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Public company info - Greentown Service Group Co. Ltd. , 02869.HK
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Greentown Service Group Co. Ltd., 02869.HK - Company Profile
Chairman Li Hairong
Share Issued (share) 3,223,000,000
Par Currency Hong Kong Dollar
Par Value 1.0E-5
Industry Property Management & Agency
Corporate Profile Business Summary: The Company is principally engaged in the provision of residential property management services in the PRC, which include three types of services: property services, consulting services and community living services. Performance for the year: Revenue was RMB8,581.9 million. Compared with that of the year of 2018, which was RMB6,709.9 million, the growth rate on year-on-year basis reached 27.9%. Gross profit has reached RMB1,547.1 million, a growth of 29.2% compared with RMB1,197.7 million in 2018. Gross profit margin was 18.0%, increased by 0.2 percentage points compared with the year of 2018. Profit from operations was RMB643.8 million, representing a growth of 24.7% compared with RMB516.2 million for the year of 2018; the adjusted profit from operations (excluding equity-settled share-based payment expenses) was RMB706.6 million, representing an increase of 30.2% compared with 2018 (excluding equitysettled share-based payment expenses). Profit for the year was RMB472.4 million with an increase of 1.4% compared with RMB 465.7 million during the year of 2018; the adjusted profit (excluding equitysettled share-based payment expenses and after tax impact) for the year was RMB519.5 million, representing an increase of 7% compared with the year of 2018 (excluding equity-settled share-based payment expenses and after tax impact). Net profit margin for the year was 5.5%, a decrease of 1.4 percentage points compared with 6.9% in 2018. Adjusted net profit margin for the year (excluding equity-settled share-based payment expenses and after tax impact) was 6.1%, which decreased 1.2 percentage points from 7.2% (excluding equity-settled share-based payment expenses and after tax impact) in the year of 2018. Business Review Property Services — accounting for 63.5% of total revenue, and 40.1% of total gross profit Property services are the Group’s largest revenue and margin source. The Group has been mainly adopting the overall rationing system for service charging. Based on the Group's management experience and cost control capability over the past 20 years, property services provide the Group with stable revenue and profit, as well as good reputation, and is the cornerstone of the Group’s implementation of its living services strategy. Throughout 2019: Revenue reached RMB5,452.0 million, an increase of 22.2% compared with RMB4,460.7 million in the year of 2018. As the revenue base of property services continues to increase, the growth of this segment is expected to stabilize in the future. Gross profit reached RMB619.9 million, up 22.3% from RMB507.0 million in 2018 compared to the year of 2018. Gross profit margin was 11.4% in line with that of in 2018. The managed GFA reached 212.4 million square meters, an increase of 24.6% compared with 170.4 million square meters in 2018, or net increase of 42.0 million square meters, net increased by 28.2 million square meters compared with 184.2 million square meters in the interim period of 2019. The Group not only pays attention to the increase of management area, but also focus on the improvement of service quality and the acquisition of more highquality projects. The Group optimizes the project portfolio constantly, improve the service experience of the property owners, but also bring about the increase of the proportion of property service fee and the expansion of brand effect, which brings strong internal impetus for the continuous growth of performance. Reserve area, as an important source of the future management area, reached a new height during the year, at 233.2 million square meters, an increase of 21.4% compared with 192.1 million square meters in 2018, or a net increase of 41.1 million square meters. This was the sixth consecutive year that the Group’s reserve area was higher than the managed GFA, greatly increasing certainty of the Group’s future stable growth. managed projects reached 1,454, covering 147 cities in 29 provinces, municipalities and autonomous regions in China. Community living services — accounting for 22.3% of the Group's total revenue, and 33.5% of the Group's total gross profit During the year, the community living service continues to grow and has gained revenue of RMB1,912.8 million, an increase of 46.0% compared with RMB1,309.8 million in 2018. Among them, (1)The community products and services (accounting for 28.3% of the community living service income): in 2019, the annual revenue reached RMB541.5 million, a year-on-year increase of 123.9% compared with RMB241.9 million in 2018. (2)Home living services (accounting for 6.1% of the community living service income): in 2019, the annual revenue reached RMB116.2 million, an increase of 37.7% compared with RMB84.4 million in 2018. (3)Community space services (accounting for 10.7% of the community living service income): in 2019, the annual revenue reached RMB203.7 million, a decrease of 10.9%, compared with RMB228.7 million in 2018. (4)Property asset management services (accounting for 44.9% of the income from community living services): in 2019, the revenue reached RMB859.6 million, increasing by 19.5% compared with RMB719.0 million in the year of 2018. (5)Cultural and education services (accounting for 10.0% of the income from the community living services): in 2019, the revenue reached RMB191.7 million, an increase of 436.3% compared with RMB35.7 million in the year of 2018. Community living services offer systematic product and service solutions for all life service scenes of property owners throughout the life cycle of real estate. They are an extension of property services and an important part of the Group's strategic vision of being a “happy living service provider”. During the year, by deepening the Group's research based on the strategy of living services, the