Financial Performance - For the first half of 2024, Shimao Services reported revenue of RMB 4,031.8 million, with a gross profit of RMB 811.5 million and a net profit of RMB 210.8 million, resulting in a gross margin of 20.1% and a net margin of 5.2%[13]. - In the first half of 2024, the company achieved a revenue of RMB 4,031.8 million, with a net profit of RMB 210.8 million, resulting in a net profit margin of 5.2%, an increase of 0.2 percentage points year-on-year[24]. - Revenue for the six months ended June 30, 2024, was RMB 4,031,765 thousand, a slight decrease from RMB 4,098,139 thousand for the same period in 2023, representing a decline of approximately 1.6%[100]. - Gross profit for the same period was RMB 811,508 thousand, down from RMB 862,674 thousand, indicating a decrease of about 5.9%[100]. - Operating profit decreased to RMB 252,032 thousand from RMB 268,706 thousand, reflecting a decline of approximately 6.2%[100]. - Net profit for the period was RMB 210,837 thousand, compared to RMB 203,946 thousand in the previous year, showing an increase of about 3.4%[100]. - Basic earnings per share increased to RMB 7.46 from RMB 6.36, representing a growth of approximately 17.3%[100]. Property Management Services - The property management services segment generated revenue of RMB 2,761.0 million, reflecting a year-on-year growth of 5.7%, highlighting the company's competitive strength in a challenging real estate market[14]. - The property management services segment accounted for 68.5% of total revenue, generating RMB 2,761.0 million, a year-on-year increase of 5.7% from RMB 2,612.6 million[25]. - The gross profit margin for property management services was 20.0%, down 0.7 percentage points from 20.7% in the same period last year, attributed to increased investments in service quality and project management standards[25]. - The company is actively expanding into the non-residential property management sector, leveraging opportunities in government-funded institutions such as schools and hospitals[10]. - The overall economic environment remains challenging, with the real estate market experiencing slight contractions in investment and sales, impacting property management service growth[10]. Market Expansion - The company achieved a new high in market expansion with a new annual contract value of RMB 620.1 million from third-party bidding, adding 17.7 million square meters of contracted area in the first half of 2024[15]. - In June 2024 alone, the monthly market expansion project contract value reached RMB 230.0 million, setting a new monthly record for the company[15]. - The managed building area from independent third-party developers accounted for 75.2%, with a total of 185.6 million square meters, reflecting the company's enhanced market expansion capabilities[27]. - The company is focusing on enhancing its cash flow and profit margin balance through refined management and project analysis[19]. - The company is committed to enhancing service quality and customer satisfaction to drive revenue growth and maintain a competitive edge in the evolving market landscape[12]. Employee and Management Changes - As of June 30, 2024, the group had 44,011 employees, a decrease of 4.6% from 46,125 employees in the same period of 2023[66]. - Total employee costs amounted to RMB 1,815.3 million, down 6.9% from RMB 1,950.5 million in the same period of 2023[66]. - The reduction in employee costs was attributed to organizational streamlining and enhanced operational management capabilities[66]. - The company appointed Mr. Xu Shitan as the Chairman of the Board on September 1, 2024, and Mr. Shao Liang as Executive Director and President on April 26, 2024[75]. Financial Position and Assets - Total assets as of June 30, 2024, included net investment properties, properties, machinery, and equipment valued at RMB 562.0 million, down 4.8% from RMB 590.2 million at the end of 2023[53]. - Current assets rose by 16.9% to RMB 10,737.7 million from RMB 9,182.5 million at the end of 2023, maintaining a strong financial position[57]. - The company reported a significant cash balance of RMB 4,075,899 thousand at the end of the reporting period[106]. - The company maintained compliance with all applicable corporate governance codes during the reporting period[97]. Shareholder and Governance - The company emphasizes high standards of corporate governance to protect shareholder interests and enhance corporate value and transparency[90]. - The audit committee consists of three independent non-executive directors and reviews the company's financial reporting procedures and internal controls[92]. - The board of directors comprises six members, including three executive directors and three independent non-executive directors, ensuring a balance of skills and experience[91]. - The company did not recommend an interim dividend for the six months ended June 30, 2024, consistent with the previous year[97]. Revenue from Value-Added Services - Community value-added services revenue reached RMB 586.7 million, accounting for 14.5% of total revenue, a year-on-year decline of 17.3% from RMB 709.3 million in 2023[36]. - Non-owner value-added services revenue was RMB 80.9 million, accounting for 2.0% of total revenue, a decline of 33.2% from RMB 121.1 million in 2023[40]. - Urban services revenue amounted to RMB 603.2 million, making up 15.0% of total revenue, down 7.9% from RMB 655.1 million in 2023[41]. - Smart scene solutions revenue increased by 84.0% to RMB 47.3 million, compared to RMB 25.7 million in 2023[38]. Cash Flow and Financing - Operating cash flow for the six months ended June 30, 2024, was RMB (45,801) thousand, compared to RMB 350,568 thousand for the same period in 2023[106]. - Cash flow from investing activities showed a net inflow of RMB 850,551 thousand, down from RMB 1,592,073 thousand in the previous year[106]. - Financing activities resulted in a net cash outflow of RMB (183,053) thousand, compared to RMB (190,593) thousand in the prior period[106]. - The company continues to face various financial risks, including foreign currency risk, interest rate risk, credit risk, and liquidity risk[112]. Related Party Transactions - Revenue from services provided to related parties, specifically Shimao Group, decreased to RMB 104,884,000 for the six months ended June 30, 2024, down from RMB 193,590,000 for the same period in 2023, representing a decline of approximately 45.8%[192]. - The total amount of prepayments, deposits, and other receivables from Shimao Group was RMB 359,999,000 as of June 30, 2024, compared to RMB 749,914,000 as of December 31, 2023, indicating a significant decrease of 52.0%[193].

