Futu News, April 19, this Tuesday.$Tohara Renji Service (02352.HK) $According to the announcement, the company intends to issue 16.6667 million shares from April 19 to April 22, including 1.6668 million shares for public offering and 14.9999 million shares for international offering at a price of HK $11.90 to HK $15.40 per share, which is expected to be listed on April 29.

Dongyuan Renzhi Service is a property management service provider with a long history, providing comprehensive services for many property projects in China. As of December 31, 2021, the company operates in two major regions of China, namely, Southwest China and East China.

According to the data of the China Index Research Institute, in 2021, the company ranked 52nd and 53rd among the top 2021 Chinese property service enterprises in terms of total revenue generated in China in 2020 and total managed construction area in China in 2020.

As of December 31, 2021, the company has 325 property projects under management, including residential and non-residential properties, covering 51 cities in 16 provinces, autonomous regions and municipalities directly under the Central Government, with a total construction area of about 28.2 million square meters. Of these, 133 are residential properties and 192 are non-domestic properties.

In terms of financial situation, the total income from 2019 to 2021 was 559 million yuan, 767 million yuan and 1.193 billion yuan respectively, with a compound annual growth rate of about 46.1 percent from 2019 to 2021.

The net profit in the same period was 25.6 million yuan, 84.5 million yuan and 130 million yuan respectively, with a compound growth rate of 125.72% in 2019-2021.

In terms of industry, in recent years, with the acceleration of urbanization and the continuous increase of per capita disposable income, the building area and the number of property projects managed by the top 100 property service enterprises have increased rapidly. The construction area under management increased from about 23.62 million square meters in 2015 to about 48.78 million square meters in 2020, with a compound annual growth rate of about 15.62 percent.

The average income of property services and value-added services of the top 100 property services enterprises is also growing rapidly. the average annual income of the top 100 property services enterprises increased from about 541 million yuan in 2015 to about 1.173 billion yuan in 2020, with a compound annual growth rate of about 16.76 percent.

For fund-raising purposes, the net income of the company is about HK $190 million (assuming that the over-allotment option has not been exercised, based on the median issue price). According to the prospectus, the company intends to use the net proceeds from the share sale for the following purposes:

About 65% will expand the company's property portfolio and business scale through strategic investment, cooperation and acquisition, about 16.5% will be used to improve service quality and expand the scope of services along the property management value chain, and about 8.50% will be used to upgrade and develop the company's smart systems. About 10% will be used for general working capital.