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宋都服务(09608) - 2020 - 年度财报
SUNDY SERVICESUNDY SERVICE(HK:09608)2021-04-29 10:48

Financial Highlights This section provides a concise overview of the company's financial performance, assets, and liabilities over recent fiscal years Performance Summary Company's 2020 revenue increased by 15.4% year-on-year to RMB 257 million, but profit for the year decreased by 6.8% year-on-year to RMB 32.85 million, with gross profit margin rising to 30.3% while net profit margin declined to 12.8% Historical Performance Summary (For the year ended December 31) | Metric | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue (RMB thousand) | 83,960 | 132,950 | 222,474 | 256,703 | | Revenue YoY Growth Rate | N/A | 58.3% | 67.3% | 15.4% | | Gross Profit (RMB thousand) | 24,975 | 37,576 | 64,869 | 77,858 | | Gross Profit Margin | 29.7% | 28.3% | 29.2% | 30.3% | | Profit for the Year (RMB thousand) | 13,965 | 20,889 | 35,236 | 32,852 | | Profit Margin | 16.6% | 15.7% | 15.8% | 12.8% | Assets and Liabilities Summary As of end-2020, total assets increased to RMB 281 million, total liabilities were RMB 164 million, cash and cash equivalents significantly increased to RMB 192 million, and current ratio improved from 1.44 to 1.54, indicating good liquidity and a net cash position Historical Assets and Liabilities Summary (As at December 31) | Metric | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | | Total Assets (RMB thousand) | 102,495 | 170,689 | 215,658 | 281,161 | | Total Liabilities (RMB thousand) | 76,713 | 162,798 | 131,719 | 163,888 | | Cash and Cash Equivalents (RMB thousand) | 68,546 | 65,864 | 137,559 | 192,195 | | Total Equity attributable to Owners of the Company (RMB thousand) | 25,782 | 7,891 | 83,345 | 115,995 | | Current Ratio | 1.51 | 0.85 | 1.44 | 1.54 | - Gearing ratio is not applicable as the company maintained a net cash position from 2017 to 202031 Chairman's Statement The Chairman's Statement reviews 2020 achievements and challenges, highlighting the successful listing on HKEX in January 2021, raising approximately HKD 133.2 million net proceeds, business expansion, COVID-19 community prevention contributions, and future growth plans under favorable policies Business Development and Listing The company successfully listed on January 18, 2021, raising approximately HKD 133.2 million net proceeds, while business grew steadily with GFA under management reaching 8.2 million sq.m., a 39.0% year-on-year increase, and total contracted GFA reaching 11.3 million sq.m., alongside active national expansion and diversified project types - The company listed on the Main Board of the Stock Exchange of Hong Kong on January 18, 2021, raising net proceeds of approximately HKD 133.2 million35 - As at December 31, 2020, the Group's GFA under management reached 8.2 million sq.m., a 39.0% year-on-year increase; total contracted GFA reached 11.3 million sq.m.35 COVID-19 Response and Social Responsibility During the 2020 COVID-19 pandemic, the company responded swiftly, undertaking community prevention responsibilities, especially in the complex Caihe Street Future Community project, achieving "zero suspected, zero confirmed, zero unmanaged" prevention results, and earning the "Anti-Epidemic Pioneer" title - The company was awarded the "Anti-Epidemic Pioneer" title for its outstanding contributions during the pandemic, achieving "three zeros" (zero suspected, zero confirmed, zero unmanaged) in the complex environment of 36 old residential communities with over 80,000 permanent residents under its management36 Policy Opportunities and Future Outlook The report notes that the "Notice on Strengthening and Improving Residential Property Management" issued by ten ministries and commissions at the end of 2020 brings policy benefits to the industry, and the company will seize opportunities to focus on old community renovation, mergers and acquisitions, smart property, and "property services + lifestyle services" models to achieve scale and brand operation, creating greater returns for shareholders - The company will closely follow policies, actively participate in future community development and old community renovation, and establish business characteristics3839 - The company plans to develop property service applications, explore the "property services + lifestyle services" model, linking online platforms with offline value-added services to seek new business growth points38 Management Discussion and Analysis This section provides a detailed review of the company's operational