Text/Leju Finance Jin Wenyu
On August 28, Jinmao Services (00816.HK) released its 2023 first half performance report. Throughout the past six months, under the situation of the general slowdown in the growth rate of the property industry, Jinmao Services still showed stable, healthy, high potential and differentiated development characteristics.
From the perspective of business performance, in the first half of the year, Jinmao Service achieved revenue of 1.353 billion yuan, a year-on-year increase of 23.4%, and gross profit of 357 million yuan, achieving positive growth.
During the same period, Jinmao Service adjusted its business structure, vigorously increased the proportion of non-cyclical business, and achieved a significant increase in non-cyclical revenue in the first half of the year. Among them, the year-on-year growth rate of basic property management revenue was 38.7%, and the community value-added income increased by 54.5% year-on-year, and the company's revenue structure was further optimized.
From the perspective of scale expansion, the area under management of Jinmao Services in the first half of the year was about 70.98 million square meters, a year-on-year increase of 56%, of which the area under management of third-party services increased by 89.5% year-on-year; The contract management area reached 94.48 million square meters, an increase of 35.8% year-on-year, forming a good reserve and good foundation for future transformation.
In the first half of this year, Jinmao Services also comprehensively upgraded its expansion strategy, focusing on the four strategies of "urban deep cultivation", "refinement scale", "urban service" and "integration of operation and operation", which clarified the direction of development for enterprises to seek external development, refined the measurement scale, improved the efficiency of bidding expansion, and further tapped the huge development space of urban service projects.
At the performance meeting, the management of Jinmao Service said that in the long run, the company's overall performance growth will remain above 20%, "We also analyzed the entire industry, this level of development is very healthy in the long run, and can also maintain a relatively leading position in the industry."
Steady growth of core data
In the first half of this year, the revenue of Jinmao Services grew steadily, with total revenue rising by 23.4% over the same period last year to 1.353 billion yuan. Among them, non-cyclical business focuses on efforts
Non-cyclical business refers to basic property management and community value-added business. In the first half of the year, the non-cyclical business revenue of Jinmao Services increased significantly by 43.6% year-on-year, and the gross profit was 272 million yuan, an increase of 31.2% year-on-year, while the gross profit margin of basic property management remained at 16.7%. The rapid growth of non-cyclical business also further highlights the rapid optimization of Jinmao Service's revenue structure.
Specifically, revenue from property management services increased by about 38.7% to about $750 million from about $541 million in the same period last year. The increase was mainly due to the expansion of Jinmao Services' business resulting in an increase in its GFA under management.
Data shows that as of June 30, 2023, the GFA of Jinmao Service Contract was 94.48 million square meters, and the GFA under management was 70.98 million square meters, an increase of 35.8% and 56% respectively over the same period last year. Among its revenue of 1.353 billion yuan in the first half of this year, the revenue from third parties was 964 million yuan, accounting for 71.2%, an increase of 12.7 percentage points year-on-year.
Revenue from community value-added services was $380 million, up 54.5% from $246 million in the same period last year. This was mainly due to the growth of the four major business segments of Jinmao, service and community value-added services in the first half of the year, compared with the same period of the previous year.
At the performance meeting, the management of Jinmao Service said, "We will still focus on maintaining the growth of 30%-40% of the non-cyclical business this year to lay a solid foundation for sustainable development in the future." ”
In the past six months, the resilience of Jinmao Services' value-added services has begun to show. Among them, the revenue of Mercure business increased by 113.7%, asset brokerage business increased by 82.1%, space resources business increased by 37.5%, and life services increased by 13.3%. "We believe that community value-added services will be a source of continuous profitable growth for the company."
While maintaining rapid growth, the cash flow of Jinmao Services is also stable and improving. As of June 30, 2023, its cash and cash equivalents were approximately $1,076 million, an increase from $1,019 million at the end of last year, primarily due to net cash flow from operating activities.
According to the announcement, the net cash flow from the Group's operating activities in the same period was approximately 86.3 million yuan, down from approximately 117 million yuan in the same period last year. However, Jinmao Services stated in the results announcement that the Group has sufficient financial resources and future revenue, which will be sufficient to support the Group's current working capital needs and future expansion.
Outreach projects bloom at multiple points
For property enterprises, it is important to gain a firm foothold in the capital market and improve their expansion capabilities. In the first half of this year, Jinmao Services comprehensively upgraded its expansion strategy, including the key points of the city's deep cultivation and refinement, urban services and the integration of operation and operation, in order to better respond to market changes.
As of June 30, Jinmao has served 443 projects under management nationwide, covering 75 cities across the country, including core areas with high economic vitality such as the Yangtze River Delta, Beijing-Tianjin-Hebei, Pearl River Delta, and Chengdu-Chongqing Economic Zone, of which first- and second-tier cities account for about 90%, and the top ten cities account for 56% of the area under management.
