Shimao Services (873.HK), committed to becoming leading comprehensive city life services provider in China, revenue amounted to RMB 8.64 bn and contracted GFA reached 341.38 mn. 2022

EQS Newswire / 06/04/2023 / 11:26 UTC+8

On March 31, 2023, Shimao Services (873.HK) released its 2022 annual results announcement. During the year, the revenue increased 3.5% to RMB 8.64 billion; contracted GFA and GFA under management surged 10.8% and 8.8% to 341.38 million square meters and 261.55 million square meters respectively.


Changes in the macroeconomic environment, outbreaks of epidemic and profound adjustments in real estate industry conspired in 2022 to inflict a daunting challenge and substantial pressure on property management and resulted in a markable slowdown in the growth of the industry. Against the backdrop of the industrial turmoil, Shimao Services with strategic resolve and practical attitude secured a steady increase in both the revenue and the GFA under management, retaining fundamental strengths for sustainability. Besides, Shimao Services also took the initiative to embrace reforms in the industry. During the reporting period,  third-party projects contributed 77.2% to the  contracted GFA, showing more apparent capacity of independent development.


With a solid and secure operation foundation, make remarkable progress in residence, school, and hospital projects with depth and breadth


Till December 31, Shimao Services recorded revenue of RMB 5.04 billion from property management service, which jumped 20.9% to account for 58.4% of the gross revenue and 58.0% of gross profit. It is thus the centerpiece of the company’s profit mix.


Steady progress in core business sectors is attributable to the construction of user response organization. Since 2021, Shimao Services spared no efforts to build itself into a user response organization with commitment to “With Better Smart Life 100+1, Continuously Exceed Customer Expectations” has claimed the top spot in the rankings of “China Top 100 Enterprises by Satisfaction of Property Management Services” for two consecutive years, and retained an industry leader with 97% retention rate.


Moreover, Shimao Services established superiority on the vertical market by strategically taking the lead in market segments, instead of prioritizing large-scale development. Built on the management strengths of “Zheda SINEW(浙大新宇)”, Top 1 China college Property Management Company, and “Jili Property” specializing in hospital logistic  services for over 20 years, Shimao Services achieved all-round development in college and hospital projects in 2022.


In 2022, Zheda SINEW won bids for various benchmarking projects despite influence of the epidemic, with contract amountup 24.0% to RMB 289.00 million; Jili Property served 30% of Level III Grade A hospitals in Changsha, including all Xiangya hospitals. And college and hospital services of a special nature offer fertile ground for Shimao’s future development of “specialized public building property management” and “scenario-based value-added services”.


Retain market supremacy and maintain business independence, as evidenced by third-party projects accounting for 77.2% of contracted GFA


In 2022, Shimao Services steadily enhanced its management. Its outstanding performance in the centre marketplace has laid a solid foundation for its well-rounded, healthy and sustainable development in the future and demonstrated sound robustness.


During the year, Shimao Services recored contracted GFA of 341.38 million square meters, where its related-party projects and third-party projects accounted for 22.8% and77.2% respectively. Representing 37.9% of new contracted GFA, third-party projects became a largest contributor of GFA. In 2022, newly-added third-party projects reached 40 million square meters, with CAGR of 181.4% over a period of 3 years, from 2019 to 2022. Gaining momentum in expansion, Shimao Services has exhibited mighty capacity of independent development.


Apart from an explosion in the GFA, Shimao Services has ascribed great importance to the value of project portfolios: taking a centralization strategy to focus on its city services, increased the project density per city for reducing costs and increasing efficiency. Till the end of the year, Shimao Services reached contracted GFA of 2.39million square meters per city, further enhancing project density in single city; besides, Shimao Services clustered together high-value projects, with focus on residencial projects and colleges with diversity of value-added services. Shimao’s residential projects and colleges now account for 65.8% of total newly-added contracted GFA in 2022. In response to diversified needs of customers for high-value projects, Shimao is expected to bring its unit area to a new level.


With focus on “user+” traffic operation and profiting in providing community-based value-added services, revenue of elderly care service has increased by nearly 5 times


In terms of value-added services, Shimao Services has adopted the “related diversification strategy”. With emphasis on high-growth “user+” business at customer side, it takes the initiative to explore market-oriented development.


