The revenue structure continues to be optimized, and profitability is steadily improving. In 2023, the company's total revenue was 33.18 billion yuan, up 10.2% year on year; gross profit was 4.81 billion yuan, up 13.7% year on year; gross margin was 14.5%, up 0.4 percentage points year on year; among them, revolving business revenue in 2023 was 26.66 billion yuan, up 14.2% year on year, accounting for 80.4% of revenue, up 2.8 percentage points year on year; the company's profit in 2023 was 2.04 billion yuan, up 28.3%, and net cash flow from operating activities for the year was 2.59 billion yuan; core net profit was RMB 2.34 billion, an increase of 29.8% over the amount of the same caliber in 2022.
Implement a diversified customer strategy, and the management scale continues to grow. In 2023, the company's saturated revenue from residential property projects under management was 17.0 billion yuan, up 14.8% year on year, gross profit of 2.27 billion yuan, up 55.5% from 2022, and gross margin increased 3.5 percentage points year on year. The number of property and facility management service projects under management in 2023 was 2,241, an increase of 412 over the same period last year, with revenue of 8.30 billion yuan, a year-on-year increase of 10.0%, and gross profit of 710 million yuan, a decrease of 22.2% over the same period last year. Revenue from residential and consumer services for community spaces was 18.74 billion yuan, up 13.0% year on year; revenue from commercial enterprises and integrated services for urban space was 11.66 billion yuan, up 4.7% year on year; revenue from AIoT and BPaaS solutions was 2.78 billion yuan, up 16.9% year on year.
The “Butterfly City” layout continues to be implemented, and the effect of improving quality and efficiency has been verified. The total number of Diecheng grew from 584 in 2022 to 621 in 2023, with 191 standard Diecheng, 188 attacking Butterfly City, and 242 target butterfly cities. In 2023, 319 new residential property projects were added in Diecheng, and a total of 40 new residential property projects were completed. The contract amount for housing renovation in Diecheng was 355 million yuan, +68.0% over the same period last year; the transaction volume in Diecheng reached 248 million yuan, an increase of 136.8% over the previous year.
Technology empowers quality and efficiency, and optimizes customer structure. In 2023, bPaaS solution revenue was 1.36 billion yuan, up 37.2% year on year, gross profit of 40 billion yuan, up 26.1% year on year. In 2023, the bPaaS business added 69 new external customers, and spatial remote services were implemented in 39 urban projects. AIoT solution revenue was 1.42 billion yuan, up 2.4% year over year, and gross profit was 40 billion yuan, down 5 percent year over year. 6%, of which revenue from developers was 780 million yuan, gross profit was 230 million yuan, revenue from non-developers was 640 million yuan, and gross profit of 170 million yuan. By the end of 2023, the company had implemented 459 Lingshi servers in 101 butterfly cities, achieving a coverage rate of at least 99.3%.
Profit forecasting and ratings. The company's net profit to mother is expected to grow at a rate of 20.4%/16.1%/12.6% in 2024-2026. Considering the steady operation of the company, the rapid expansion of business in the technology sector, and the gradual emergence of the scale effect of the “Butterfly City” model, the “Buy” rating was maintained.
Risk warning: Risks such as property expansion falling short of expectations and commercial enterprise and urban service expansion falling short of expectations.