Corporate Social Responsibility and Awards - Onewo Inc. achieved a significant milestone by completing the construction of 100 "Senior Home" service stations, focusing on building senior-friendly communities[6] - Cushman & Wakefield Vanke Service received multiple awards, including the 2023 Contribution Award for Carbon Peaking and Carbon Neutrality and the Facilities Management Team of the Year by RICS China[17] - Onewo was awarded the Best Listed Company for ESG Responsibility Progress Award by Hong Kong Ta Kung Wen Wei Media Group, emphasizing its commitment to corporate social responsibility[18] - The "Jianghan Model" of City Up was awarded the Outstanding Case of Smart City in China of the Year, highlighting Onewo's commitment to urban innovation[18] Digital Transformation and Technology - Onewo's intelligent operation platform was recognized in the Panorama of High-Quality Digital Transformation Products and Services released by the China Academy for Information and Communication Technology[15] - The company published the first large-scale model of the property industry, "Libra Property Committee Workbench," aimed at enhancing community governance through technology[10] - Onewo's "Lingshi Solution" won the third prize in the Digital Transformation Application Competition, reflecting its innovative approach in the digital space[15] - AI is restructuring traditional industry models, although customer preference remains for human interaction[35] - The Group plans to enhance operational efficiency in 2024 through AI technologies and automated processes, aiming to transform traditional command centers[104] Financial Performance - The company's revenue for 2023 reached RMB 33,183,458, an increase of 10.3% from RMB 30,105,803 in 2022[58] - Profit before tax for 2023 was RMB 2,657,821, up 31.5% from RMB 2,020,773 in 2022[58] - The profit for the year attributable to shareholders was RMB 1,954,696, representing a 29.4% increase from RMB 1,511,649 in 2022[58] - The total gross profit for 2023 was RMB 4,811.8 million, with a gross profit margin of 14.5%[113] - The core net profit was RMB 2,339.6 million, representing a year-on-year increase of 29.8%[163] Revenue Growth and Business Segments - Revenue from AIoT and BPaaS solution services was RMB 2,780.6 million, representing an increase of 16.9% compared to RMB 2,378.4 million for the same period in 2022[169] - Revenue from residential property services was RMB 17,002.1 million, an increase of 14.8% year-on-year, accounting for 51.2% of total revenue[116] - Recurring businesses generated revenue of RMB 26,664.8 million, up 14.2% year-on-year, contributing 80.4% of total revenue[114] - The saturated income from contracted residential property projects was RMB 30,663.1 million, a year-on-year increase of 7.0%[118] Operational Efficiency and Cost Management - The management fee rate decreased by 0.9 percentage points, enhancing business efficiency[29] - The administrative expenses ratio decreased by 0.9 percentage points year-on-year, indicating improved operational efficiency[163] - The Group's total cost was RMB 28,371.7 million, representing an increase of 9.6% compared to RMB 25,875.1 million for the same period in 2022, primarily due to business scale growth[174] Market Trends and Challenges - The company is expected to face ongoing challenges in the real estate market, with a projected continuation of the current trends into 2024[61] - More than 70% of residential projects nationwide have a net profit margin of only 5% to 8%, highlighting the industry's long-term business nature with thin profits[73] - The property service sector continues to grapple with the balance between scale expansion and service quality, which remains a critical focus for industry stakeholders[69] Employee Training and Safety Initiatives - The "G4 Action" initiative was launched in Shenzhen, achieving 100% CPR first aid training for all customer-facing service providers and full AED coverage for residential projects[14] - A total of 39,821 employees completed CPR skills training, successfully saving 12 lives[38] - The company installed a total of 2,870 AED facilities as planned, contributing to life-saving efforts[38] Project Development and Expansion - As of December 31, 2023, the Group had built a total of 621 Onewo Towns, with 319 new residential property projects added during the reporting period[75] - The Group committed to invest RMB 170.9 million in transformation funds for smart communities across 104 newly acquired projects, to be gradually utilized within three years[77] - The Group plans to continue promoting the process transformation of no less than 100 Onewo Towns in 2024[81] Asset Management and Financial Position - As of December 31, 2023, the Group had cash and cash equivalents of RMB 15,572.5 million, an increase of RMB 2,227.4 million from RMB 13,345.1 million as of December 31, 2022[185] - The Group had no bank loans or borrowings as of December 31, 2023, resulting in a net cash position, making the net gearing ratio not applicable[185] - The Group's exposure to foreign exchange risk was limited, with non-RMB assets including HKD-denominated assets worth RMB 386.7 million and USD-denominated assets worth RMB 5.7 million[186]