基础服务发展稳健，社区增值服务毛利率 持续承压 核心观点 公司发布 2024 年中期业绩公告，上半年实现收入 40.3 亿元，同比-1.6%，实现归母净利 润 1.8 亿元，同比+18.9%。 ⚫ 基础服务发展稳健，市拓能力提升。24H1 公司基础物业服务收入达 27.6 亿元，同 比增长 5.7%，主要得益于集团积极开展市场拓展，第三方竞标外拓在管建筑面积提 升。公司积极开展市场拓展，上半年，公司新增第三方外拓合约建筑面积 17.7 百万 方，第三方竞标外拓新增年饱和合同金额为 6.20 亿元，竞标外拓新增项目平均物管 费为 2.3 元/平方米/月，与上年同期持平。截至期末公司合约建筑面积同比-3.9%至 3.33 亿方，在管面积同比-5.3%至 2.47 亿方，从构成上看，来自第三方的合约面积 占比为 77%，业务独立性较强。但由于为了提升项目品质而增加的设备更新投入、 第三方项目及公建项目占比的提升对基础服务毛利率的影响，上半年公司基础服务 毛利率为 20.0%，同比-0.7pcts。 ⚫ 社区增值服务仍待修复，毛利率持续承压。上半年公司社区增值服务实现收入5.9亿 元，同比下降 17.3%，主要是因为 ...

Revenue and Profitability - Revenue for the six months ended June 30, 2024, was RMB 4,031.8 million, a decrease of 1.6% compared to RMB 4,098.1 million in the same period of 2023[2] - Gross profit was RMB 811.5 million, down 5.9% from RMB 862.7 million in the same period of 2023[3] - Operating profit was RMB 252.0 million, a decrease of 6.2% compared to RMB 268.7 million in the same period of 2023[3] - Net profit for the period was RMB 210.8 million, an increase of 3.4% from RMB 203.9 million in the same period of 2023[3] - Basic earnings per share were approximately RMB 7.46, up 17.3% from RMB 6.36 in the same period of 2023[3] - The net profit margin for the first half of 2024 was 5.2%, an increase of 0.2 percentage points compared to the same period last year[13] Property Management Services - Property management services revenue was approximately RMB 2,761.0 million, accounting for about 68.5% of total revenue, representing a year-on-year increase of 5.7%[2] - In the first half of 2024, property management services generated revenue of RMB 2,761.0 million, representing a year-on-year growth of 5.7%[9] - Property management services accounted for 68.5% of total revenue, generating RMB 2,761.0 million, a 5.7% increase from RMB 2,612.6 million in the same period of 2023[39] - The gross profit from property management services was RMB 553.1 million, with a gross profit margin of 20.0%, down from 20.7% in 2023[21] Financial Position - Cash and cash equivalents, including time deposits with maturities over three months, amounted to RMB 4,410.0 million, a decrease of 7.9% from RMB 4,788.3 million as of December 31, 2023[3] - As of June 30, 2024, the group's current assets amounted to RMB 10,737.7 million, an increase of 16.9% from RMB 9,182.5 million as of December 31, 2023[55] - The net current asset value as of June 30, 2024, was RMB 5,323.4 million, with a current ratio of 1.98, up from a net current asset value of RMB 3,938.8 million and a current ratio of 1.75 as of December 31, 2023[55] - Total liabilities increased to RMB 5,414,247 thousand, compared to RMB 5,243,723 thousand as of December 31, 2023, reflecting a rise of 3%[72] Market Expansion and Strategy - The company is focusing on enhancing service quality and customer satisfaction to adapt to the changing market environment and drive growth in property management services[5] - The company aims to strengthen market expansion capabilities, particularly in residential properties, while actively pursuing contract renewals and new project developments[16] - The company has shifted its strategic focus from acquisitions to expanding third-party competitive outreach, including project bidding and market channel expansion[62] Community and Value-Added Services - Community value-added service revenue reached RMB 586.7 million, a decrease of 17.3% compared to RMB 709.3 million in 2023[31] - The company has adjusted its community value-added service development direction to focus on customer needs and enhance service quality[32] - Community asset management services revenue was RMB 113.7 million, a decrease of 20.2% compared to RMB 142.4 million in 2023[34] Employee and Operational Efficiency - Employee headcount decreased to 44,011 as of June 30, 2024, down 4.6% from 46,125 in the same period of 2023[66] - Total employee costs were RMB 1,815.3 million, a reduction of 6.9% from RMB 1,950.5 million in 2023, attributed to organizational optimization[66] - The group plans to enhance management efficiency and optimize project portfolios in the second half of 2024 to improve profit margins[21] ESG and Corporate Governance - In the first half of 2024, the company was upgraded to a BBB rating by MSCI in its ESG assessment, reflecting its commitment to social responsibility[17] - The group has maintained compliance with all applicable corporate governance codes as of June 30, 2024[97] Shareholder and Capital Management - The group expressed gratitude to shareholders and partners for their support amid a volatile capital market and emphasized the commitment to creating more value[18] - The company aims to continue seeking suitable acquisition targets and investment opportunities to promote stable business development and long-term shareholder benefits[58]