performance, financial results, and strategic outlook for the reporting period Performance Review As a well-known comprehensive property management service provider in Zhejiang Province, the company ranked 56th among China's Top 100 Property Service Enterprises in 2020, managing 46 properties in 17 cities with total GFA under management increasing by 37.9% to 8.2 million sq.m., and total revenue for FY2020 growing by 15.4% to RMB 257 million, primarily from four business lines Changes in GFA Under Management and Number of Projects | Metric | December 31, 2019 | December 31, 2020 | | :--- | :--- | :--- | | GFA under Management (thousand sq.m.) | 5,948 | 8,152 | | Number of Projects under Management | 29 | 46 | Revenue Composition for FY2019-2020 (RMB thousand) | Business Line | 2019 | % of Total Revenue | 2020 | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 95,659 | 43.0% | 128,183 | 49.9% | | Non-owner Value-added Services | 51,548 | 23.2% | 69,129 | 26.9% | | Community Value-added Services | 54,587 | 24.5% | 42,462 | 16.6% | | Other Businesses | 20,680 | 9.3% | 16,929 | 6.6% | | Total | 222,474 | 100.0% | 256,703 | 100.0% | Property Management Services As a core business, property management service revenue increased by 34.0% year-on-year to RMB 128 million, accounting for 49.9% of total revenue, driven by an increase in managed projects and business expansion, with significant progress in reducing reliance on related parties as revenue from independent third-party developers surged by 378.8% year-on-year - Revenue from residential property management services increased by 44.2% from RMB 59.0 million in FY2019 to RMB 85.1 million in FY202046 - Property management revenue from properties developed by independent third parties significantly increased by 378.8% from RMB 8.0 million in FY2019 to RMB 38.3 million in FY202046 Property Management Revenue and GFA Under Management by Developer Type | Developer Type | 2020 Revenue (RMB thousand) | 2020 GFA Under Management (thousand sq.m.) | 2019 Revenue (RMB thousand) | 2019 GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Songdu Co., Ltd. Group | 89,919 | 4,797 | 87,695 | 3,352 | | Independent Third Parties | 38,264 | 3,355 | 7,964 | 2,596 | Non-owner Value-added Services This business, primarily providing consulting and sales assistance services to real estate developers, served as an important growth engine, with revenue increasing by 34.2% year-on-year to RMB 69.1 million, and the company securing 19 reserve projects totaling 3.1 million sq.m. and 5 new projects from independent third-party developers by year-end - Revenue from non-owner value-added services increased by 34.2% from RMB 51.5 million in FY2019 to RMB 69.1 million in FY202052 Community Value-added Services Community value-added services revenue was RMB 42.5 million, a 22.2% year-on-year decrease, mainly due to reduced demand for standardized rough-house renovation services as the Zhejiang Provincial Government encouraged delivery of fitted-out homes, prompting the company to transform this business by developing online applications and upgrading management systems - Revenue from community value-added services decreased by 22.2% from RMB 54.6 million in FY2019 to RMB 42.5 million in FY202064 - The company has established a centralized back-end control center and collaborated with software companies to develop lifestyle service applications to upgrade value-added service management and expand service offerings53 Other Businesses Other businesses, including hotel and long-term rental apartments, generated total revenue of RMB 16.9 million, an 18.4% year-on-year decrease, with hotel business revenue at RMB 15.0 million primarily impacted by the pandemic, and the company adjusting its long-term rental apartment business model towards a lighter-asset, centralized management service - Hotel business FY2020 revenue was RMB 15.0 million, and long-term rental apartment business revenue was RMB 1.9 million5657 - The decrease in other business revenue was primarily attributable to fewer hotel customers due to the pandemic64 Future Outlook The company's future focus will be on four strategic directions: deepening presence in the Yangtze River Delta, seizing opportunities from government-driven future community and old community renovation, leveraging advanced technology to create smart communities, and expanding community value-added service types to meet diverse customer needs - The company plans to expand its management scale and brand value in old community renovation by participating in government-driven