Summary: Revenue, profit, scale and independence have grown steadily.
Source/Leju Finance Xu Jiumian
Hong Kong, March 29, 2024 - (ACN Newswire) - 22 years ago, Hehong Services quietly took root in Beijing. After 18 years of development, it officially landed on the Hong Kong Stock Exchange in July 2019, becoming the 14th in the country , the first property service company in North China to enter the Hong Kong capital market.
In the next two or three years, with the help of fundraising in the capital market and the accumulation of brand reputation over the years, Hehong Services made great strides. It made "small but refined" acquisitions and competed for high-quality targets in parallel, laying out the national horse racing and encircling the country. It has formed its own key regional competitiveness in the southwest region and achieved rapid growth in performance.
In the downturn of the real estate industry, Hehong Services has been guided by the strategic policy of "Four Perseverances" of unswervingly adhering to the three-year development plan, unwaveringly adhering to the foundation of service quality, unwaveringly adhering to the development line of the whole committee, and unwaveringly adhering to the principle of benefit sharing. Next, we will fight the three major battles of "quality, expansion and value-added" and achieve impressive results in 2023, with sustained and steady growth in operating income, profitability and management scale.
The financial report shows that as of December 31, 2023, Hehong Services achieved total revenue of approximately 1.313 billion yuan, a year-on-year increase of 26.1%; during the same period, it recorded a gross profit of approximately 336 million yuan, a year-on-year increase of 13.9%; net profit was approximately 114 million yuan, A year-on-year increase of 10.1%; net profit attributable to shareholders was approximately 78 million yuan, a year-on-year increase of 13.4%.
In terms of scale, as of December 31, 2023, Hehong Services has 335 projects under management, with a total construction area under management of approximately 55.8 million square meters, a year-on-year increase of 8.6%; the number of contracted projects is 359, with a total contracted construction area of approximately 64.7 million square meters, a year-on-year increase of 3.7%.
Solid progress and steady improvement in performance
In 2023, Hehong Service's property management services and community value-added services will achieve revenue of 987 million yuan and 254 million yuan respectively, accounting for approximately 75.2% and 19.3% of the total revenue respectively. It is worth mentioning that during the major downturn in real estate, property companies in related industries have been deeply affected. However, in the past year, Hehong Service’s property management services and community value-added service revenue increased by 26.7% and 43.7% year-on-year respectively.
In terms of property management services, in 2023 Hehong Services will improve the owner experience by improving the "Five Service System" and strengthening the implementation of quality inspections; combined with digital technology, it will analyze the needs of owners through big data and artificial intelligence to provide precise services ; At the same time, smart security systems are used to enhance the safety of community management and enhance owner satisfaction and sense of belonging.
In terms of community value-added services, Hehong Services has established a diverse community value-added service system based on the needs of owners and residents, and will achieve leapfrog growth in 2023. During the performance period, Hehong Services made it clear that the "housing and car" business is the core of value-added services, and created a housing butler service system with the theme of housing and focusing on the needs of owners such as house replacement, leasing, decoration, and home renewal; as well as car-based services The theme is a car butler service system that focuses on car care, maintenance, repair and other needs.
Deeply cultivate the southwest market and steadily increase independence
The business scope of Hehong Services covers six regions: North China, Northeast China, East China, Central China, Southwest China and South China. As of December 31, 2023, the geographical coverage of its property management projects has expanded to 42 cities in 17 provinces and municipalities in China.
In the territory of Hehong Services, the southwest region accounts for the highest proportion. As of the end of 2023, the construction area under management in the southwest region was approximately 29.561 million square meters, accounting for 53.0% of the total construction area under management; the property management revenue contributed during the year was approximately It was 546 million yuan, accounting for 55.2% of the total property management revenue.
After going public in 2019, Hehong Services acquired many high-quality targets in Guizhou, Sichuan and Chongqing. Last year, the group established a new operating headquarters in Chengdu, taking Hehong Service's core strategy of laying out the southwest region a step further. Relying on the solid economic foundation and huge potential of the property market in southwestern provinces, we will focus on market expansion business.
Through capital cooperation, third-party market bidding, brand export, strategic alliances and other methods, Hehong Services is further strengthening the advantages of the southwest region and increasing the density of the southwest region. In 2023, Hehong Services optimized its business processes and incentive system, improved its market expansion and post-expansion evaluation system, signed more than 60 new projects, and the saturated revenue from contracted projects was approximately 200 million yuan.
In terms of service formats, Hehong's services mainly focus on residential communities. In recent years, Hehong has been continuously exploring new fields and business models to improve its professional service capabilities in segmented tracks and create diversified business formats. In 2023, the construction area under management of Hehong's residential properties and non-residential properties will be approximately 52.275 million square meters and 3.490 million square meters respectively, and the property management income contributed by each will be approximately 873 million yuan and 114 million yuan respectively.
In terms of independence, as of December 31, 2023, the construction areas under management of Hehong Services from other property developers and related parties were 46.955 million square meters and 8.810 million square meters respectively, accounting for 84.2% and 15.8% respectively; During the same period, their respective property management service revenue contributions were 776 million yuan and 211 million yuan, accounting for 78.6% and 21.4% of the property management segment revenue respectively. Over 80% of the construction area under management comes from third parties, and nearly 80% of the property management revenue is contributed by third parties. The independence of Hehong's services has been further enhanced.
Performance jumps four times in a row, high-quality attributes highlighted
In the context of continued pressure on real estate, property companies have been affected by related real estate. The revenue of some property companies has been reversed, and profitability has also become a problem. Even companies that have achieved outstanding performance in the past have successively handed over net profits or even suffered losses in recent years. transcript. Zhonghehong Services, a listed logistics company, has maintained continuous profit growth and achieved four consecutive jumps in performance since its listing, which is a very difficult achievement.
At the beginning of its listing in 2019, Hehong Services' revenue was approximately 248 million yuan. In 2023, revenue reached 1.313 billion yuan, growing for four consecutive years with a growth rate of 429.0%; net profit increased from 14 million yuan in 2019 to 2023 of 114 million yuan, an increase of 727.5%.
In terms of profitability, in 2023, Hehong Services' overall gross profit margin will be approximately 25.6%, and its net profit margin will be approximately 8.7%. Specific to property management services and community value-added services, the gross profit margins last year were approximately 22.1% and 38.9% respectively.
In 2024, the real estate industry will continue to undergo in-depth research, and the changes in the property management industry will continue. The outstanding results achieved by Hehong Services in 2023 have laid a good foundation for future growth and development. Facing the future, Hehong Services will continue to focus on the three major battles of "quality, expansion and value-added", and I believe there will be more good results.