Financial Performance - Revenue for 2023 was RMB 8,202,668 thousand, a decrease of 5% compared to RMB 8,636,811 thousand in 2022[6] - Gross profit for 2023 was RMB 1,646,432 thousand, a decrease of 15% compared to RMB 1,942,958 thousand in 2022[6] - Operating profit for 2023 was RMB 343,569 thousand, a significant improvement from an operating loss of RMB 809,789 thousand in 2022[6] - Net profit attributable to equity holders of the company for 2023 was RMB 273,245 thousand, compared to a net loss of RMB 927,120 thousand in 2022[6] - Full-year revenue reached RMB 8,202.7 million, with a gross profit of RMB 1,646.4 million, and core net profit attributable to equity holders of RMB 647.7 million[10] - Net profit margin was 3.9%, and core net profit attributable to equity holders was RMB 647.7 million, with a core net profit margin of 7.9%[23] - Net profit for 2023 was RMB 316,748 thousand, a significant improvement from a net loss of RMB 876,672 thousand in 2022[176] - Total comprehensive income for 2023 was RMB 321,026 thousand, compared to a comprehensive loss of RMB 939,677 thousand in 2022[177] - Basic earnings per share for 2023 were RMB 0.11, compared to a loss per share of RMB 0.38 in 2022[177] - The company reported an annual profit of RMB 273,245 thousand in 2023, compared to a loss of RMB 927,120 thousand in 2022[181] - Total comprehensive income for 2023 was RMB 321,026 thousand, a significant improvement from a loss of RMB 939,677 thousand in 2022[181][182] Assets and Liabilities - Total assets as of 2023 were RMB 14,240,038 thousand, a slight decrease from RMB 14,599,562 thousand in 2022[6] - Current assets as of 2023 were RMB 9,182,539 thousand, a decrease of 1% compared to RMB 9,285,961 thousand in 2022[6] - Current liabilities as of 2023 were RMB 5,243,723 thousand, a decrease of 6% compared to RMB 5,552,777 thousand in 2022[6] - Total equity as of 2023 was RMB 8,646,153 thousand, an increase of 3% compared to RMB 8,367,227 thousand in 2022[6] - Total non-current assets decreased to RMB 5,057,499 thousand in 2023 from RMB 5,313,601 thousand in 2022[178] - Total current assets decreased slightly to RMB 9,182,539 thousand in 2023 from RMB 9,285,961 thousand in 2022[178] - Total current liabilities decreased to RMB 5,243,723 thousand in 2023 from RMB 5,552,777 thousand in 2022[178] - Net current assets increased to RMB 3,938,816 thousand in 2023 from RMB 3,733,184 thousand in 2022[178] - Total assets minus current liabilities decreased slightly to RMB 8,996,315 thousand in 2023 from RMB 9,046,785 thousand in 2022[178] - Total equity increased to RMB 8,646,153 thousand in 2023, up from RMB 8,367,227 thousand in 2022[179] - Non-current liabilities decreased significantly to RMB 350,162 thousand in 2023 from RMB 679,558 thousand in 2022[179] - Retained earnings increased to RMB 938,519 thousand in 2023 from RMB 695,407 thousand in 2022[182] - Non-controlling interests decreased to RMB 729,713 thousand in 2023 from RMB 799,683 thousand in 2022[179] - Share premium decreased slightly to RMB 8,371,502 thousand in 2023 from RMB 8,416,063 thousand in 2022[182] Cash Flow - Net cash flow from operating activities reached RMB 1,030.4 million, a significant improvement compared to the net cash used in operating activities of RMB 1,511.8 million in the same period last year[15] - Operating cash flow from business activities was RMB 1,030.4 million, significantly exceeding net profit, reflecting high-quality development[23] - Operating cash flow from business activities increased to RMB 1,041,582 thousand in 2023, compared to a negative RMB 1,406,160 thousand in 2022[183] - Net cash flow from operating activities improved significantly to RMB 1,030,411 thousand in 2023, from a negative RMB 1,511,825 thousand in 2022[183] - Cash flow from investment activities showed a positive net inflow of RMB 921,376 thousand in 2023, compared to a negative outflow of RMB 2,932,439 thousand in 2022[183] - Cash and cash equivalents increased by RMB 1,480,973 thousand in 2023, a significant improvement from a decrease of RMB 7,535,626 thousand in 2022[183] - Year-end cash and cash equivalents stood at RMB 3,788,300 thousand in 2023, up from RMB 2,307,301 thousand in 2022[183] Property Management Services - Property management service revenue reached a record high of RMB 5,291.9 million, with a five-year compound annual growth rate of 44.9%[11] - Property management services accounted for 64.5% of total revenue and 64.7% of total gross profit, with revenue increasing by 5.0% year-over-year to RMB 5,291.9 million[24][25] - Gross profit margin for property management services decreased by 2.2 percentage points to 20.1% in 2023, primarily due to increased expenses for project management quality improvement[24][25] - Managed building area reached 250.6 million square meters, with 75.4% sourced from third-party developers[26][27] - Contracted building area stood at 332.3 million square meters, with 76.9% sourced from third-party developers[26][27] - Residential projects accounted for 57.0% of managed building area, an increase of 2.9 percentage points from 2022, contributing to higher profit margins and community value-added services[27] - Managed building area decreased to 250.6 million square meters in 2023 from 261.6 million square meters in 2022, with residential properties accounting for 57.0% and non-residential properties for 43.0%[29] - Contracted building area decreased to 332.3 million square meters in 2023 from 341.3 million square meters in 2022, with residential properties accounting for 57.0% and