount of approximately RMB1.879 billion. In particular, Broad Homes CPS Henan Research, Development and Production Headquarter Base Project and The First Phase of Assembly PC Factory Construction Project of Broad Homes Weifang Direct Company will increase the PC units production capacity of Broad Homes by 240,000 cubic meters, upon which, total production capacity of wholly-owned factories will reach over 2 million cubic meters. As such, Broad Homes is expected to consolidate its leading position and promises great growth potential in the mid- and long-term. According to Frost & Sullivan, in terms of the revenue in 2019, Broad Homes is the largest domestic PC unit manufacturer, with a market share of 13.5%, and also the largest domestic PC equipment manufacturer in China, with a market share of 38.3%.Looking into future, with the relief and even disappearance of the COVID-19 pandemic, Broad Homes will continue to consolidate its leading position through data-driven and dual-diver strategy transformation and A-share listing, and share the dividend of rapid growth of the industry with shareholders and investors. Copyright 2021 ACN Newswire. All rights reserved. www.acnnewswire.com