Investment Rating - The report maintains a "Buy" rating for Onewo (02602 HK) and lowers the target price to HKD 27.70, corresponding to a 13.0x P/E ratio for 2024 [3][4]. Core Views - Onewo is progressing steadily with its "Butterfly City" strategy by enhancing its smart technology advantages. The company's performance in 2023 showed balanced growth with a surprising 55% dividend payout ratio. The projected EPS for 2024-2026 is RMB 1.934, RMB 2.247, and RMB 2.623, respectively, with a CAGR of 16.5% from 2023 to 2026 [3][4][6]. Summary by Sections Financial Performance - In 2023, Onewo's total revenue grew by 10.2% year-on-year to RMB 33.183 billion, driven by a 14.2% increase in recurring business revenue to RMB 26.66 billion. The gross profit margin improved to 14.5%, with a net profit of RMB 1.955 billion, reflecting a 29.3% increase [3][4][7]. Strategic Initiatives - The "Butterfly City" strategy has led to a significant increase in efficiency, with the number of Butterfly Cities rising from 584 at the end of 2022 to 621 by the end of 2023. The company has invested over RMB 300 million in process upgrades across 150 Butterfly Cities, resulting in a 4.5% increase in overall efficiency and a 55.5% year-on-year growth in residential property gross profit [4][6]. Dividend Policy - The management announced a final dividend of RMB 0.777 per share, leading to a total dividend payout ratio of 55% for 2023, a significant increase from the previous year's 16%. The dividend payout ratio is expected to remain stable at 55% for 2024 [3][4][6]. Market Positioning - Onewo is actively reducing its reliance on developers by diversifying its client base. In 2023, 65% of new contracts for building maintenance services came from non-developer clients, with a 25.1% year-on-year increase in revenue from this segment [6][7].

Investment Rating - The investment rating for the company is "Outperform the Market" [4][5]. Core Views - The company's revenue for 2023 was 33.184 billion yuan, representing a year-on-year growth of 10.2%. The gross profit was 4.812 billion yuan, up 13.7% year-on-year. The circular business model, which includes community space residential property services, commercial space property and facility management, and BPaaS solutions, generated 26.665 billion yuan in revenue, a 14.2% increase, accounting for 80.4% of total revenue [7][8][9]. - The company has significantly increased shareholder returns, proposing a profit distribution of 55% of core net profit for the year ending December 31, 2023, compared to 16% in 2022. The dividend per share for 2023 is 1.092 yuan, resulting in a dividend yield of 5.94% based on the closing price on March 22, 2024 [4][7][8]. - The company has implemented a strategic focus on three main areas, enhancing its competitive advantage. By the end of 2023, it had established 621 butterfly city bases and completed process transformations for 150 butterfly cities, improving overall efficiency by 4.5% [9][10]. Summary by Sections Financial Performance - In 2023, the company achieved a total revenue of 33.184 billion yuan, with a gross profit of 4.812 billion yuan. The gross margin improved to 14.5%, up 0.4 percentage points from 2022. The circular business model's gross margin was 12.7%, an increase of 1.2 percentage points [7][8][11]. - The net profit for 2022 was 2.036 billion yuan, reflecting a year-on-year growth of 28.3%. The EBITDA was 3.558 billion yuan, up 25.3% [4][7][11]. Business Segments - Community space residential consumption service revenue reached 18.738 billion yuan in 2023, a 13.0% increase, accounting for 56.5% of total revenue. The commercial and urban space comprehensive service revenue was 11.664 billion yuan, growing 4.7% [7][8][11]. - AIoT and BPaaS solution service revenue was 2.781 billion yuan, up 16.9%, contributing 8.4% to total revenue [7][8][11]. Strategic Initiatives - The company has deepened its three strategic focuses, with a notable reduction in reliance on a single client, Vanke, as the revenue share from related transactions decreased to 13.5% in 2023 [9][10]. - The integration of AI technologies has been a key focus, with the deployment of smart platforms enhancing operational efficiency [10][11]. Valuation - The reasonable value range for the company is estimated between 47.36 yuan and 53.21 yuan, based on PE and PS valuations [5][18][24].

[Table_StockInfo] 买入 2024年 03月 23日 （维持） 证券研究报告•2023年年报点评 当前价： 19.88港元 万 物 云（2602.HK） 房地产 目标价： ——港元 蝶城布局持续落地，管理规模稳步增长 投资要点 西南证券研究发展中心 [T ab收le入_S结u构mm持a续ry优] 化，盈利能力稳定提升。2023年公司总收入331.8亿元，同比 [分Ta析bl师e_：Au池th天or惠] 增长 10.2%；毛利 48.1亿元，同比增长 13.7%；毛利率为 14.5%，同比提升 执业证号：S1250522100001 0.4个百分点；其中，2023年循环型业务收入为266.6亿元，同比增长14.2%， 电话：13003109597 占收入比例为80.4%，同比增加了2.8个百分点；2023年公司利润为20.4亿元， 邮箱：cth@swsc.com.cn 增长 28.3%，全年经营活动所得现金流净额为 25.9亿元；核心净利润为 23.4 分析师：刘洋 亿元，较2022年同口径金额增长29.8%。 执业证号：S1250523070005 电话：18019200867  实施多元 ...