non-residential properties for 43.0%[29] - New contracted building area from third-party bidding increased by 4.0% to 41.7 million square meters in 2023, with an average property management fee of RMB 2.3 per square meter per month, up 4.5% year-over-year[30] Community Value-Added Services - Community value-added service revenue decreased by 19.3% to RMB 1,362.9 million in 2023, with a gross profit decrease of 32.2% to RMB 355.5 million[33] - Community asset management service revenue increased by 19.1% to RMB 280.8 million in 2023, with the number of parking lots increasing from 834 to 983[34] - Smart scene solution revenue decreased by 74.7% to RMB 85.6 million in 2023 due to weakened demand for property intelligent upgrades[35] - Parking asset operation service revenue decreased by 8.8% to RMB 294.6 million in 2023, impacted by reduced demand for parking spaces[35] - Revenue from home decoration services decreased by 33.9% year-on-year to RMB 81.9 million, compared to RMB 123.9 million in the previous year[36] - New retail services revenue dropped by 65.1% year-on-year to RMB 44.6 million, compared to RMB 127.9 million in the previous year[36] - Campus value-added services revenue increased by 3.7% year-on-year to RMB 412.7 million, compared to RMB 397.9 million in the previous year[36] - Elderly care services revenue grew by 15.0% year-on-year to RMB 162.7 million, compared to RMB 141.5 million in the previous year[36] - Non-property owner value-added services revenue decreased by 59.4% year-on-year to RMB 213.1 million, compared to RMB 525.1 million in the previous year[37] - Urban services revenue declined by 3.4% year-on-year to RMB 1,334.8 million, compared to RMB 1,381.4 million in the previous year[38] Expenses and Impairments - Sales and marketing expenses decreased by 41.5% year-on-year to RMB 136.6 million, compared to RMB 233.5 million in the previous year[42] - Administrative expenses decreased by 27.1% year-on-year to RMB 989.5 million, compared to RMB 1,356.5 million in the previous year[43] - Goodwill impairment loss for the year was RMB 15.4 million, a significant decrease of RMB 689.7 million compared to RMB 705.1 million in 2022[45] - Customer relationship impairment loss for the year was RMB 105.9 million, a significant increase of RMB 85.4 million compared to RMB 20.5 million in 2022[45] - Trade receivables and other receivables impairment losses totaled approximately RMB 896,983,000 and RMB 290,109,000 respectively as of December 31, 2023[170] - Goodwill and identifiable intangible assets impairment losses amounted to approximately RMB 720,472,000 and RMB 126,464,000 respectively as of December 31, 2023[171] - The company's trade receivables and other receivables had a book value of approximately RMB 3,209,178,000 and RMB 1,695,067,000 respectively as of December 31, 2023[170] - Goodwill and customer relationships from business combinations were approximately RMB 1,724,909,000 and RMB 730,999,000 respectively as of December 31, 2023[171] Strategic Focus and Digital Transformation - The company focused on digital transformation, improving operational precision and efficiency through platform-based business management tools[18] - The company shifted its strategic focus from acquisitions to third-party market expansion due to the slowdown in the property services industry[60] - The company is focused on organic high-quality development and will be more cautious about mergers and acquisitions due to the downturn in the real estate industry[63] - The company closely monitors foreign exchange and interest rate risks and actively explores hedging solutions with major banks[64] Shareholder and Corporate Governance - The company granted a total of 3,525,446 reward shares under the Share Award Plan on June 19, 2023, and a cumulative total of 7,542,551 reward shares had been granted by December 31, 2023[55] - The net proceeds from the IPO amounted to HKD 5,917.4 million (equivalent to RMB 5,126 million), with 65% allocated for business expansion, 15% for increasing value-added services, 5% for IT system improvements, 5% for talent acquisition, and 10% for working capital[56][57] - As of December 31, 2023, RMB 3,022 million out of RMB 3,332 million allocated for business expansion had been utilized, leaving RMB 310 million unused[57] - The company received net proceeds of approximately HKD 1,735 million from a share placement, with 80% allocated for potential acquisitions, 10% for business expansion, and 10% for working capital[58][59] - As of December 31, 2023, none of the RMB 1,140 million allocated for potential acquisitions had been utilized[60] - The company entered into multiple service agreements with Shimao Group, which were approved at an extraordinary general meeting on March 28, 2023[61] - The company acquired a total of 134 parking spaces and 261 storage units from Shimao Group for a total consideration of approximately RMB 40.66 million[62] - The company had 47,531 employees as of December 31, 2023, a 0.6% increase from 47,260 employees in 2022[65] - Total employee costs decreased by 6.8% to RMB 3,914.4 million in 2023 from RMB 4,199.5 million in 2022[65] - The company did not