Core Viewpoint - Aolian Services is an independent provider of business and urban space services as well as community living services, primarily operating in Guangdong Province, China. The company has diversified its revenue sources since its establishment in 2010 and has expanded its footprint to 25 provinces in China. Business Overview - Aolian Services ranks 11th and 8th among the top 100 independent property management service providers in China by total revenue and net profit, respectively, in 2025. It ranks 48th among the top 100 property service companies in China based on comprehensive strength [4]. - The company's services are divided into two main categories: business and urban space services, and community living services. Business and urban space services include property and facility management services and municipal management services, while community living services encompass basic residential property management and community value-added services [4]. Financial Performance - Revenue from business and urban space services for 2022, 2023, and 2024 was approximately RMB 247 million, RMB 302 million, and RMB 307 million, contributing 72.2%, 70.1%, and 64.6% of total revenue, respectively [4]. - The company's total revenue for 2022, 2023, 2024, and the seven months ending July 31, 2025, was approximately RMB 342 million, RMB 431 million, RMB 475 million, and RMB 293 million, respectively. Net profits for the same periods were approximately RMB 27 million, RMB 34 million, RMB 44 million, and RMB 27 million [7][8]. Profitability Metrics - The gross margin for business and urban space services remained relatively stable at 8.3% and 8.0% for 2022 and 2023, respectively, before increasing to 11.7% in 2024. The gross margin further improved from 10.5% for the seven months ending July 31, 2024, to 14.6% for the seven months ending July 31, 2025, primarily due to improved margins from commercial projects [5]. - The gross margin for community living services was relatively stable, recorded at 30.1%, 30.1%, 30.6%, 25.5%, and 29.5% for the respective periods [5].

Investment Rating - The report maintains a "Buy" rating for the company [6] Core Views - The company reported a revenue of 8.5 billion yuan for H1 2025, representing a year-on-year increase of 6.5%, with a net profit attributable to shareholders of 2.03 billion yuan, up 7.4% year-on-year [1] - The shopping center operations showed strong performance, with a gross profit margin increase to 78.7%, up 6.2 percentage points year-on-year, driven by a retail sales growth of 21.1% [2] - The property management segment experienced stable growth, with property management revenue increasing by 8.8% to 3.5 billion yuan, despite a decline in value-added services [3] - The company declared an interim and special dividend totaling 0.881 yuan per share, representing a generous payout ratio of 100% of core net profit attributable to shareholders [3] Summary by Sections Financial Performance - For H1 2025, the company achieved a revenue of 8.5 billion yuan, with a gross profit of 3.17 billion yuan and a gross margin of 37.1%, which is an increase of 3.1 percentage points year-on-year [1] - The company’s operating profit grew by 20.2% to 2.63 billion yuan [3] Business Segments - The commercial segment generated revenue of 3.27 billion yuan, up 14.6% year-on-year, while the property segment's revenue was 5.16 billion yuan, a modest increase of 1.1% [1] - The shopping center business achieved a revenue of 2.26 billion yuan, reflecting a growth of 19.8% year-on-year, with a gross profit of 1.78 billion yuan, up 30.0% [2] Future Outlook - The company forecasts net profits attributable to shareholders of 3.99 billion yuan, 4.46 billion yuan, and 5.00 billion yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 22, 19, and 17 [4][5]

Core Viewpoint - The company reported a net profit growth of 5.3% YoY in 1H25, aligning with market expectations for mid-single-digit growth, driven by resilient basic property management (PM) growth and strong third-party expansion [1] Group 1: Financial Performance - Total revenue increased by 6.6% YoY, with basic PM revenue growing by 13.1% YoY, supported by third-party projects and commercial/office projects [1] - Third-party expansion contracts rose by 17.2% YoY to RMB 1.4 billion, with residential and commercial/office segments growing by 32.2% and 18.7% YoY, respectively [1] - Non-owner value-added services (VAS) revenue decreased by 16.1% YoY, primarily due to challenges faced by developers, while community VAS revenue fell by 3.7% YoY [1] Group 2: Basic PM Insights - Basic PM segment revenue rose by 13.1% YoY in 1H25, driven by third-party projects (revenue +19.9% YoY) and commercial/office projects (revenue +29.8% YoY) [2] - The average PM fee increased to RMB 2.47/sq.m/month in 1H25 from RMB 2.33 in 1H24, indicating a decline in fee collection rates [2] - The company plans to implement targeted initiatives to address the challenges posed by local fee caps and higher vacancy rates [2] Group 3: Operational Efficiency - The company achieved efficiency gains with SG&A expenses dropping by 9.1% YoY, resulting in a 0.9ppt reduction in the SG&A ratio [3] - However, a 6.8ppt YoY decline in gross margin from non-owner VAS negatively impacted the overall gross margin, which decreased by 1.1ppt YoY [3] - The net profit margin slightly decreased by 0.1ppt YoY to 10.6% in 1H25, and the company maintained its no-interim-dividend policy, which disappointed some investors [3] Group 4: Investment Outlook - The company maintains a BUY rating and has raised the target price by 2% to HK$54.91, reflecting adjustments in earnings estimates [4]