2024年3月24日 公司研究 经营效率显著提升，股息率具备吸引力 ——万物云（2602.HK）2023 年度业绩点评 （要 点 买入（维持） 当 前价：19.88港元 事件：公司2023年营收同比+10%，核心净利润同比+30%。 万物云发布 2023 年度业绩公告，实现营收 332 亿元，同比增长 10.2%，毛利 48亿元，同比增长13.7%，毛利率14.5%，同比提升0.4pct；归母净利润19.5 作者 亿元，同比增长 29.4%，核心净利润（剔除无形资产客户关系摊销、非经常性 分析师：何缅南 事项净收益及其相关所得税影响后的利润）23.4 亿元，同比增长 29.8%。公司 执业证书编号：S0930518060006 021-52523801 按照核心净利润的55%进行分红，2023年全年利润分配为每股1.092元人民币。 hemiannan@ebscn.com 点评：经营效率提升，蝶城+科技生态服务网络逐步形成，股息率具备吸引力。 联系人：韦勇强 1) 经营效率显著提升，蝶城+科技生态服务网络逐步形成。2023年公司住宅/ 021-52523810 商业/科技三大板块收入为187/117/28亿元 ...

Investment Rating - The report maintains a "Buy" rating for Onewo Inc. (万物云) [2] Core Views - The company achieved a net profit of 1.95 billion RMB in 2023, a year-on-year increase of 29%, slightly exceeding expectations. The dividend payout ratio is generous at 66% [2] - Onewo Inc. is positioned as an industry-leading space technology service provider, with significant advantages in technology empowerment, residential expansion, and deepening its "Butterfly City" initiative [2] - The report anticipates that the company's performance will enter a growth phase, despite slight downward adjustments to profit forecasts for 2024-2025 due to pressures in the real estate sector [2] Financial Performance Summary - In 2023, the company reported operating revenue of 33.2 billion RMB, a year-on-year increase of 10.2%, with residential property management, commercial city services, and technology business contributing 56%, 35%, and 8% respectively [2][3] - The gross profit was 4.81 billion RMB, up 13.7% year-on-year, with gross profit margins of 14.5% and net profit margins of 5.9%, reflecting increases of 0.4 percentage points and 0.9 percentage points respectively [2] - The company plans to continue enhancing its "Butterfly City" initiative, with a target of improving at least 100 locations in 2024 [2] Revenue and Profit Forecasts - The projected operating revenue for 2024 is 37.2 billion RMB, with a year-on-year growth rate of 12.1% [3] - The net profit forecast for 2024 is 2.26 billion RMB, representing a year-on-year increase of 15.4% [3] - The report includes projections for 2025 and 2026, with expected revenues of 41.98 billion RMB and 47.63 billion RMB respectively, and net profits of 2.59 billion RMB and 2.97 billion RMB [3] Dividend Policy - The company plans to distribute a dividend of 1.092 RMB per share for the year, corresponding to a dividend yield of 6.1% based on the 2023 net profit [2]

Financial Performance - For the year ended December 31, 2023, the total revenue of Onewo Inc. was RMB 33,183.5 million, representing a year-on-year growth of 10.2%[3] - The gross profit for the same period was RMB 4,811.8 million, with a gross margin of 14.5%, an increase of 0.4 percentage points year-on-year[3] - The profit for the year was RMB 2,035.8 million, reflecting a growth of 28.3% compared to the previous year[3] - Core net profit reached RMB 2,339.6 million, which is a 29.8% increase from the fiscal year 2022[3] - The total comprehensive income for the year was RMB 1,937.6 million, an increase from RMB 1,000.98 million in 2022[9] - The company reported a net loss of RMB 98.1 million from equity investments measured at fair value, compared to a loss of RMB 586.6 million in the previous year[9] - The basic and diluted earnings per share for the year were RMB 1.66, compared to RMB 1.40 in the previous year[8] - The company reported a total comprehensive income of RMB (1,081) thousand for 2023, down from RMB 1,157 thousand in 2022[20] - Basic earnings per share for 2023 was RMB 1.66, up 18.6% from RMB 1.40 in 2022[29] Revenue Breakdown - The revenue from circular business was RMB 26,664.8 million, accounting for 80.4% of total revenue, with a year-on-year growth of 14.2%[3] - Community living consumption services generated RMB 18,738,439 thousand in revenue, up from RMB 16,583,191 thousand, reflecting a growth of 13.0%[22] - Revenue from residential property services was RMB 17,002.1 million, up 14.8% year-on-year, contributing 51.2% to total revenue[76] - The company’s cyclical business generated revenue of RMB 26,664.8 million, a year-on-year increase of 14.2%, accounting for 80.4% of total revenue, which is an increase of 2.8 percentage points[101] - Revenue from BPaaS solutions reached RMB 1,363.1 million, growing 37.2% year-over-year, contributing 4.1% to total revenue[85] Cash Flow and Assets - The cash flow from operating activities for the year was RMB 2,586.2 million, with an earnings coverage ratio of 1.3 times[3] - As of December 31, 2023, total assets minus current liabilities amounted to RMB 20,700,558 thousand, an increase from RMB 19,249,441 thousand in 2022, representing a growth of approximately 7.5%[12] - Current assets increased to RMB 24,885,047 thousand from RMB 21,788,788 thousand in 2022, reflecting a growth of approximately 14.4%[10] - Cash and cash equivalents rose significantly to RMB 15,572,483 thousand from RMB 13,345,063 thousand in 2022, a growth of approximately 16.6%[10] - The company’s cash and cash equivalents increased to RMB 15,572.5 million, up RMB 2,227.4 million from RMB 13,345.1 million at the end of 2022[113] Liabilities and Equity - Total current liabilities increased to RMB 18,682,559 