EQS Newswire / 01/09/2022 / 16:10 UTC+8
Shimao Services recorded revenue of RMB4,265.7 million with contracted GFA increased to 333.1 million sq. m.
On 31 August 2022, Shimao Services (873.HK) released the interim results of 2022. In the first half of 2022, Shimao Services recorded revenue of RMB4,265.7 million, representing a year-on-year increase of 12.9%. Gross profit was RMB1,113.6million and profit attributable to equity holders of the Company was RMB139.6 million.
Due to the downturn in the real estate industry, coupled with the impacts of the recurring COVID-19 pandemic, the property services industry faced certain challenges and difficulties. Shimao Services remained diligent yet progressive and achieved steady growth in total revenue and gross floor area (“GFA”) under management. Riding on its solid foundation, new businesses such as city services have developed rapidly and became the third largest business segment of the Company.
Solid fundamentals: steady growth in revenue from property management services which laid a sound foundation
As at 30 June 2022, Shimao Services’ contracted GFA was 333.1 million sq.m., representing a year-on-year increase of 39.3%. GFA under management amounted to 255.9 sq.m., representing a year-on-year increase of 46.2%. There were 915 projects under management in 98 cities nationwide, covering a wide variety of clients, including residential properties, universities and colleges, hospitals, public facilities and industrial parks.
During the period under review, Shimao Services achieved steady growth in both the GFA under management and contracted GFA, laying a foundation for the development of the Company’s various businesses, which was able to contribute to the revenue from property management services directly.
In terms of revenue and its contribution, Shimao Services established a solid foundation. In the first half of 2022, due to the increase in projects under management, revenue from property management services amounted to RMB2,342.2 million, representing a year-on-year increase of 16.3% and accounting for 54.9% of overall revenue. The steady growth of the revenue from the property management services has laid a sound foundation for future development.
The revenue structure was further optimized. In the first half of 2022, revenue from value-added services to non-property owners amounted to RMB321.6 million, of which its revenue contribution decreased year-on-year to 7.5%, showcasing the reliance on the parent of the Company continued to decrease. In addition, revenue from city services amounted to RMB671.0 million, representing a year-on-year increase of 400.0% and accounting for 15.8% of revenue, which exceeded the contribution from the value-added services to non-property owners business and became the third largest source of revenue and profit for Shimao Services. This indicated that the business strategies of city services have begun to bear fruits.
New-added contract GFA from expansion was 30.6 million sq.m., showcasing the effectiveness of the execution plans in key cities
With the downturn in the real estate industry, Shimao Services focused more on the organic growth in face of the industry challenges and market competition. Yet, the Company still achieved an excellent result from expansion.
In the first half of 2022, Shimao Services added 30.6 million sq.m. to its contracted GFA, representing an increase of 12.9% year-on-year. The Company continued its expansion into the residential sector, with new residential projects accounting for 51.7% of contracted area, which acquired more people and space for the development of the value-added services. Among the contracted GFA in the new non-residential projects, universities and colleges projects accounted for 32.8%, signifying the integration of Shimao Services with Zheda Sinew.
In terms of expansion in universities and colleges, there was a total of 45 newly-added property management services projects with newly-added contracted GFA of 5.7 million sq.m. The Company won a number of benchmark universities and colleges projects with high contract amount and strong demonstration effect, such as the Beijing University of Chinese Medicine Liangxiang and Heping Street Campus Projects, Xi’an Jiaotong-Liverpool University Taicang Campus Project, Beijing Language and Culture University and Jiangxi University of Finance and Economics. The regional companies of Shimao Services worked closely with Zheda Sinew to explore new markets such as Henan and Guangdong and successfully won the tender of a number of quality university and college projects.
Shimao Services continued to implement centralisation strategies to explore the key cities and increased its management efforts and business coverage to strengthen the regional comprehensive capabilities. This will not only allow the Company to reduce cost and enhance efficiency, but will also create more opportunities for market expansion and value-added services.