future community pilot projects5860 - The company plans to leverage advanced technology to create smart communities and expand value-added services such as renovation, maintenance, and housekeeping, with this business expected to continue growing5960 Financial Review In FY2020, total revenue increased by 15.4% year-on-year to RMB 257 million, gross profit grew by 20.0% to RMB 77.9 million, and gross profit margin improved by 1.1 percentage points to 30.3%, while profit before tax and profit for the year decreased by 6.5% due to a significant increase in listing expenses, though adjusted net profit increased by 12.9% year-on-year, with robust financial health reflected in cash and cash equivalents growing by 39.7% to RMB 192 million and current ratio improving to 1.54 Key Financial Indicators for FY2019-2020 (RMB million) | Metric | 2019 FY | 2020 FY | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 222.5 | 256.7 | +15.4% | | Gross Profit | 64.9 | 77.9 | +20.0% | | Gross Profit Margin | 29.2% | 30.3% | +1.1 ppt | | Administrative Expenses | 19.2 | 36.2 | +88.5% | | Of which: Listing Expenses | 8.7 | 19.0 | +118.4% | | Profit for the Year | 35.2 | 32.9 | -6.5% | | Adjusted Net Profit (excluding listing expenses) | 41.7 | 47.1 | +12.9% | Liquidity Indicators (As at December 31) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | Cash and Cash Equivalents (RMB million) | 137.6 | 192.2 | | Current Ratio | 1.44 | 1.54 | Human Resources and Other Disclosures As of end-2020, the Group employed 694 staff with staff costs of RMB 55.3 million, faced limited foreign exchange risk from HKD-denominated listing proceeds, and the Board did not recommend a final dividend for 2020, with the company completing its IPO on January 18, 2021, and experiencing executive director changes on March 1 post-reporting period - As at December 31, 2020, the Group employed a total of 694 staff, with staff costs of RMB 55.3 million93 - The Board did not recommend the payment of any final dividend for the year ended December 31, 202097 - Net proceeds from the listing of approximately HKD 133.2 million are planned for acquisition investments (48%), future community services (12%), smart community construction (15%), community value-added services (15%), and working capital (10%); as of the reporting date, only 8.3% of the working capital portion had been utilized105 Directors and Senior Management This section details the personal resumes of the company's Board members and senior management, including executive directors, independent non-executive directors, and the chief financial officer, covering their age, positions, responsibilities, educational backgrounds, and professional experience in property management, real estate, finance, and law Directors' Report This report provides an overview of the company's business, financial performance, corporate governance, and other key disclosures for the reporting period Business and Financial Overview This section outlines the company's main businesses, including property management, non-owner value-added services, community value-added services, and other businesses, confirming the successful global offering on January 18, 2021, reiterating no recommendation for a final dividend for 2020, and mentioning the company's dividend policy, environmental policy, and providing a financial summary for the past four fiscal years - The company listed on the Main Board of the Stock Exchange of Hong Kong on January 18, 2021, issuing 800 million shares and raising net proceeds of approximately HKD 133.2 million146 - The Board did not recommend the payment of any final dividend for the year ended December 31, 2020150 Major Customers and Suppliers The report discloses that in 2020, sales to the top five customers accounted for 54.8% of total revenue, an increase from 42.4% in 2019, indicating higher customer concentration, with the largest customer, Songdu Holdings Group, contributing 36.2% of revenue, while supplier concentration was lower, with purchases from the top five suppliers accounting for 25.9% of total purchases Customer and Supplier Concentration | Concentration Metric | 2019 | 2020 | | :--- | :--- | :--- | | Top 5 Customers as % of Total Revenue | 42.4% | 54.8% | | Largest Customer as % of Total Revenue | 35.7% | 36.2% | | Top 5 Suppliers as % of Total Purchases | 27.5% | 25.9% | | Largest Supplier as % of Total Purchases | 8.1% | 8.8% | Directors and Equity Structure This section lists the Board members during and up to the reporting date, confirming the independence of independent non-executive