thousand from RMB 17,713,544 thousand in 2022, representing an increase of about 5.5%[10] - The company’s non-current liabilities totaled RMB 2,480,317 thousand, an increase from RMB 2,247,937 thousand in 2022, indicating a rise of about 10.3%[12] - The company’s equity attributable to shareholders was RMB 17,605,426 thousand, compared to RMB 16,460,196 thousand in 2022, showing an increase of approximately 6.9%[12] Dividends and Shareholder Returns - The board proposed a profit distribution of RMB 1.092 per share, which is 55% of the core net profit for the year[4] - The company approved a final dividend of RMB 0.777 per share for the year ended December 31, 2023, totaling RMB 916 million, pending shareholder approval[26] - The proposed final dividend for the year ended December 31, 2023, is RMB 0.777 per share, totaling RMB 915.5 million, pending shareholder approval[134] Operational Insights - The company expressed concerns over stock performance and market perception, indicating a need for improved communication with shareholders[44] - The property management industry is expected to face challenges due to a shift from high-margin development services to consumer services based on real estate holdings[45] - The company emphasized the importance of embracing technology and maintaining a customer-centric culture to address potential issues arising from scale growth[45] - Companies must strengthen operational management capabilities to maintain cash flow stability and ensure profitability in a challenging market environment[56] Future Outlook and Strategy - The estimated revenue growth rate for 2023 is projected between 10% to 15%[35] - In 2024, the company plans to implement AI-driven solutions to further enhance operational efficiency and expand service management boundaries[68] - Increased R&D investment is planned to drive technological innovation and enhance market competitiveness in 2024[98] - The company plans to hold its annual general meeting on May 10, 2024[132] Employee and Community Engagement - As of December 31, 2023, the company has 101,284 employees, an increase from 97,930 employees in the previous year, with total employee costs around RMB 11,288.7 million[121] - The company has successfully facilitated the career transition of 2,598 frontline employees into various specialized roles during the reporting period[122] - The company has implemented a "Thousand People Plan" to support 1,000 frontline employees annually in educational advancement, providing scholarships ranging from RMB 5,000 to 7,000[124]

Real Estate Industry Challenges - The real estate development industry continues to face challenges in 2023, with independent development capabilities becoming crucial for success [16]. - The demand for property service providers in higher-tier cities is notably increasing, with many industry players seeking continuous development [18]. - The marketization of property services is gradually improving, leading to a faster development trend in the demand for property service providers [21]. Property Services Market Trends - Urban residents are increasingly prioritizing the quality of living, leading to a higher demand for property services [17]. - The property services market is experiencing significant structural changes, with a growing number of providers competing for clients [18]. - According to CRIC's market research, the owners' committee formation rate in Shanghai reached over 95% in 2021, indicating a trend towards improved property management [18]. Company Strategies and Innovations - The company aims to enhance its competitive edge by focusing on the evolving needs of urban residents and improving service quality [20]. - The company is exploring new strategies to adapt to the changing market dynamics and consumer preferences [20]. - Future outlook includes a commitment to innovation and expansion in response to market demands and competition [20]. Contract and Revenue Growth - The proportion of new property service contracts signed in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen has exceeded 60% in recent years [21]. - The proportion of contracts signed for replacing current property service providers in megacities has exceeded 60%, indicating a growing trend in the market [22]. - The saturated income from new contracts from existing customers amounted to RMB667.8 million, accounting for approximately 32% of the total amount of saturated income from new contracts [62]. Financial Performance - The overall revenue for the six months ended June 30, 2023, was RMB 16,019.7 million, reflecting a growth rate of 12.5% year-on-year [74]. - Revenue from residential property services was RMB8,154.6 million, a 12.2% increase compared to the same period last year, accounting for 50.9% of total revenue [79]. - The Group's recurring businesses achieved revenue of RMB12,775.5 million, representing a 14.5% increase year-over-year, accounting for 79.7% of total revenue [78]. Project Management and Development - During the reporting period, Vanke Service contracted 188 new residential property service projects, generating a saturated income of RMB991.3 million [37]. - The company actively withdrew from 89 low-profitability