For the development of its “user+” business, Shimao Services always upholds asset-light operation and focuses on new retail business, elderly care services, nursery services and canteen services. It should be noted that nursery services, elderly care services and canteen services , independent of the community-based “external-over-internal” business model, have set a new paradigm with market-based development at a certain level. The elderly care business in particular made great strides in 2022, with revenue increasing nearly 5 times year on year.


In an aging society, “strengthening guarantee on elderly care services” has been gradually listed as a priority in ensuring people’s basic living needs and fostering social undertakings. As property management service providers are probing into “property management service + elderly care service” under national support, Shimao Services acquired Healthtop, an elderly care service brand, for development of elderly care business. A total of 325 community-based service centers and 10 faculties for the elderly have been hitherto under the management of Shimao Services, covering over 300,000 customers in 23 cities.


Driven by “centralization”strategy, canteen services  bundled with residential projects and college had made remarkable performance as well. In 2022, Shimao Services bid won 13 new projects to the lineup of 59 projects serving over 1 million customers in Beijing, Shanghai, Zhejiang and other high-tiered cities.


Define “city butler” as the signature and build multiple benchmarking integrated city management projects, with city services representing 16% of the revenue


Since April 2021, Shimao Services has instantly built up comprehensive capabilities in rendering city services, through cooperation with Shi Lu Yuan(世路源) and Jinshatian(金沙田). In 2022, leveraging supremacy of the two platforms in city services and environmental sanitation, Shimao Services established and expanded its city service network nationwide, especially in developed regions, such as the Yangtze River Delta and Greater Bay Area. By the end of 2022, Shimao Services inked city service contracts in the amount of RMB 6.50 billion, nearly RMB 1.00 billion higher than the prior year. City property management service is now accounting for 16.0% of total revenue, seen as the company’s third contributor of revenue.


In 2022, Shimao Services made headway in implementation of the integrated city management service projects: seizing the opportunity of nurturing “street vendor economy” under government support in the post-epidemic era, Shimao Services played a vital part in the delicacy management of Enshi Street upon exhaustive research on Wuhan policies regarding promotion of commercial consumption. For example, in response to government’s governance demand, the company transformed Enshi Street known as a cluster of restaurants in Ganghua Village, Wuhan into a new local Internet-famous destination. In Nanjing, Shimao Services drew lessons on integrated management of old urban blocks from serving 3 communities, 27 neighborhoods, and around 200 street shops in Xiaguan Street, and applied 1001 butler service therein, receiving consistent high praise from local streets and residents.


City service sector is worthy of attention, where Shimao Services has also accomplished coverage of full industry chain from equipment R&D to service investment and operation. Upstream, Shimao Services boasts a product R&D center, two manufacturing factories and 36 varieties of smart devices, along with over 30 national certificates and over 50 patents. Downstream, Shimao Services, with the defining feature of “city butler”, tailors products for four scenarios, leveraging product power, development power, operation power and organizing power.


Stay true to original pursuit of all-rounded and healthy development under sound momentum of the industry over the long term


Over the past year, Shimao Services propelled by “internal + external” drivers set four sectors in place, took a prime position on the market and deployed resources for key areas. Meanwhile, focused on the main business–property management services, especially residents’ daily life services, the company spared no effort to nurture high-user-stickiness services at customer side, e.g., new retail services, nursery services, elderly care services, or canteen, and built a variety of self-owned leading value-added service brands in China. In doing so, it has cemented the foundation for future sustainable and sound development.


The Management of Shimao Services has a conviction that property management service is still young and strong fundamentals conducive to long-term industrial development will remain unchanged despite fluctuations. Facing a complex and fluid future, Shimao Services in 2023 will remain true to its original mission and foster its own core competitiveness with focus on property management services. It will build up development capabilities and edges in market-based competition while insisting on independent development of business sectors. Taking multi-pronged measures of persisting in delicacy management reforms, deepening post-investment integration management and seeking profits with cash flow return, Shimao Services will put into practice a transition from “balanced development” to “refined development” and seek high-quality development under the guide of sustainable performance objectives.

File: Shimao Services (873.HK), committed to becoming leading comprehensive city life services provider in China, revenue amounted to RMB 8.64 bn and contracted GFA reached 341.38 mn. 2022

06/04/2023 Dissemination of a Financial Press Release, transmitted by EQS News.
The issuer is solely responsible for the content of this announcement.

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