Group built a virtuous ecological circle of discovering needs, matching resources, connecting effectively and forming states. By adopting technology and focusing on community scenarios, the Group promoted the upgrading of the Group's products and improved the competitive strength of the Group's services and products. Community products and services During the year, the rapid growth of the Group's community products and services was primarily due to the Group's consistently outstanding capacity of supply of community products and the advance strategic layout of the new retail system. Based on the daily needs and demand for quality of property owners, while maintaining the standard function of supplying traditional community products (including rice, seasonal fruits, fresh food and traditional festival-oriented products, etc.), the Group launched the business model of “GreenMart” (“fresh food store + front warehouse + community immediate delivery”) by virtue of a property service company’s innate advantage of having “efficient access to customers”. Meanwhile, through strategic cooperation with a leading local supply chain, the Group expanded the Group's product portfolio, improved the Group's product supply chain system, and established a highquality living service platform closest to the lives of property owners, which maintained and improved the stickiness of the property owners. Home living services During the year, based on the accumulated data on the Group's platform, the Group improved the property owner profile identification system, which was fully applied to the home service platform called “Four Seasons Housekeeping”, a high-quality living platform that provides comprehensive, one-stop solutions on various matters in the lives of property owners, to provide effective data support for the Group's business development and achieve a steady improvement in the performance of the Group's home living services. For the next step, the Group will fully integrate the various home living service demand data within the Group, including high-end elderly care, housekeeping, cleaning, air conditioning repair and maintenance, and furnishing services to conduct effective data analysis on demand, integrate high-quality service resources, and provide property owners with more refined and convenient living services based on their demand on living services. Community space services During the year, the failure to renew an advertising business contract by a subsidiary of the Group affected the growth of the revenue from community space services. The Group believes that such advertising business contract is not one of the core services of the community space services and cannot represent the growth trend of the community space services. However, taking into account the current growth bottlenecks encountered by traditional advertising investment and operation business in the community space services, that is, affected by the marketing costs of upstream companies and the impact of new media advertising placement, the offline advertising business has been shrinking. This, coupled with the impact of the novel coronavirus epidemic in 2020, means that the Group’s advertising business development in brand operations and sales planning activities will also be limited to a certain extent, and the growth rate of the community space services business in the next year will be affected. However, the Group will continue to increase efforts in the integration of community space resources, enrich the product content of community space services, and enhance the bargaining advantage. In the meantime, the Group intended to develop variable advertising forms such as pop-up shops that take communities as basic support and community businesses as templates to provide property owners with products and services that fully meet their daily needs, increase the conversion rate of advertising in the community space, and continue to promote the upgrade and transformation of the Group's community space service products. Property asset management services Affected by the conditions and related policies in the real estate industry in 2019, the popularity of second-hand housing purchases continued to decline steadily. Property agency income remained the largest source of income of this segment. During the year, by implementing the strategy of the National Greentown Rental and Sales Centre, and establishing cooperation with the third parties, such as Lianjia.com, the Group continued to promote the second-hand housing business while focusing on the first-hand housing and agency services for the sale of remaining units, which has achieved initial success. Although the growth in revenue for property agency segment has slowed down, its gross profit margin has increased by approximately 4.4 percentage points compared with the year of 2018. For other asset management services (e.g. parking space business), the Group also continuously improved the Group's professional operation capabilities and expanded new services models, such as parking lot operations. In the future, the Group will continue to focus on the management and operation services for high-quality property assets in Tiers 1 and 2 cities to develop a stable business operation model. Cultural and education services During the year, the revenue and gross profit margin of this segment improved significantly, which was due to the combined impacts of the following factors: on the one hand, MAG, a company incorporated in Australia, became the Group's subsidiary after the completion of the Acquisition. The business growth of MAG is in line with expectations after the Acquisition and has made positive contribution to the increase in revenue and profit of the education segment. On the other hand, the Group focused on the development of the early childhood education brand of “Wonderful Garden”, the core competitiveness of which was improved by implementing the Group's strategy “standardized institutional setup, scientific education system, diversified curriculum design and personalized care service” after communication and cooperation with outstanding onshore and offshore early childhood