residential property service projects, resulting in a total saturated income loss of RMB370.7 million [38]. - The company has completed process transformation work in 102 Onewo Towns, passing the acceptance inspection [44]. Technology and Innovation - The demand for technology-enabled residential housing and community services is expected to show significant vitality, driven by changing consumer preferences [25]. - The emergence of new technologies, such as large language models, is accelerating the transformation of labor-intensive industries, improving production efficiency and reducing labor demand [32]. - The company is increasing investment in R&D for the "Lingshi Series" products to enhance space service capabilities through edge computing solutions [129]. Employee Development and Corporate Responsibility - The company has established a training system to provide diverse career paths and learning opportunities for employees [193]. - The "Onewo Dream" Development program has successfully helped 6,693 front line employees transition to other positions since its inception in 2020 [198]. - The company is committed to integrating ESG concepts into its business development to ensure safety and growth for employees and customers [116]. Cash Flow and Financial Position - As of June 30, 2023, the Group had cash and cash equivalents of RMB12,339.9 million, with an improvement in operating net cash flow of RMB750.3 million compared to the same period in 2022 [171]. - The Group had no bank loans or borrowings as of June 30, 2023, resulting in a net cash position, making the net gearing ratio not applicable [172]. - The net proceeds from the Global Offering amounted to approximately RMB5,617.2 million after deducting commissions and related expenses [173].

Performance Highlights [Performance Highlights](index=1&type=section&id=Performance%20Highlights) Vanke Service achieved robust H1 2023 growth, with total revenue up 12.5% to RMB 16.02 billion and profit for the period up 15.7% to RMB 1.05 billion, supported by growth across all business segments Key Financial Indicators for H1 2023 | Indicator | H1 2023 | YoY Growth | | :--- | :--- | :--- | | **Total Revenue** | RMB 16.02 billion | 12.5% | | - Community Space Residential Consumption Services | RMB 9.04 billion | 13.0% | | - Commercial and Urban Space Integrated Services | RMB 5.67 billion | 11.3% | | - AIoT and BPaaS Solutions Services | RMB 1.32 billion | 13.9% | | **Gross Profit** | RMB 2.41 billion | 13.4% | | **Gross Margin** | 15.1% | - | | **Adjusted Gross Margin** | 17.1% | - | | **Profit for the Period** | RMB 1.05 billion | 15.7% | | **EBITDA** | RMB 1.86 billion | 20.4% | | **Earnings Per Share** | RMB 0.85 | - | | **Proposed Interim Dividend** | RMB 0.315 per share | - | - The Butterfly City Strategy progressed smoothly, increasing the total number of Butterfly Cities to **601** and completing efficiency improvements in **150** cities, boosting the gross margin of Community Space Residential Consumption Services by **2.2 percentage points** year-on-year to **14.9%**[2](index=2&type=chunk) Financial Data [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2023, revenue grew 12.5% to RMB 16.02 billion, gross profit increased 13.4% to RMB 2.41 billion, and profit for the period rose 15.7% to RMB 1.05 billion, with basic EPS at RMB 0.85 Summary of Statement of Profit or Loss (For the six months ended June 30) | Item (RMB thousand) | 2023 (Unaudited) | 2022 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 16,019,670 | 14,243,206 | +12.5% | | **Gross Profit** | 2,412,032 | 2,127,243 | +13.4% | | **Profit Before Tax** | 1,399,143 | 1,147,687 | +21.9% | | **Profit for the Period** | 1,049,967 | 907,792 | +15.7% | | **Profit Attributable to Equity Holders of the Company** | 997,733 | 873,596 | +14.2% | | **Basic and Diluted Earnings Per Share (RMB)** | 0.85 | 0.83 | +2.4% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets were RMB 36.65 billion, total liabilities RMB 19.16 billion, and net assets RMB 17.49 billion, up 2.8% from 2022 year-end, maintaining a net cash position Summary of Statement of Financial Position | Item (RMB thousand) | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | Change | | :--- | :--- | :--- | :--- | | **Total Non-current Assets** | 14,358,435 | 15,174,197 | -5.4% | | **Total Current Assets** | 22,293,017 | 21,788,788 | +2.3% | | **Total Assets** | 36,651,452 | 36,962,985 | -0.8% | | **Total Current Liabilities** | 16,924,672 | 17,713,544 | -4.5% | | **Total Non-current Liabilities** | 2,240,580 | 2,247,937 | -0.3% | | **Total Liabilities** | 19,165,252 | 19,961,481 | -4.0% | | **Net Assets** | 17,486,200 | 17,001,504 | +2.8% | | **Total Equity** | 17,486,200 | 17,001,504 | +2.8% | [Summary of Notes to the Financial Statements](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Information%20Notes) This section details financial statement preparation, accounting policy changes, segment data, and asset/liability breakdowns, noting the adoption of IAS 12 amendments and the company's single operating segment management in China - The company adopted amendments to **IAS 12**, which narrowed the scope of initial recognition exemptions, requiring