On October 27, the Investment Savings Report for the third quarter of 2023 was released. The company achieved revenue of 10.856 billion yuan, +18.29% year-on-year; net profit of 595 million yuan, +25.92%; net profit after deduction of 537 million yuan, +39.80% year-on-year in the first three quarters.

Revenue from various business segments achieved steady growth, and the asset management business recovered strongly. In the first three quarters, the company achieved revenue of 10.856 billion dollars, an increase of 18.29% over the same period last year. By sector, among them, the property management business achieved revenue of 10.376 billion yuan, an increase of 17.16% over the same period last year, mainly due to the growth of original property management projects and the increase in newly expanded market-based property management projects; the asset management business achieved revenue of 458 million, an increase of 40.73% over the same period last year, mainly due to revenue growth brought about by the expansion of the scale of commercial operation projects managed by the company and rent relief for company-owned properties in the same period last year; judging from the composition of the property management business, basic property management business achieved operating income of 8.536 billion yuan, a year-on-year increase 17.80%; the platform value-added service business achieved revenue of 388 million yuan, an increase of 12.61% over the previous year; the professional value-added service business achieved revenue of 1,452 million yuan, an increase of 14.76% over the previous year.

Excellent results in market-based expansion, and the advantages of multiple channels are highlighted

In the first three quarters of 2023, the company continued to increase its market expansion efforts and achieved a new annual contract amount of 2,791 billion yuan, an increase of 14.86% over the same period last year. Among them, the amount of new annual contracts signed for third-party projects was 2,458 billion yuan, and projects above 10 million accounted for more than 54%. By the end of September 2023, the company was managing 2,043 projects, and the management area increased to 333 million square meters.

During the reporting period, the company focused on accelerated development of multiple circuit segments. The amount of new annual contracts signed for traditional project expansion increased 18% year on year, the total annual contract amount for total business increased 15% year on year, and a total of 5 joint ventures were established in the first three quarters; multiple business formats were strengthened, non-residential business continued to maintain their advantage, and the amount of newly signed annual contracts increased 17% year over year. Among them, business segments such as offices and schools all increased by more than 35% year on year, and successfully signed benchmark projects such as ZTE, Huawei Jiuhuashan, Canton Fair Complex, and Ningbo Nottingham University.

Efficient integration of post-investment management, and continuous improvement of value-added services

The company attaches importance to post-investment management and actively integrates and improves efficiency. During the reporting period, the four M&A companies, Jiyu China Airlines, Jiyu Shanghai Airlines, Jiyu Xinzhong, and Jiyu Huiqin, took multiple measures in terms of cultural integration and business integration. The competitive strength of the enterprises was significantly enhanced, and quality and efficiency improved overall. From January to September 2023, the four M&A companies achieved a total revenue of 971 million yuan, and a total annual contract amount of 257 million for newly signed projects.

Furthermore, the company's two major value-added service businesses are also developing well. In terms of platform value-added services, from January to September 2023, the company went to the Jiahui Mall to achieve a platform transaction volume of 750 million, gross margin increased by more than 2 percentage points year-on-year, optimized the business structure, actively abandoned the low margin business, focused on building the “Easy Purchase of Investment” and “China Merchants Lucky Bag” brands, accelerated external market expansion and achieved results, and won bids for high-quality services such as Shenzhen Airport and CMB Financial Services; in terms of professional value-added services, the company explored charging pile business, and accumulated access to more than 20,000 charging stations in the first three quarters; in terms of IFM business, the company served customers such as the Huawei and Ningde era Ali The customer market share continues to grow, consolidate the quality of security line services, strengthen market expansion, win more than 70 market-based bids, and expand major customers such as ZTE and Lenovo; the dry cleaning business adheres to quality supremacy and model changes, gives full play to the efficiency of central factories, and performance growth exceeds expectations.

Investment suggestions: In the first three quarters of 2023, the company handed over an impressive questionnaire. Performance grew rapidly, post-investment integration was smooth, expansion momentum was rapid, and there were breakthroughs at the business level in all segments. We continue to be optimistic about the company's future development and maintain previous profit forecasts. We expect the company's net profit for 2023-2025 to be 782 million, 978 million and 1,196 million, maintaining the company's “buy” rating.

Risk warning: Project expansion falls short of expectations; upward pressure on costs continues to increase.