recommend the payment of a final dividend for the year ended December 31, 2023[68] - The company's charitable donations and other contributions amounted to RMB 538,233 in 2023, compared to RMB 469,803 in 2022[73] - The company's five largest customers and suppliers accounted for less than 30% of total sales and purchases, respectively[72] - The company did not have any significant contingent liabilities as of December 31, 2023[66] - The company's main business includes property management services, community value-added services, non-property owner value-added services, and urban services[67] - The company awarded a total of 3,525,446 shares under the Share Award Scheme during the year[79] - The total number of shares awarded under the Share Award Scheme since its adoption is 7,542,551 shares, representing approximately 0.32% of the company's total issued shares at the adoption date[82] - The number of shares available for future awards under the Share Award Scheme is 63,376,639 shares, representing approximately 2.57% of the company's total issued shares at the reporting date[82] - The fair value of the awarded shares at the grant date was HKD 2.29 per share for the first batch and HKD 1.68 per share for the second batch[80][81] - The weighted average closing price of the shares immediately before the vesting date was HKD 1.51 per share[81] - A total of 997,036 unvested award shares were forfeited during the year[80] - The maximum number of shares that can be awarded under the Share Award Scheme is 70,919,190 shares, representing 3% of the company's total issued shares at the adoption date[78] - 60% of the awarded shares vest 6 months after the grant date, and 40% vest 18 months after the grant date for the first batch[80] - 60% of the awarded shares vest 12 months after the grant date, and 40% vest 24 months after the grant date for the second batch[81] - Best Cosmos Limited holds 1,551,776,591 shares, representing approximately 62.871% of the issued share capital[90] - Gemfair Investments Limited holds 1,583,710,750 shares, representing approximately 64.165% of the issued share capital[90] - Xu Rongmao holds 1,594,567,092 shares, representing approximately 64.605% of the issued share capital[90] - Ye Mingjie holds 4,141,172 shares, representing approximately 0.168% of the issued share capital, including 374,610 unvested shares under the company's share incentive plan[85] - Cao Shiyang holds 829,967 shares, representing approximately 0.034% of the issued share capital, including 224,852 unvested shares under the company's share incentive plan and 22,000 shares held by his spouse[85] - Xu Shitan holds 3,682,198 shares in the company's annual report, representing approximately 0.100% of the issued share capital[86] - Tang Fei holds 1,241,103 shares in the company's annual report, representing approximately 0.033% of the issued share capital[86] - The company's share incentive plan includes unvested shares for directors, such as 119,493 shares for Xu Shitan, 41,518 shares for Ye Mingjie, and 124,003 shares for Tang Fei under the 2011 Shimao Group Share Incentive Plan[87] - Shimao Services (BVI) Limited purchased a total of 9,503,000 shares at a total consideration of approximately HKD 15,909,430.29 (excluding fees) during the year ended December 31, 2023[96] - The total commission payable to the group for property management and related services for the year ended December 31, 2023 was RMB 34 million, not exceeding the annual cap of RMB 236 million[99] - The total parking deposit paid for the year ended December 31, 2023 was RMB 295 million, not exceeding the annual cap of RMB 300 million[99] - The trademark license agreement allows the group to use certain trademarks in China permanently without royalty fees, exempt from reporting, annual review, announcement, and independent shareholder approval requirements[98] - The parking brokerage service agreement with Shimao Group Holdings has an annual commission cap of RMB 236 million, RMB 252 million, and RMB 264 million for the years 2023, 2024, and 2025 respectively[99] - The parking brokerage service agreement has an annual deposit cap of RMB 300 million, RMB 268 million, and RMB 245 million for the years 2023, 2024, and 2025 respectively[99] - The non-compete agreement will automatically terminate if the controlling shareholders no longer directly or indirectly hold 50% or more of the company's voting shares or if the company's shares are no longer listed on the Hong Kong Stock Exchange[93] - The controlling shareholders confirmed compliance with the non-compete agreement and the 2007 non-compete agreement for the year ended December 31, 2023[93] - No directors or their associates were deemed to have interests in businesses directly or indirectly competing with the group's business during the year ended December 31, 2023[94] - The total lease fees payable under the Master Lease Agreement for the year ended December 31, 2023, amounted to RMB 14 million, not exceeding the annual cap of RMB 65 million[100] - The service fees payable under the Master Site Operation Agreement for the year