recognition of deferred tax assets and liabilities for transactions like leases, and restated comparative financial data[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - Management reviews the business's operating performance as a **single operating segment**, primarily providing Community Space Residential Consumption Services, Commercial and Urban Space Integrated Services, and AIoT and BPaaS Solutions Services in China[17](index=17&type=chunk) Revenue by Service Category (For the six months ended June 30) | Service Category (RMB thousand) | 2023 | 2022 | | :--- | :--- | :--- | | **Community Space Residential Consumption Services** | 9,035,753 | 7,994,605 | | **Commercial and Urban Space Integrated Services** | 5,667,506 | 5,093,148 | | **AIoT and BPaaS Solutions** | 1,316,411 | 1,155,453 | | **Total** | **16,019,670** | **14,243,206** | - The Board recommended an interim dividend of **RMB 0.315 per ordinary share** (tax inclusive) for the six months ended June 30, 2023, totaling approximately **RMB 372 million**[24](index=24&type=chunk) Management Discussion and Analysis [Industry and Strategy Review](index=18&type=section&id=Industry%20and%20Strategy%20Review) The company navigated real estate pressures by focusing on the existing property market, leveraging industry trends in residential renewals and integrated facility management, and advancing its 'Butterfly City,' 'Customer Diversification,' and 'Technology' strategies - Industry trends show rapid growth in demand for renewal of existing residential projects, especially in first-tier cities; significant outsourcing demand for integrated facility management services from commercial clients; and new technologies like **AI large models** accelerating the transformation of labor-intensive industries[36](index=36&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Butterfly City Strategy: As of June 30, 2023, **601 Butterfly Cities** were deployed nationwide, with process improvements completed in **150** cities, leading to a gross margin increase of over **4 percentage points** for basic residential property management in these improved cities[41](index=41&type=chunk)[42](index=42&type=chunk) - Customer Diversification Strategy: WMY Lianghang brand successfully partnered with nearly **20 Fortune Global and China 500 companies**, with new contract saturated revenue from existing clients reaching **RMB 668 million**, accounting for approximately **32%** of total new contract saturated revenue[38](index=38&type=chunk)[45](index=45&type=chunk) - Technology Strategy: Enhanced internal operational efficiency through self-developed equipment and enabled smart city services with technology for external revenue growth. BPaaS Solutions Services revenue grew **48.0%** year-on-year to **RMB 647 million**[46](index=46&type=chunk)[47](index=47&type=chunk) [Business Review](index=23&type=section&id=Business%20Review) All three business segments grew, with Community Space Residential Consumption Services revenue up 13.0% and gross margin at 14.9%, Commercial and Urban Space Integrated Services up 11.3%, and AIoT and BPaaS Solutions Services up 13.9%, with recurring business contributing 79.7% of revenue Revenue and Gross Profit by Business Segment (For the six months ended June 30) | Business Segment | Revenue (RMB million) | Revenue YoY Growth | Gross Profit (RMB million) | Gross Margin | | :--- | :--- | :--- | :--- | :--- | | **Community Space Residential Consumption Services** | 9,035.8 | 13.0% | 1,348.5 | 14.9% | | **Commercial and Urban Space Integrated Services** | 5,667.5 | 11.3% | 636.0 | 11.2% | | **AIoT and BPaaS Solutions Services** | 1,316.4 | 13.9% | 427.5 | 32.5% | | **Total** | **16,019.7** | **12.5%** | **2,412.0** | **15.1%** | - Recurring business (including residential property, property facility management, BPaaS) achieved steady growth, with revenue reaching **RMB 12.78 billion** during the reporting period, a **14.5%** year-on-year increase, accounting for **79.7%** of total revenue; gross profit reached **RMB 1.66 billion**, up **21.1%** year-on-year[52](index=52&type=chunk) - Residential property services benefited from the Butterfly City Strategy, with gross margin increasing by **2.1 percentage points**. The number of managed residential projects grew to **3,586**[53](index=53&type=chunk) - AIoT Solutions business was impacted by the real estate development industry, with revenue from developers declining, but revenue from other clients increased from **RMB 82.8 million** to **RMB 298.5 million**, indicating a successful transformation of the client structure[63](index=63&type=chunk) [Future Outlook](index=29&type=section&id=Future%20Outlook) The company will continue to integrate ESG principles, build core capabilities around 'AI Life,' 'AI Growth,' 'AI Environment,' and 'AI Community,' and leverage technology, including the 'Zhu Zhe'er' APP and AI large models, to enhance spatial efficiency and service experience - The company integrates **ESG principles** into its corporate culture, promoting four special initiatives: popularizing first-aid skills (**AI Life**), supporting frontline employee growth (**AI Growth**), promoting waste sorting and energy