Shimao Services Announces 2020 Annual Results

By Abdul

HONG KONG, Mar 15, 2021 – (ACN Newswire via SEAPRWire.com) – Shimao Services Holdings Limited (“Shimao Services” or the “Company”; HKEX stock code: 873.HK), a leading comprehensive property management and community living services provider in China, today announced the first annual results since its listing. In 2020, Shimao Services recorded operating revenue of RMB5,026 million, representing a year-on-year growth of 101.9%. Profit for the year surged 88.4% amounting to RMB724 million. Profit attributable to the equity holders of the Company stood at RMB693 million, representing a year-on-year growth of 80.2%. The Company has achieved overwhelming results compared with the previous guidelines. The Company’s cash and cash equivalents amounted to RMB5.83 billion in 2020, representing an increase of 586.2%. Adhere to the concept of win-win sharing, the Board proposed a final dividend of HK11 cents per share, and total dividend amounted to HKD 260 million, translating to a dividend payout ratio of 31%. During the review year, the Company’s GFA under management and various operating indicators expanded rapidly and accomplished speedy development.

(From left to right): Mr. Liu Yu, Assistant President of Shimao Services; Mr. Cai Wen Wei, Executive Director and Chief Financial Officer of Shimao Services; Mr. Jason Hui Sai Tan, Vice Chairman of the Board of Shimao Group and Chairman of the Board of Shimao Services; Mr. Ye Ming Jie, Executive Director and President of Shimao Services; Mr. Feng Bo, Vice President of Shimao Services

Surpass scale of growth with contracted GFA exceeding 200 million sq. m.
As of the end of 2020, the Company’s GFA under management was 146.1 million sq.m., representing a year-on-year surge of approximately 114.4%. The Company’s contracted GFA was approximately 201.1 million sq.m., representing a year-on-year increase of approximately 99.4%. The contribution of third-parties area has increased to 35% among the GFA under management. In 2020, the Company’s newly added area through market expansion reached 23.5 million sq. m., representing an increase of 130% compared to the 2019 level. The success rate of third-parties bidding grew notably from 46% in 2019 to 53.4% in 2020. All of these reflected the Company has achieved remarkable growth in both managed area and management capabilities.

Shimao Services is one of the important wings of Shimao Group’s “big aircraft” strategy. Shimao Group, a leading and fast-growing property developer, has brought sufficient reserve projects to Shimao Services. As many as 86.2% of the Group’s projects are located in the first- and second-tier cities in China, enabling Shimao Services to enjoy the synergies of the Group’s comprehensive urban layout. Shimao Services’ projects are mainly located in the most economically developed and fastest-growing regions including Yangtze River Delta, Bohai Economic Rim, Central and Western China as well as Northern China region. As of 2020, the Company’s projects cover 137 cities across the country, representing a year-on-year growth of 51%. 77% of its projects are concentrated in the first- and second- tier cities, of which 27% located in five major cities in Fuzhou, Xian, Hangzhou, Wuhan and Tianjin.

The Company’s business expansion also serves a wider range of businesses. As of 2020, the Company’s GFA under management of non-residential properties, comprised of certain representative businesses such as schools, hospitals and public facilities, reached 59.2 sq. m., accounting for approximately 40.5% of the total GFA under management, up by 36.3 percentage points compared to the 2019 level. While Shimao Services always puts users first and quality as the core, its customer satisfaction level grew simultaneously to 89, outperforming the industry average by 13%. The collection rate remained high at 95% for three consecutive years, and the contract renewal rate is nearly 100%. All business indicators remained strong with stable and healthy operational foundation.

Strong synergies among three core business segments to support high quality growth effectively
In 2020, the Company’ property management services achieved revenue of RMB 2.7 billion, a 126.1% year-on-year surge that accounted for 54.0% of total revenue. Revenue of the community value-added services segment was up 146.8% year-on-year to RMB1.6 billion. Value-added services to non-property owners. realized revenue of RMB 713 million, posted an increase of 11.2% year-on-year.

It is worth noting that the community value-added services which has improved significantly in particular, with revenue contribution amounted to 31.8%, representing a growth of 5.7 percentage points when compared to the 2019 level. It has also recorded a higher gross profit margin for the Company, reaching 40.1%. Beforehand, as the Company entered campus services, it added a more diversified campus value-added services to its businesses, including campus life service supporting services, catering services, etc. Despite the impact brought about by COVID-19 and only half a year of schooling, campus value-added services recorded revenue of RMB 230 million.