Core Insights - Shimao Services reported a total revenue of RMB 8.203 billion for 2023, a decrease of 5.0% compared to 2022 [1] - The company achieved a gross profit of RMB 1.646 billion, reflecting a decline of 15.3% year-on-year [1] - The annual profit attributable to equity holders was RMB 2.73 billion, marking a turnaround from a loss [1] Revenue Breakdown - Property management service revenue reached RMB 5.292 billion, accounting for 64.5% of total revenue, with a year-on-year growth of 5.0% [1] - Community value-added service revenue was RMB 1.363 billion, representing 16.6% of total revenue, down 19.3% year-on-year [1] - Non-owner value-added service revenue totaled RMB 213 million, making up 2.6% of total revenue, with a significant decline of 59.4% [1] - Urban service revenue amounted to RMB 1.335 billion, which is 16.3% of total revenue, down 3.4% year-on-year [1] Profitability Metrics - Operating profit was RMB 344 million, indicating a return to profitability [1] - Core net profit attributable to equity holders increased by 29.6% to RMB 647.7 million [1] Operational Scale - As of the end of 2023, Shimao Services provided services for 1,448 projects across various client types, including residential, educational, public buildings, industrial parks, and hospitals [1] - The managed building area reached 250.6 million square meters, while the contracted building area was 332.3 million square meters [1] Cash Position - The company had cash and cash equivalents of RMB 4.788 billion as of the end of 2023, an increase of 2.6% from the end of 2022, primarily due to a net cash inflow from operating activities of RMB 1.03 billion [1]

智通财经APP获悉，2024年3月28日，世茂服务(00873)发布2023年业绩报告。过去一年，世茂服务收入结构持续优 化，盈利质量不断提升。期内，公司实现营业收入82.03亿元，合约面积3.32亿平方米，归母净利润2.73亿元，经营活 动所得现金净额大幅提升至10.30亿元，核心净现比大幅提升至1.45，创历史新高。 【世茂服务2023年全年业绩发布会】 世茂服务管理层表示，2023年是世茂服务高质量发展的第二年，围绕结构调优、合理增速、业务精进、队伍建设四个 关键点，世茂服务在历经行业承压下行回调后积极应对调整，交出了一份成色十足的高质量发展答卷。 核心业务持续增长 经营底盘稳固健康 四大业务板块收入结构持续优化 截至12月31日，世茂服务物业管理服务收入52.92亿元，收入占比提升至64.5%，近5年复合年增长率高达44.9%，为其 他业务发展创造了空间；社区增值服务业务收入13.63亿元，社区增值业务全面渗透住宅场景，单方收入产值显著提 升；非业主增值服务收入2.13亿元，占比2.6%，房地产相关业务收入额及占比持续逐年下降，独立性进一步增强；城 市服务业务收入13.35亿元，毛利率稳步提升至14. ...

Core Insights - Shimao Services (00873) reported a revenue of RMB 8.203 billion for 2023, with a gross profit of RMB 1.646 billion, and a significant turnaround in profit, achieving a net profit attributable to equity holders of RMB 273 million, compared to a loss in the previous year [1] - The core net profit attributable to equity holders increased by 29.6% year-on-year to RMB 648 million, driven by cost optimization and improved operational efficiency [1] Financial Performance - The company achieved an operating profit of approximately RMB 344 million, with basic earnings per share of RMB 0.11 [1] - Cash and cash equivalents, including time deposits with maturities over three months, rose by 2.6% to RMB 4.788 billion as of December 31, 2023, primarily due to a net cash inflow from operating activities of RMB 1.03 billion, significantly exceeding net profit [1] Business Segments - Property management services remain the cornerstone of Shimao Services, with a compound annual growth rate (CAGR) of 44.9% over the past five years [1] - In 2023, property management service revenue reached a record high of RMB 5.292 billion, reflecting a 5.0% year-on-year increase, attributed to an increase in managed building area from Shimao Group and expansion in third-party market areas [1] - As of December 31, 2023, the company managed 1,448 projects across various sectors, including residential, educational, public buildings, industrial parks, and hospitals, with a total managed area of approximately 251 million square meters [1]

Financial Performance - Total revenue for the year 2023 was RMB 8,202.7 million, a decrease of 5.0% compared to RMB 8,636.8 million in the same period of 2022[2]. - The annual profit was RMB 316.7 million, a significant improvement from a loss of RMB 876.7 million in 2022[3]. - Core net profit attributable to equity holders was RMB 647.7 million, up 29.6% from RMB 499.6 million in the same period of 2022[3]. - The company achieved a gross profit of RMB 1,646.4 million, down 15.3% from RMB 1,943.0 million in 2022[2]. - The gross profit margin was 20.1%, while the core net profit margin was 7.9%, maintaining a relatively high level in the industry[8]. - The group's revenue for the year was RMB 8,202.7 million, a decrease of 5.0% compared to RMB 8,636.8 million in the same period of 2022[41]. - The group's gross profit was RMB 1,646.4 million, down 15.3% from RMB 1,943.0 million in 2022, with a gross margin of 20.1%, a decrease of 2.4 percentage points[43]. - The group's annual profit for 2023 reached RMB 316.7 million, a significant improvement compared to a loss of RMB 876.7 million in 2022[53]. - The profit attributable to equity holders was RMB 273.2 million, up from a loss of RMB 927.1 million in the same period of 2022[53]. - The overall comprehensive income for the year was RMB 321.0 million, compared to a loss of RMB 939.7 million in 2022[74]. Revenue Sources - Property management service revenue reached RMB 5,291.9 million, accounting for 64.5% of total revenue, with a year-on-year increase of 5.0%[2]. - Property