conservation (**AI Environment**), and participating in old community renewal (**AI Community**)[66](index=66&type=chunk)[67](index=67&type=chunk) - Technologically, the company will build a community service internet platform using the **'Zhu Zhe'er' APP** as a portal and iterate and optimize its **'Ling Shi series'** core spatial intelligence products[67](index=67&type=chunk) - The company will seize the opportunity of **AI large models**, exploring their integration with business scenarios such as work order dispatch, smart monitoring, and intelligent property management to enhance efficiency and service quality[68](index=68&type=chunk) [Financial Review](index=31&type=section&id=Financial%20Review) In H1 2023, the company maintained a healthy financial position with optimized revenue structure, recurring business at nearly 80%, gross margin up 0.7 percentage points, effective expense control, and strong cash flow with no bank loans - Revenue structure optimized, with recurring business revenue accounting for **79.7%** and its gross margin at **13.0%**, a year-on-year increase of **0.7 percentage points**[69](index=69&type=chunk) - Expense efficiency improved, with sales and distribution expenses as a percentage of revenue remaining flat, and administrative expenses as a percentage of revenue decreasing from **6.7%** to **6.2%**[81](index=81&type=chunk)[82](index=82&type=chunk) - Adjusted profit for the period (excluding amortization of intangible assets from M&A and deferred tax) was **RMB 1.31 billion**, a year-on-year increase of **16.1%**[84](index=84&type=chunk) - As of June 30, 2023, the company had **no bank loans or borrowings**, maintaining a **net cash position**, with cash and cash equivalents totaling **RMB 12.34 billion**[86](index=86&type=chunk)[87](index=87&type=chunk) [Corporate Governance and Other Information](index=35&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers significant investments, employee policies, corporate governance, and dividend arrangements, noting no major M&A, employee development programs, and the combined Chairman and CEO role, with an interim dividend proposed and a scrip dividend option for H-share shareholders - As of June 30, 2023, the Group had **97,294 employees**, with total staff costs of approximately **RMB 5.67 billion** during the reporting period. The company supports frontline employees' career transitions and development through programs like **'Wan Zi Qian Hong'**[89](index=89&type=chunk)[91](index=91&type=chunk) - The company deviates from **Code Provision C.2.1** of the Corporate Governance Code, as the roles of Chairman and CEO are not separated, both held by Mr. Zhu Baoquan. The Board believes this arrangement enhances decision-making efficiency and provides consistent leadership[95](index=95&type=chunk) - The Board recommended an interim dividend of **RMB 0.315 per share** (tax inclusive) and plans to offer a **scrip dividend option** to H-share shareholders[99](index=99&type=chunk)

Corporate Initiatives and Developments - Onewo Inc. launched the "Elevator Care Fund" on January 1, resulting in a 57.14% reduction in elevator entrapment incidents within one year[5]. - The company completed service assurance tasks for the 2022 Winter Olympics venues, ensuring project delivery and participating in the establishment of service standards[9]. - The "Pineapple No. 1" service was launched in 12 communities in Shenzhen and Wuhan on April 15, aimed at providing 24/7 one-stop solutions for residents[13]. - Onewo Inc. was listed on the Hong Kong Stock Exchange on September 29, marking a new starting point for greater development opportunities[23]. - The company signed the "Residential Property Service Initiative" with three other major property brands on November 21, promoting sustainable development and transparency in services[27]. - The company introduced a new work order aggregation system on October 10, significantly improving work order processing efficiency and user experience[25]. - Onewo Inc. was awarded the top position in the "China Property Service 315 Satisfaction Survey" by Leju Finance[32]. - The company participated in the CVPR 2022 Workshop, winning a bronze medal in the Image Matching Challenge[32]. - The company aims to enhance community governance through the "Street + Community" integrated operation model, addressing residents' urgent needs[18]. - Onewo Inc. is focusing on urban governance transformation and public value enhancement through its research on old community renewal strategies[29]. Financial Performance - In 2022, the company achieved revenue of RMB 64.0 billion from third-party property and facility management services, accounting for 84.8% of total revenue[39]. - The company's revenue for 2022 reached RMB 30,105,803 thousand, a 27.5% increase from RMB 23,704,539 thousand in 2021[61]. - The pre-tax profit for 2022 was RMB 2,020,773 thousand, down 12.9% from RMB 2,320,009 thousand in 2021[61]. - The net profit attributable to the parent company was RMB 1,510,490 thousand in 2022, a decrease of 9.4% compared to RMB 1,667,642 thousand in 2021[61]. - The total revenue for the year was RMB 30.11 billion, marking a growth of 27.0% compared to