Additionally, the technology company under Shimao Services recorded revenue of RMB 450 million in 2020, a surge of 775.6% year-on-year and becoming a new pillar of the community value-added service business. By breaking industry boundaries and through external development, the Company has successfully became the professional service provider of multiple enterprises and institutions such as Fudan University and Chongqing District Government and also the strategic supplier of China Mobile, Tencent Cloud and CRCEG, marking a significant breakthrough.

Clear strategy in scale development with strong management and operations to achieve “1+1>2”
Scale development is one of the significant means for the rapid development of corporations. As of 2020, Shimao Services has successfully established cooperation with 12 property companies. With the “value investment” philosophies, Shimao Services has set up its short and long term investment strategies. By selecting the regional leading companies, such as Hailiang Property, and segment leaders, such as Zheda Sinew, and others, to achieve rapid growth in scale and increase project density and business concentration. In the medium and long term, it will develop solid foundation for value-added service and foster leaders in niche markets to establish the Company’s market presence and optimizing the ecosystem of urban services with the new growth driver.

Besides, Shimao Services continued to seek for a win-win cooperation, resulting in “1+1>2”. Armed with its M&As “integration” system, Shimao Services has become one of the leader in the industry through continuous practice and testing in recent years. Shimao Services has built a complete “integration” system, from precise pre-investment evaluation to integrated and enhanced post-investment management. The Company is the only one which conducts post-investment management at the initial stage, conducting business due diligence and preparing integration plans in advance.

Taking it as reference, in 2019, Shimao Services has incorporated Hailiang Property and Sanyuan Property to its integrated management and operation, the net profit margins rose by an average rate of 4.2% and net profit reached an average of 16.9% afterward. In 2020, the net profit margins of Guangzhou Yuetai, Chengdu Xinyi, Citichamp property and Zheda Sinew rose by an average rate of 2.6% while the net profit reached an average of 8.3%. As a result, the higher the degree of integration with the management system of Shimao Services, the more obvious the performance improvement will be. Besides, the collection rate of 12 companies improved by 12.1 percentage points and the revenue of its community value-added services increased 2.5 fold.

Carry out a new “Three-year Strategy”
During the results presentation, the Company mentioned the new “Three-year Strategy” after its listing. In the upcoming three years, the Company will establish a “1+1+X” business system covering basic property management services, value-added services and smart city services. By implementing its strategy to deepen development in key cities, its strategy on user-centric and product improvement, its strategy on supply chain integration and cost management, its strategy on delicacy management enhancement and finally its strategy on establishing an innovative talent system, the Company will further consolidate its five core competencies. With the aim to become “the ideal partner for promoting quality urban development”, Shimao Services will provide the tri-positioning of “city service bulter”, “city asset operation assistant” and “city development cooperative partner” to its service, and cultivate the further growth drivers. Currently, the Company has signed a number of strategic framework agreements with Sucheng District of Suqian City, Yongtai County of Fuzhou City and Huadian City of Jilin Province, hence to build benchmark projects, and embark on replication in multiple regions in the long-run.

Looking ahead, the Company is committed to accomplishing as a city life service provider offering quality services focusing on “users” and “assets”, with a strategic goal to become one of the leaders in property management sector by 2023.

Mr. Hui Sai Tan, Vice Chairman of the Board of Shimao Group and Chairman of the Board of Shimao Services, said, “Shimao Services is one of the important wings of Shimao Group’s “big aircraft” strategy. In the past three years, it has achieved speedy growth of five folds and carried out a new ‘three-year strategy’. Shimao Group has full confidence in Shimao Services and will continue to bring quality resources including local government, business partners, and industries to the Company, thus to vigorously promote and support the development of Shimao Sevices in the next three years.”

About Shimao Services Holdings Limited (Stock code: 873)
Established in 2005, Shimao Services is China’s leading provider of integrated property management and community life services. It is also one of the important wings of Shimao Group’s “big aircraft” strategy. Shimao Services takes the “Smart Maker of Good Life” as its brand concept and implements the “iBlue Strategy”, focusing on the four core high-energy city clusters in the Yangtze River Delta Region, Central and Western China, Southern China and Bohai Economic Rim. As of December 2020, the company had more than 530 properties under management, 210 million square meters of contract area, covering residential, schools, government and public facilities, health care centers and hospitals, VIP lounges in waiting rooms, etc, and provided comprehensive property management, community life services and non-owner value-added services for nearly 2.4 million owners and users.

For more information, please visit Shimao Services’ website: https://www.shimaofuwu.com/

For further information, please contact:
Strategic Financial Relations Limited
Maggie Au / Stephanie Liu / Adrianna Lau
Tel: (852) 2864 4815 / (852) 2864 4852 / (852) 2114 4987
Fax: (852) 2527 1196

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