As at 30 June 2022, the total contracted GFA of the top four branches in first-tier key cities including Hangzhou, Fuzhou, Wuhan and Tianjin, reached 67.1 million sq.m. Taking Hangzhou branch as an example, the contracted GFA further increased to 21.6 million sq.m. from 15.4 million sq.m. at the end of 2021, making it the city with the highest project coverage and service density.
Revenue from city services increased by 4 times, becoming the third largest source of revenue and profit
After cooperating with leading municipal sanitation enterprises such as Jinshatian Technology, Shimao Services immediately carried out organisational integration, business consolidation and operational enhancement. Through the integration and improvement in 2021, Shimao Services quickly developed its comprehensive capabilities in city services and is equipped with management foundation and talent pool to promote its business nationwide.
Leveraging the dominant position of enterprises such as Jinshatian Technology in the city services and sanitation sector, together with the rapid expansion capability of the city servicse, Shimao Services has been expanding its market share while executing the Company’s development strategy to promptly expand and strengthen its city services business.
In the first half of 2022, Shimao Services had 33 newly-added city services projects, with an aggregate winning bid amount up to RMB 1,051.8 million. It had obtained a number of large-scale city services projects worth of over RMB100 million. In particular,
the total contract amount of the Urban and Rural Integrated Environmental Sanitation Services Projects of Lantian County and Yang County were RMB348.0 million RMB and RMB122.0 million respectively. The contract amount of Urban Environmental Sanitation Operation Market-Oriented Services Project of Jinhaihu New District in Bijie, Guizhou was RMB119.6 million.
In addition, riding on the expansion of 15 sample cities such as Sucheng District of Suqian City, Acheng District of Harbin City, Shimao Services’ city services continued to promote nationwide. Since 2022, Shimao Services has independently expanded several comprehensive city services projects and successfully tapped into Wuhan Enshi Street, Suzhou Guo Xiang Street, Xi’an Nan Yuan Men Street, Jiashan Gui Gu Zhi Zao Town. Shimao Services also made business breakthroughs in comprehensive city management as well as the construction and operation of smart car parking space and will continue to empower a better city life.
Shimao Services has begun exploring the city services since 2020. Upon the first anniversary of its IPO on 29 October 2021, Shimao Services officially introduced its city services business and positioned itself as a “city manager” with a system to promote the research and development of city services. It is also committed to realizing the development vision of “making the city better with services”. In order to better promote the city services business, Shimao Services has established the City Services Business Development Center, Space Manager and other professional city services companies.
Prospects of the property services industry remain positive, Shimao Services adheres to being diligent and strives for long-term development
Since 2022, Shimao Services has remained committed to the brand philosophy of “Better Smart Life”. The Company will continue to promote the construction of benchmark projects, adhering to the idea of “Better 100+1 Better Life, Services Beyond Satisfaction,” and paying more attention to business quality and the needs of property owners. The Company will build a variety of service systems in residential projects, universities and colleges, hospitals, public facilities, industrial parks and city services to empower a more pleasurable living environment and city upgrade. With its high quality services, Shimao Services was awarded the “TOP 1 Property Services Satisfaction in the First Half of 2022”.
In the opinion of Shimao Services’ management team, despite the property services industry is facing certain challenges and difficulties, opportunities coexist with challenges. As one of the life services industries, its customer base is diversifying and the business foundation is still expanding. The property services industry is still a vas blue ocean and maintains the long-term development trend.
Shimao Services will maintain its strategic focus, positioning itself as a leading comprehensive property management and community living service provider in China, and committed to becoming a leading full-scenario provider of city life services in China. Shimao Services developed its four business portfolios and continuously refined its three business portfolio, namely comprehensive property management services, diversified value-added services and city services, with appropriate innovative development in digital and intelligent technology business.
Going forward, Shimao Services will remain persistent and practical while striving for long-term development. It will further enhance its operational capability, consolidate its front-line foundation, refine its management procedure, improve its business quality, and explore more intrinsic value, so as to achieve steady and high-quality development.
01/09/2022 Dissemination of a Financial Press Release, transmitted by EQS Group via SEAPRWire.com.
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