management services accounted for 64.5% of total revenue, generating RMB 5,291.9 million, a 5.0% increase from RMB 5,042.0 million in 2022[23]. - Community value-added service revenue was RMB 1,362.9 million in 2023, a decrease of 19.3% from RMB 1,688.3 million in 2022[33]. - The total revenue from community value-added services was RMB 442,999 thousand in 2023, up from RMB 414,747 thousand in 2022, marking an increase of about 7%[88]. - The company's urban services revenue was RMB 1,334,775 thousand in 2023, a slight decrease from RMB 1,381,440 thousand in 2022, reflecting a decline of approximately 3%[88]. Operational Efficiency - The net cash generated from operating activities was RMB 1,030.4 million, significantly exceeding net profit, indicating high-quality development[22]. - The company actively terminated projects with lower profit margins and higher management costs, improving the quality and structure of its managed projects[29]. - The company is focusing on enhancing service quality and expanding third-party project development to increase market share[5]. - The company aims to enhance collaboration between internal and external market channels, focusing on environmental integration and solid waste management[19]. - The company is committed to sustainable development and has integrated environmental protection into its business operations, responding actively to national carbon reduction strategies[20]. Strategic Focus - The company established a strategy of "deep cultivation in cities," focusing on 19 key cities, with over 50% of new annual revenue coming from Shandong, Jiangsu, Zhejiang, and Fujian provinces[15]. - Future strategies include expanding residential and non-residential property management services, emphasizing quality and scale[18]. - The company aims to become a leading urban full-scenario lifestyle service provider in China, focusing on comprehensive property management and community living services[17]. - The company plans to explore new property management cooperation models with small and medium-sized real estate enterprises to rapidly increase business scale[19]. - The company has shifted its strategic focus from acquisitions to expanding its market presence through branding, project bidding, and marketing team development due to the overall downturn in the real estate industry[64]. Cost Management - Selling and marketing expenses were RMB 136.6 million, a significant decrease of 41.5% from RMB 233.5 million in 2022, accounting for 1.7% of total revenue[45]. - Administrative expenses decreased by 27.1% to RMB 989.5 million, representing 12.1% of total revenue, down 3.6 percentage points from 2022[46]. - Total employee costs decreased by 6.8% to RMB 3,914.4 million from RMB 4,199.5 million in 2022, attributed to efficiency improvements[70]. - The company aims to enhance operational efficiency and cost control in response to the ongoing downturn in the real estate sector[68]. Asset Management - Cash and cash equivalents amounted to RMB 4,788.3 million, an increase of 2.6% from RMB 4,667.3 million at the end of 2022[3]. - The company's net asset value increased to RMB 8,646,153 thousand, up 3.3% from RMB 8,367,227 thousand in 2022[76]. - The group maintained a current ratio of 1.75, indicating a stable financial position[58]. - The company has a share incentive plan that allows for the granting of up to 3% of the total issued shares as rewards, with 7,542,551 shares granted by December 31, 2023[58]. - The company is currently evaluating the potential impact of adopting the new amendments to the Hong Kong Financial Reporting Standards, with preliminary conclusions suggesting minimal significant impact on the consolidated financial statements[81]. Market Position - The company received multiple accolades, including "Top 1 in China's Property Service Satisfaction" and "Outstanding Supplier of China Mobile," reflecting improved service quality and customer satisfaction[11]. - The company has a diverse customer base, including residential, educational, public construction, industrial parks, and hospitals, providing a wide range of services across 1,448 projects[22]. - The company is focused on expanding its property management services and enhancing community value-added services in China[78]. Challenges and Risks - The company is closely monitoring foreign exchange and interest rate risks, with plans to implement hedging strategies as necessary[69]. - The company is actively seeking suitable acquisition targets and investment opportunities while ensuring prudent use of raised funds to promote sustainable business development and long-term shareholder value[60].

2024年2月23日 公司研究 独立发展能力提升，业务结构持续优化 ——世茂服务（0873.HK）跟踪报告 （要 点 增持（维持） 当 前价：1.10港元 事件：世茂服务发布第三方市场拓展2023年度盘点。 世茂服务官方公众号发布第三方市场拓展 2023 年度盘点，2023 年公司拓展了 多个高质量项目，完成住宅、学校、产业园、政府后勤等全业态板块覆盖，不断 作者 提升深耕城市的项目密度与服务浓度。 分析师：何缅南 执业证书编号：S0930518060006 点评：业务结构持续优化，独立发展能力不断提升，关注盈利能力和现金流管理。 021-52523801 1) 第三方拓展持续领先行业，项目质量不断提升。截至2023年6月30日，公 hemiannan@ebscn.com 司在管面积2.61亿平（第三方面积占比77.1%；住宅面积占比53.2%）；合约 联系人：韦勇强 面积3.46亿平（第三方面积占比77.6%；住宅面积占比55.9%）。2023H1公 021-52523810 司新增加第三方外拓合约面积2640万平，外拓表现持续领先行业；新增项目质 weiyongqiang@ebscn.com 量提升明显， ...