directors, and details major shareholders' holdings, with controlling shareholder Mr. Yu Jianwu holding a total of 71.25% of the company's equity through trusts and holding companies - As at December 31, 2020, controlling shareholder Mr. Yu Jianwu held 2,280,000,000 shares, representing 71.25% of the total share capital, through a trust (trustee being CMB Wing Lung Trust) and his controlled entities (Shunji Group, Songdu Heyi)194 Share Option Scheme and Non-Competition Undertaking The company adopted a share option scheme on December 21, 2020, to incentivize and retain qualified participants, with a scheme limit of 10% of total issued shares post-listing, though no share options were granted as of the reporting date, and controlling shareholder Mr. Yu and Songdu Heyi entered into a non-competition undertaking to protect the Group from potential business competition - The company adopted a share option scheme on December 21, 2020, but no share options were granted, exercised, or cancelled from the listing date to the reporting date197203 - Controlling shareholder Mr. Yu and Songdu Heyi entered into a non-competition undertaking, committing that they and their close associates will not engage in restricted businesses that compete with the Group's business210211 Continuing Connected Transactions This section details the Group's continuing connected transactions with related parties, primarily Songdu Co., Ltd. Group, including property leasing, property management services, and non-owner and community value-added services, confirming all transactions were within annual caps and reviewed by independent non-executive directors Actual Amounts and Annual Caps of Major Continuing Connected Transactions for 2020 (RMB thousand) | Transaction Type | Counterparty | Annual Cap | Actual Transaction Amount | | :--- | :--- | :--- | :--- | | Property Lease (Group as Lessee) | Songdu Co., Ltd. Group | 4,450 | 2,890 | | Property Management Services (Group as Service Provider) | Songdu Co., Ltd. Group | 22,000 | 21,906 | | | Zhizhonghe Group | 1,670 | 1,598 | | | Songdu Sunshine Kindergarten | 70 | 36 | | Value-added and Other Services (Group as Service Provider) | Songdu Co., Ltd. Group | 70,300 | 69,313 | Corporate Governance Report This report details the company's corporate governance practices, including board structure, committee functions, and risk management, ensuring compliance with relevant codes and regulations Board Structure and Operation At the end of the reporting period, the Board comprised four executive directors and three independent non-executive directors, meeting listing rules for independent non-executive director numbers and proportion, with the company confirming compliance with the Corporate Governance Code and separating the roles of Chairman and CEO to ensure clear responsibilities, and disclosing Board meeting attendance since listing - From the listing date to the reporting date, the company has complied with all applicable code provisions under the Corporate Governance Code247 - The roles of Chairman and Chief Executive Officer are held by different individuals (Ms. Yu Yun and Ms. Zhu Jin), complying with the Corporate Governance Code requirements257 Board Committees The company established Audit, Remuneration, and Nomination Board Committees, with the Audit and Remuneration Committees composed entirely of independent non-executive directors, and the Nomination Committee having a majority of independent non-executive directors, all committee chairpersons being independent non-executive directors, and their terms of reference complying with the Corporate Governance Code, ensuring independence and professionalism in corporate governance - The Audit Committee comprises three independent non-executive directors, with Mr. Liu Guohui as Chairman, possessing the required accounting and relevant financial management expertise267 - The Remuneration Committee comprises three independent non-executive directors, with Mr. Zhang Jingzhong as Chairman270 - The Nomination Committee comprises the Board Chairman Ms. Yu Yun and three independent non-executive directors, with Ms. Yu Yun as Chairman275 Risk Management and Internal Control The Board confirms its ultimate responsibility for establishing and maintaining sound risk management and internal control systems, and has authorized the Audit Committee for continuous oversight, having reviewed the effectiveness of the Group's internal control and risk management systems, covering financial, operational, and compliance controls, and deemed them effective and appropriate - The