education service institutions. After the business ramp-up period, its average occupancy rate increased significantly compared with the year of 2018. For the next step, in addition to the introduction of MAG’s advanced education concept and empowerment of its high-quality curriculum system on the Group's self-operated early childhood education business, the Group will try to explore the new model in the cultural and education business that offers professional teachers and curriculum systems by relying on the venue and hardware resources of the client. Taking into account of the impact and duration of the novel coronavirus epidemic, the short-term business development of this segment in 2020 will be affected to a certain extent. Consulting services — accounting for 14.2% of the total revenue, 26.4% of the total gross profit During the year, the Group continued to focus on the full life cycle of real estate, deeply analyzed the Group's clients’ needs, and continuously improved the organic growth and strengthened core competitive advantages of the Group's consulting services through methods such as the integration of quality resources, construction of a standardized system and business innovation, for the whole year of 2019: The income reached RMB1,217.2 million, an increase rate of 29.6% compared with the year of 2018, and compared with the growth rate of 30.0% in mid-year of 2019, the growth rate is basically flat. The Group’s gross profit increased by 14.4% to RMB408.6 million from RMB357.2 million in the year of 2018. The Group's gross profit margin decreased slightly to 33.6% from 38.0% in the year of 2018. This was mainly due to the impact of gross profit margin from the decrease in management consulting services, but the overall gross profit margin from consulting services remained at a high level. In face of the changes in the consulting service market conditions, the Group actively responded to the changes and continuously implemented service innovation. During the year, the Group focused on the commercial and office scene, and launched a commercial and office properties cloud sharing service system supported by the “operation system + service system + standard system” to facilitate the development of industry services. Relying on the property projects and management resources, the Group tried to explore the use of real estate consultation services to fully meet customer service needs. The Group also continuously enhanced the core competitiveness of the “Green Alliance”, deepened the output of the management system and the service system, and continuously promoted the development of the Group's consulting services by virtue of the advantage of the synergy between the property services and community living services of the Group. Property Under Construction Services The Group’s revenue reached RMB983.3 million, an increase of 24.8% compared with the year of 2018, basically in line with the 27.6% increase in the mid of 2019. Based on the analysis of customer needs, the Group upgraded the traditional field services to better life experience services. With the goal of achieving “better life”, the Group explored and provided courses for different levels, different systems, and different needs, to improve the professional capabilities of service personnel in various aspects, and create a team of “better life designers”. In the meantime, the Group built a commercial and office properties brand of “Greentown Cloud Sharing” via service and product segments, which facilitated sales services for non-residential properties and promoted the steady business development of this segment. Management Consulting Services The Group’s revenue reached RMB233.9 million, an increase of 54.1% compared with the year of 2018, which is significantly higher than the 42.0% increase in the mid of 2019. This was due to the combined impacts of the followings: on the one hand, the Group relied on the client resources from property consulting projects to deeply develop and provide real estate consulting services, enhancing the customer value. On the other hand, the “Green Alliance” services, by giving full play to its leading quality advantage in the property service market, provided smart community living services, training and quality certification services, which further enhanced its core competitiveness. Such long-term, diversified, superimposed and sustainable cooperation model has been recognized by many customers, and the number of service output targets has further increased. Prospects: After the eventful year of 2019, the Group has steadily taken another big step forward and are standing at the starting point of a new track. Confronted with the epidemic windstorm while forging ahead, the Group sees a situation full of both challenges and opportunities. The Group is faced with a new battle amidst the recovery of the service industry, and in turn, the Group's management need to lead all of the Group's staff to prepare and take action to understand the situation, apply technological means, improve the Group's servicing ability, and promote the Group's business development, so as to achieve the Group's shared growth. Over the past few years, as the famous saying goes — listen to the spring thunder in silence, the Group has been determined to deploy the Group's businesses in education, healthcare, new retails, etc. in the Group's strategic cycle. There may be numerous trials and hardship ahead. In despite of this, the Group must act aggressively and adventurously with prudence kept in mind and strive to seek breakthroughs in the Group's industry while flexibly avoiding risks and proactively seizing market share, so as to create a brighter future for service providers. The Group is not only a partner in the service undertaking, but also part of the service industry with a common destiny. In facing over 300 brand new days ahead in the service-oriented working scenario, the Group will, as the public would expect, be committed to moving forward steadily in the same direction and on the same road without losing the Group's efforts and corporate cultural.

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