Performance grew steadily, and high revenue and low costs contributed to a recovery in gross profit. In 2023, the company's overall revenue increased 19.7% to $13.05 billion; gross profit of $2.07 billion, up 19.3% year on year; operating profit rose 24.4% to $1.80 billion, and profit attributable to shareholders increased 22.8% to $1.34 billion; sales and administrative expenses fell slightly by 3.3% due to increased business volume growth, mainly due to the company increasing its subcontracting efforts and optimizing the personnel structure; during the period, the company's management scale continued to increase, and various businesses continued to grow, and gross margin rebounded to 15.9%. Among them, the gross margin of value-added services for property management, non-residents and value-added residents was 15.0%, respectively /13.1%/26.1%
Property management services are growing steadily, and the non-residential sector is being actively expanded. Property management revenue increased 16.0% year on year to 9.41 billion yuan, accounting for 72.1% of total revenue, and gross profit of 1.41 billion yuan, up 29.6% year on year. Among them, revenue from core property management services increased 25.7%, and the gross margin of the weighted average property management service business rose to 15.0%.
In 2023, it entered a total of 164 cities, with 1999 property management projects. The management area increased by 25.4% to 40 million square meters at the end of 2022. Of these, 70.6% of the new projects came from independent third parties, the relevant contract amount was 4.0 billion yuan, the proportion of managed construction area from independent third parties increased to 40.5%, the proportion of non-residential management area accounted for 30.1%, and the number of managed store projects reached 500. Currently, the company's property management services have been extended to the headquarters of the Hospital Authority and more than 60% hospitals under its administration, covering 12 government decision-making bureaus and 21 Policy implementation departments have maintained their leading position as the largest government property management service provider in Hong Kong and the largest Chinese-funded property service enterprise in Hong Kong and Macau.
The value-added business has diversified and expanded, and sales of parking spaces have declined. The company's value-added business achieved revenue of 3.44 billion yuan in 2023, up 33.7% year on year. Among them, non-residential value-added business and household value-added business achieved revenue of 21.4/1.29 billion yuan respectively, accounting for 16.5% and 9.9% of total revenue, up 18.3%/70.9% year on year; residential and non-residential projects contributed 47.8% and 52.2% respectively, and related contract amounts reached 4.02 billion yuan and 3.0 billion yuan respectively. Non-household value-added gross profit decreased by 5.8% to $280 million in 2023, and gross profit from household value-added business increased 16.1% to $340 million. The company's revenue from the parking space trading business fell 6.6% year on year to 200 million yuan in 2023. It sold 3109 parking spaces during the period. The average transaction unit price was lower, and the segmental profit fell to 43 million yuan.
Profit forecast and investment advice: The company's net profit due to mother in 2024-2026 is estimated to be RMB 16.2/19.2/2.24 billion, respectively, with growth rates of 21%/18%/17%, respectively. Considering that the company's management scale continues to grow at a high level, diversified expansion of value-added services contributed to the increase in performance and maintained a “buy” rating.
Risk warning: CNOOC project delivery falls short of expectations; third party project expansion or falls short of expectations: value-added service development or falls short of expectations.