China Landscaping Industry Report, 2011-2012

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Chinese landscaping industry generally falls into municipal garden, real estate garden and ecological restoration. Municipal garden is the largest category, accounting for roughly 46% of the total industry scale. Moreover, in the wake of urbanization, local governments gradually increase the investment in the urban garden construction.

Real estate garden ranks No. 2 in scale which makes up 30% of the total industry. Affected by the macro-policy control on real estate sector, the growth rate of the industry declines. Nevertheless, as the investment in indemnificatory housing construction increases, the real estate garden will maintain steady growth benefiting from the rigid demand for housing. It is expected that the market size of Chinese real estate garden will rise by 15% in the upcoming 3 to 5 years.

Ecological restoration only takes 16% of the landscaping industry because it sets higher requirements on technology but features low profit. The growth rate is expected to be less than 10% in the next 3 to 5 years.

Although the landscaping industry characterizes large scale and bright prospects, the industry in China is swarmed with small companies because of low entry barriers. Chinese landscape enterprises add up to 16,000, only 560 of which have obtained first-class qualifications in urban landscape. Since the landscaping industry involves all aspects of social life, both large and small landscape players in China strive to have a foothold in the industry, but their operation and profitability vary greatly due to their different main businesses.  

Municipal garden enterprises enjoy high operating revenue and growth rate. For instance, the operating revenue of Orient Landscape soared to RMB2.91 billion in 2011, up 100.21% YoY, slightly higher than that of Palm Landscape Architecture (92.79%), the giant real estate garden company and that of Shenzhen Techand (98.3%), the leader of ecological restoration companies. In H1 2011, the gross margin of Orient Landscape reached 36.96%, the highest in the industry.

The market size expansion of municipal garden has attracted many real estate garden companies to access into the market. For example, in H1 2011, Palm Landscape Architecture signed two contracts concerning municipal garden projects in Liaocheng, Shandong which were worth as high as RMB1.7 billion, equivalent to 1.3 times as the company’s total operating revenue in 2010, which lifted the company’s gross margin in H1 2011 up by 3.13 percentage points year on year.

For landscaping industry, design, construction, seedling cultivation and maintenance are closely related with each other and constitute a complete business chain. Large landscape enterprises start to apply the integration strategy and not only carry out construction and maintenance, but also make more efforts in the upstream seedling cultivation and design to sharpen their edges. For instance, Lingnan Landscape raised RMB120 million in 2011 to invest in two seedling bases located in Lu County, Sichuan and Jianli County, Hubei respectively. Pubang Landscape launched IPO in 2012 and plans to invest around RMB160 million to expand the construction of the upstream seedling base. Orient Landscape acquired three design companies in 2011 to improve its own design capabilities.

The report covers the followings:
Development environment, overall situation, market segment, development trends and forecasts of Chinese landscaping industry;
Market status, regional characteristics and competition pattern of Chinese landscaping industry;
Main business models and development of 12 players in municipal garden, real estate garden and ecological restoration, including the overall operation, project operation, development strategy and prediction.

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