Income growth is strong. Revenue from Jinmao Services rose 60 per cent year-on-year to 1.1 billion yuan (RMB) in the first half of 2022. The same below, unless specifically specified), revenue growth is strong. Among them, the income of the property management service division rose 45.8% year-on-year to 540 million yuan, community value-added services increased by 221.3% to 250 million yuan, and non-owner value-added services increased by 30.1% to 310 million yuan. The substantial increase in the income of the community value-added services division reflects the increase in the number of properties managed by Jinmao Services, which has led to the corresponding value-added services. In addition, the company has redefined parking spaces and property agency services from non-owner value-added services to community value-added services, estimating an one-time impact of about 60 percentage points.
The income from property management services, community value-added services and non-owner value-added services accounted for about 49.3%, 22.4% and 28.3%, respectively. The proportion of income from non-owner value-added services is steadily declining, and the income structure is becoming more robust.
Profitability to maintain a high level of the industry. Gross profit of Jinmao service rose 58.5% year-on-year to 360 million yuan. Gross profit margin remained stable, falling 0.3 percentage points year-on-year to 32.5%. From the perspective of the segment, the gross profit margin of property management services fell slightly by 0.4 percentage points year-on-year to 17.2%, the gross profit margin of community value-added services fell 6 percentage points to 46.7%, and the gross profit margin of non-owner value-added services fell 2.1 percentage points year-on-year to 47.8%. The decline in gross profit margin of community value-added services is relatively high, mainly due to the increase in expenditure on personnel and resource allocation due to the expansion of business. The company's sales and management fees increased by 31.7% to 130 million yuan compared with the same period last year, and the ratio of sales and management fees to revenue was about 12.3%. Excluding the impact of listing expenses, sales and management fees were estimated to be about 120 million yuan, and the ratio of sales and management fees to income was about 11.1%, down 2.5% from a year earlier. After deducting listing expenses, the operating profit is estimated to be about 230 million yuan, up 78.6% from the same period last year. The profit growth outperformed the peers by a large margin.
The proportion of third-party projects has increased. As of June, Jinmao's service contract area was about 6960 million square meters, a net increase of 1200 million square meters over December 2021, including the acquisition and privatization of first-time home ownership (pre-listing number:
2868.HK), resulting in a contract floor area of 7.11 million square meters. Of the remaining additional contract area of about 4.89 million square meters, the parent company, China Jinmao (817.HK), and third-party development projects account for about half of the new contract area, while the third-party area has increased sharply. In terms of management area, as of June, the company had about 45.5 million of the area under management, of which the area from third-party projects was about 1789 square meters, accounting for about 39%, an increase of 5 percentage points over the end of last year. The growth of management scale remains strong, with a co-management ratio of 1.53 times. Urban services continue to make efforts, and three new urban operating projects were signed in the first half of 2022, which is one of the driving forces for the growth of the company's future management scale.
Growth in scale, revenue and profits remained strong. On the whole, Jinmao Service has a strong growth in management scale, revenue and profit, which greatly outperforms its peers. The overall gross profit margin maintains a relatively stable level in the counter-cycle, and the income structure becomes more and more robust with the increase of the scale of management. Reflected in China's Jinmao sales growth, Jinmao service has benefited. In addition, Jinmao relies on its central enterprise background, under the financial pressure of private real estate developers, we expect the company to have more M & An opportunities in the future, and the scale growth is expected to maintain a high level. The management maintains the company's growth target of the 14th five-year Plan, with a compound growth rate of 50% for management scale, revenue, net profit and other major indicators from 2021 to 2025.
The scale and area exceeded 100 million square meters in 2023.
Risk tips: the impact of the epidemic, weak real estate sales, the uncertainty of mergers and acquisitions.
