The Zhitong Finance App learned that CICC released a research report stating that it maintained the “outperforming industry” rating of Xuhui Yongsheng Service (01995), basically kept the 2024 profit forecast unchanged at 480 million yuan (up 11% year on year), and raised the 2025 net profit forecast of 5% to 530 million yuan (up 10% year over year), mainly considering hypothetical adjustments to the gross margin of the company's core business, and raised the target price by 18% to HK$1.65, mainly considering that the dividend rate after the company raised its dividend ratio.

The report cites the company's 2023 performance. Revenue increased 4% year on year to 6.54 billion yuan, and net profit to mother fell 10% year on year to 430 million yuan, in line with market expectations, mainly due to drag down value-added services from non-owners and other year-on-year declines in revenue. The Board recommended a year-end dividend of HK$0.09 per share (HK$0.14 total for the year), with a total dividend ratio of 50%, corresponding to the current dividend rate of 10.6%.

The company aims to maintain the compound double-digit growth rate of revenue and profit and net profit coverage of at least 1 times the net operating cash flow during the “25 period”, control the growth rate of accounts receivable scale, and achieve high-quality growth in net operating cash flow growth rate > profit growth rate > revenue growth rate. The bank believes that with the basic completion of the company's transformation and adjustments at the level of risk management, business model, and business independence, core business-side companies are expected to continue to develop steadily. Considering that the scale of company-related receivables and third party receivables is still at a high level, the bank believes that it is still necessary to pay attention to cash flow disbursement and changes in total related party accounts and depreciation.