Board confirms its responsibility to ensure the establishment and maintenance of sound risk management and internal control systems and has conducted an annual review of their effectiveness289 - For the purpose of listing, the Board has reviewed the effectiveness of the Group's internal control systems and considers them effective and appropriate in terms of financial, operational, and compliance controls291 Independent Auditor's Report This report, issued by KPMG, provides an unqualified opinion on the company's consolidated financial statements for the year ended December 31, 2020, confirming they present a true and fair view of the Group's financial position, performance, and cash flows, and were properly prepared in accordance with International Financial Reporting Standards, identifying "Expected Credit Loss Provision for Trade Receivables" as a key audit matter Audit Opinion KPMG, the auditor, believes that the consolidated financial statements present a true and fair view of the Group's consolidated financial position as at December 31, 2020, and its financial performance and cash flows for the year then ended, and have been properly prepared in accordance with International Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance - The auditor issued an unqualified opinion on the consolidated financial statements304 Key Audit Matters The auditor identified "Expected Credit Loss Provision for Trade Receivables" as a key audit matter due to the significant management judgment and subjectivity involved in its recognition, and the material impact of trade receivables balance on the financial statements, with total trade receivables from third parties at RMB 29.0 million and an expected credit loss provision of RMB 7.9 million as of end-2020 - The key audit matter is "Expected Credit Loss Provision for Trade Receivables" due to significant management judgment involved in its recognition and the materiality of the balance307311 Consolidated Financial Statements and Notes This section presents the Group's audited core financial statements for the year ended December 31, 2020, along with detailed explanatory notes, providing a comprehensive view of the company's financial performance, position, and cash flows Key Financial Statements This section contains the Group's audited core financial statements for the year ended December 31, 2020, including the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, and Consolidated Statement of Cash Flows, which comprehensively reflect the company's financial performance, financial position, and cash flow situation Key Data from Consolidated Statement of Profit or Loss for FY2020 (RMB thousand) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | Revenue | 222,474 | 256,703 | | Gross Profit | 64,869 | 77,858 | | Operating Profit | 45,066 | 42,407 | | Profit Before Tax | 46,516 | 43,524 | | Profit for the Year | 35,236 | 32,852 | | Profit attributable to Owners of the Company | 35,142 | 32,658 | Key Data from Consolidated Statement of Financial Position as at End-2020 (RMB thousand) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | Total Assets | 215,658 | 281,161 | | Non-current Assets | 30,769 | 28,641 | | Current Assets | 184,889 | 252,520 | | Total Liabilities | 131,719 | 163,888 | | Current Liabilities | 128,263 | 163,880 | | Non-current Liabilities | 3,456 | 8 | | Total Equity | 83,939 | 117,273 | | Equity attributable to Owners of the Company | 83,345 | 115,995 | Notes to Financial Statements The notes to financial statements provide detailed explanations and supplementary information for key financial statement items, including revenue and segment reporting (Note 3), trade and other receivables (Note 16), and significant related party transactions (Note 27) - Note 3(b) discloses that the Group primarily operates in China, with all revenue and non-current assets located in China, and businesses are divided into three reportable segments: property management services and related value-added services, hotel business services, and long-term rental apartment business468475 - Note 16 discloses that as at end-2020, net trade receivables amounted to RMB 29.7 million, of which RMB 8.55 million was from related parties and RMB 21.15 million from third parties528530 - Note 27 details significant transactions with entities controlled by the controlling shareholder (e.g., Songdu Co., Ltd. Group), including RMB 21.91 million in property management service revenue, RMB 49.02 million in non-owner value-added service revenue, and RMB 2.89 million in variable lease payments607612