The management said at the performance meeting that after the middle of this year, Jinmao Service has further optimized its expansion strategy. By analyzing the company's own brand influence and resource reserves, including the magnitude of cities, the expanding cities are further focused on some high-level cities. "It is expected that the expansion in the second half of the year will produce more than 70% of the total expansion performance in these cities."
In addition to the parent company's continuous delivery of high-quality projects in core cities, Jinmao Services has been fruitful in expanding outward through market-oriented competition. Among them, the proportion of third-party area under management increased from 39.3% at the end of last year to 47.8%, and the area under management of third parties increased by 89.5% year-on-year. In open market tenders, the company won 57% of the bids.
In the first half of this year, through individual expansion and equity cooperation, Jinmao Services has achieved fruitful results in the fields of quality housing, commercial enterprise offices, urban services and industrial parks.
For example, in addition to the addition of residential projects such as Beijing Olive Home and Chongqing Maolai Mountain Residence, Jinmao Services has also added high-quality industrial park projects including super high-rise office buildings, Shanghai Taiping Financial Tower, Qingzhou Museum, the "national first-class museum" and Weifang Goertek Industrial Park.
In addition, Jinmao Service has successfully broken through the ceiling of traditional space property management, opened up a new market space in the IFM business field, and has been deployed in a number of high-output value business customers, covering national ministries and commissions, financial high-end manufacturing, hospitals and other fields. Based on projects such as Beijing Experimental No. 2 Elementary School and Nezha Automobile Global Headquarters as the fulcrum, its experience in providing IFM services in diversified fields has been further improved and enriched.
It is worth mentioning that urban services have always been a feature of Jinmao's service differentiation. In the first half of the year, Jinmao Service continued to strengthen its thinking on urban service strategy, strengthen one logic, serve three types of customers, focus on three types of products, use four models, and strengthen four guarantees, so that the company can continue to maintain this differentiated advantage.
As of June 30, 2023, Jinmao Services has a total of 10 urban service projects in hand, achieving diversified coverage of urban business formats. In the first half of this year, Jinmao Service signed two new urban service projects, Xiong'an City Service and Hebei Longhe New City City Service, with an estimated new conversion area of 4 million square meters. Among them, Xiong'an urban services cover commercial writing, medical treatment, wharf and urban public area management in Xiongxian County.
Focus on customer satisfaction
For property enterprises, customer satisfaction is a key factor in considering the level of property services, so property enterprises should also pay attention to improving service capabilities to enhance customer stickiness. Just like the concept of Jinmao Service: "Only customer satisfaction can bring sustainable development of enterprises".
At the performance meeting, the management of Jinmao Service said that the company has always attached great importance to customer research. "We continue to gain insight into customer needs, comprehensively collect customer voices, and effectively improve overall customer satisfaction."
In the first half of this year, Jinmao Service closely followed the needs of customers and actively established a variety of owner communities. As of June 30, it has established more than 270 Maolin Li communities, and continued to expand IP cooperation resources and carry out exclusive IP activities.
The growth section of Rumaolin Li has created community cultural activities such as children's growth training camp, summer children's fun season, flea market and other community cultural activities around different themes of spring, summer, autumn and winter, and continues to explore and expand the relationship and connection between the community and children's education, entertainment and life, and provide customers with more creative and interesting experiences.
In terms of value-added services, Jinmao Service pays attention to the construction of customer service system. For example, in terms of life services, based on the services of community owners, Jinmao Services has made some attempts in housekeeping services, indoor services, storage spaces and other services. "In the second half of the year, we will also promote vehicle services in some high-end projects and high-net-worth customers across the country."
In the Mercure business, Jinmao Services has made great breakthroughs in the loading of new house space while integrating Jinmao's original U+ business, and has also tried some self-operated projects.
Taking Quanzhou Petrochemical as an example, Jinmao Service not only provides basic property services such as security, cleaning, and central control, but also provides value-added services such as canteen group meals, shuttle bus transfers, and conference services for the park with refined and humanized management, meeting the diversified needs of enterprises.
While the integration of the property industry continues to accelerate, people's requirements for property service quality are also increasing. Jinmao Services is also continuing to carry out digital exploration and practice based on material-based management, human services, operation efficiency improvement, and the development of new businesses.
Through the application of artificial intelligence technology to provide personalized, accurate and timely customer service, focus on customer experience, aggregate and process customer feedback data through omni-channel touchpoints, establish an intelligent front-line operation work supervision system, effectively improve operational efficiency, and make operations more standardized and efficient.
In addition, Jinmao Service has also built a community IoT management platform to effectively evaluate community operations through digital means to achieve efficient operations and high-quality services. "These efforts will effectively support the company's quality development and help the company provide high-quality services to owners."
"A fundamental and guarantee for the development of any market-oriented enterprise, without word of mouth and customer satisfaction, our marketization is pale," said the management of Jinmao Services when talking about market recognition. For Jinmao Services, digital investment, investment in customer research, and investment in the layout of new business areas are all long-term investments, "We also believe that we can play a very large long-term effect." ”