Financial Performance - For the first half of 2023, Shimao Services achieved revenue of RMB 4,098.1 million, with a gross profit of RMB 862.7 million and a core net profit attributable to equity holders of RMB 316.5 million, resulting in a gross margin of 21.1% and a core net profit margin of 7.7%[13]. - The group actively terminated low-margin and high-cost management projects to enhance the quality of its managed projects, supporting long-term management and steady growth[35]. - The company reported a profit of RMB 154,780 thousand for the period, down from RMB 203,946 thousand, indicating a decline of approximately 24%[113]. - The period profit reached RMB 203.9 million, an increase of 9.7% compared to RMB 185.8 million in the same period of 2022[59]. - The profit attributable to equity holders was RMB 154.8 million, up 10.9% from RMB 139.6 million in the same period of 2022[59]. - The company reported a net profit before tax of RMB 284,649 thousand, an increase from RMB 222,071 thousand in the same period last year, representing a growth of approximately 28.2%[109]. - The company’s total comprehensive income for the period was RMB 159,062 thousand, compared to RMB 203,946 thousand in the previous period, indicating a decrease of about 22%[113]. Revenue Breakdown - Property management services accounted for 63.7% of total revenue, generating RMB 2,612.6 million, an 11.5% increase from RMB 2,342.2 million in the same period of 2022[33]. - Community value-added services accounted for 17.3% of total revenue, generating RMB 709.3 million, down 23.8% from RMB 931.0 million in the same period of 2022[42]. - The revenue from community asset management services increased by 22.0% to RMB 142.4 million, compared to RMB 116.7 million in the same period of 2022[43]. - The revenue from smart scene solutions plummeted by 90.7% to RMB 25.7 million, down from RMB 276.8 million in the same period of 2022[45]. - Parking asset operation services saw a revenue increase of 15.5% to RMB 189.0 million, compared to RMB 163.7 million in the same period of 2022[45]. - Elderly care services revenue surged by 45.3% to RMB 71.9 million, up from RMB 49.5 million in the same period of 2022[46]. Cost and Efficiency - The gross profit for property management services was RMB 541.8 million, down 12.1% from RMB 616.3 million in 2022, with a gross margin of 20.7%, a decrease of 5.6 percentage points from 26.3%[34]. - Administrative expense ratio decreased from 15.7% at the end of 2022 to 10.9% in the first half of 2023, and sales and marketing expense ratio fell from 2.7% to 1.5% during the same period, reflecting significant efficiency improvements[23]. - The company added RMB 727.0 million in annual saturated revenue in the first half of 2023, with 55% coming from deepened cities, while marketing expenses as a percentage of annual saturated revenue decreased from an average of 2.0% in 2022 to 1.4% in 2023[21]. Market Expansion and Strategy - The total managed building area reached 260.7 million square meters, while the contracted building area amounted to 346.2 million square meters[13]. - As of June 30, 2023, the contracted building area from third-party market expansion accounted for 39.5% of the total contracted area, reflecting significant growth since 2019[16]. - The company aims to focus on residential property management while enhancing operational capabilities in non-residential and public construction sectors, with plans to supplement quality projects as needed[28]. - The company has shifted its strategic focus from mergers and acquisitions to third-party market expansion due to the overall downturn in the real estate industry, which has slowed growth significantly[69]. Cash Flow and Financial Position - In the first half of 2023, the company achieved a net cash inflow from operating activities of RMB 350.6 million, a significant increase of RMB 2,754.9 million compared to RMB 2,404.3 million in the same period of 2022, resulting in a new high net cash ratio of 1.7[19]. - The company maintained a strong financial position with a current ratio of 1.75 as of June 30, 2023, compared to RMB 3,733.2 million in net current assets as of December 31, 2022[63]. - Cash and cash equivalents rose significantly to RMB 4,075,899 thousand from RMB 2,307,301 thousand, representing an increase of approximately 76.5%[111]. - The company reported a cash inflow from investing activities of RMB 1,592,073 thousand, a recovery from a cash outflow of RMB 416,373 thousand in the previous year[117]. Governance and Management - The company has a strong governance structure with independent non-executive directors providing oversight and strategic guidance[79]. - The management team is composed of experienced professionals with backgrounds in finance, property management, and corporate governance[80]. - The company is committed to maintaining high standards of business ethics and corporate governance to enhance shareholder value and transparency[96]. - The Audit Committee consists of three independent non-executive directors and reviews the company's financial reporting procedures and internal controls[98]. Share Incentive Plan - The company adopted a share incentive plan on June 28, 2021, allowing for a maximum of 3% of the total issued shares (70,919,190 shares) to be granted as rewards[83]. - A total of 3,525,446 shares were granted to selected employees during the six months ended June 30, 2023, with 458,564 shares becoming invalid[83]. - The company’s share incentive plan allows for 60% of the granted shares to vest after 6 months and 40% after 18 months from the grant date[85]. - The company recognized share-based payment expenses of approximately RMB 7,136,000 for the six months ended June 30, 2023, compared to RMB 19,192,000 for the same period in 2022, indicating a decrease of about 62.8%[199].