On July 2, Futu News reported that $KINGFARPROPERTY (01354.HK)$Today, the dark pool closed at 7.5 Hong Kong dollars, with a turnover of 2.9497 million Hong Kong dollars and a total market value of 500 million Hong Kong dollars.
Market source: Futu Securities >
Investment highlights
Leading urban services and property management services provider: Starting in 2021, the company has been rated as one of the top 100 property management service providers in China by the China National Government Procurement Committee for three consecutive years. In 2022, it was ranked as the top enterprise in comprehensive strength among the top 50 property service enterprises in Shaanxi Province by Kr & Co. and CMIC Research Association. During the previous period, the company's business scale and financial performance steadily increased.
Deep cooperation with government agencies and public institutions: The company has set up headquarters in Xi'an, the capital city of Shaanxi Province, mainly focusing on providing urban services to government agencies and public institutions, as well as providing residential and commercial property management services to property developers, homeowners, and residents. As for property management services, as of December 31, 2023, the company has contracted to manage 149 projects, including government buildings, educational institutions, hospitals, residential communities, office buildings, and industrial parks, with a total contracted construction area of 15 million square meters.
Risk warning
Adverse impact of the business environment: A considerable portion of the company's business is concentrated in Xi'an. In 2021, 2022, and 2023, the company's revenue from Xi'an was RMB 589.6 million, RMB 693.8 million, and RMB 839.4 million, accounting for 99.3%, 98.2%, and 97.4% of the company's total revenue, respectively. If any natural disasters, epidemics, or pandemics occur that affect Xi'an, the company's business, financial situation, and operating performance will be adversely affected.
Labor and subcontracting cost fluctuations: China's property management industry is a labor-intensive industry. As the company's labor and subcontracting costs together account for a large part of its sales costs, the company believes that controlling and reducing its labor and subcontracting costs is crucial to maintaining and improving our profit margins and other operating costs. In 2021, 2022, and 2023, the company's labor costs accounted for 73.9%, 71.8%, and 60.9% of total sales costs, respectively.
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Editor/Joe