RMB 23.70 billion in the previous year[89]. - The total cost of the group for the year ended December 31, 2022, was RMB 25,875.1 million, an increase of 31.4% compared to RMB 19,684.5 million for the same period in 2021[124]. - The group's gross profit for the year ended December 31, 2022, was RMB 4,230.8 million, a 5.2% increase from RMB 4,020.0 million in 2021, with a gross margin of 14.1%, down 2.9 percentage points from 17.0% in 2021[125]. - The net profit for the year decreased by 7.5% to RMB 1,586.1 million in 2022 from RMB 1,714.3 million in 2021, while EBITDA grew by 7.6% to RMB 2,840.6 million[134]. Revenue Streams and Growth - The AIoT solutions generated revenue of RMB 1.38 billion, a year-on-year increase of 13.9%, with a gross profit of RMB 420 million, up 41.2%, resulting in a gross margin of 30.7%[42]. - The BPaaS solutions realized revenue of RMB 990 million, a year-on-year increase of 56.7%, contributing a gross profit of RMB 330 million, up 29.5%, with a gross margin of 32.9%[42]. - The company achieved a signed contract amount of RMB 210 million in 31 pilot cities for its renovation business, representing a year-on-year growth of 118.8% with a customer satisfaction rate exceeding 90%[77]. - Revenue from residential property services was RMB 14,810.7 million, up 30.3% year-on-year, contributing RMB 1,458.9 million in gross profit, a 15.3% increase[94]. - Revenue from property and facility management services was RMB 7,544.9 million, a 42.7% increase year-on-year, with gross profit of RMB 917.2 million, up 26.4%[99]. - Revenue from AIoT solutions reached RMB 1,384.9 million, growing 13.9% year-over-year and accounting for 4.6% of total revenue, with a gross profit margin of 30.7%[105]. - Revenue from community space residential consumption services rose by 26.0% to RMB 16,583.2 million, driven by an increase in managed properties and customer numbers[119]. - Revenue from commercial and urban space comprehensive services grew by 28.2% to RMB 11,144.2 million, attributed to an increase in project numbers and customer diversification[120]. Strategic Goals and Future Plans - The company plans to pilot over 100 "Butterfly Cities" in 2023, continuing to explore and iterate on its industry interconnection ecosystem[46]. - The company plans to continue expanding its market presence, particularly in high-value projects, leveraging its competitive advantages in complex integrated facilities[99]. - The company aims to seek new business development opportunities in line with its strategic goals[199]. - The company plans to complete the construction of 300 "Butterfly Cities" by 2025, which is expected to transform the property management industry in China[114]. - The company is focusing on market expansion and has plans to enter new regions in 2023[172]. - The company has set a revenue growth target of 15% for the upcoming fiscal year[172]. - The company is exploring potential mergers and acquisitions to enhance its service offerings[172]. Corporate Governance and Management - The company has a diverse board of directors, including independent non-executive directors, ensuring robust corporate governance[58]. - The company has engaged Ernst & Young as its auditor, ensuring compliance with international financial reporting standards[60]. - The board includes independent directors with extensive experience in various industries, enhancing corporate governance[164]. - The company emphasizes the importance of independent opinions in its operational and management strategies[162]. - The company continues to strengthen its leadership team with experienced professionals from various sectors[165]. Operational Efficiency and Cost Management - The company has implemented new strategies to improve operational efficiency, aiming for a 10% reduction in costs[172]. - Selling and distribution expenses rose by 75.1% to RMB 450.3 million in 2022 from RMB 257.2 million in 2021, driven by increased marketing costs to maintain revenue growth and enter new markets[131]. - Administrative expenses increased by 20.2% to RMB 2,153.5 million in 2022 from RMB 1,791.8 million in 2021, attributed to business expansion and increased R&D investments[132]. Research and Development - Research and development investment reached RMB 410 million, accounting for 1.4% of total revenue, contributing to a technology revenue of RMB 2.38 billion, which grew by 28.5% year-on-year, generating a gross profit of RMB 751 million[78]. - The company has established a new research and development center to foster innovation in technology[172]. - The company is investing in new product development, particularly in cloud space technology services[172]. Cash Position and Financial Health - Cash and cash equivalents as of December 31, 2022, were RMB 13,345.1 million, up from RMB 6,430.6 million at the end of 2021, primarily due to fundraising activities and operating cash inflows[140]. - The group had no bank loans or borrowings as of December 31, 2022, resulting in a net cash position with a net debt ratio of not applicable[141]. - The group has limited exposure to foreign exchange risks, with no significant impact on operating performance from RMB exchange rate fluctuations[144].