Text/Leju Finance Fan Huiru
Compared with last year's stepping on the paper, Dongyuan Renzhi Service avoided opening a large army and announced its performance report 10 days ahead of schedule.
On March 20, the second annual performance report card after listing was submitted, and Dongyuan Renzhi Service can be said to have completed a big "project". Not only did it restate the financial data for 2022, but it also reclassified the traditional three business lines.
This means that Dongyuan Renzhi Service not only needs to compile the financial data for 2023, but also re-sort out the data of various dimensions in 2022 according to the latest business lines, which can be seen in the workload.
However, the capital market has always valued the result more than the process. Dongyuan Renzhi Service's net profit has fallen for two consecutive years, and this year it has fallen in half.
According to the information disclosed in its annual report, the revenue in 2023 will be about 1.484 billion yuan, an increase of 10% from about 1.349 billion yuan in 2022.
Gross profit was approximately $212 million, representing a decrease of approximately 24.0% from approximately $279 million in 2022. The gross profit margin was approximately 14.3%, a decrease of approximately 6.3 percentage points from approximately 20.6% in 2022.
The profit for the reporting period was about 21.9 million yuan, a decrease of about 76.2% from 92 million yuan in 2022. The profit attributable to shareholders of the Company in the reporting period was approximately RMB19 million, a decrease of approximately 78.6% from approximately RMB88.5 million in 2022.
Although the net profit is much worse than before, the dividend payout ratio of Dongyuan Renzhi Service is still only increasing. The Board of Directors has recommended the payment of a final dividend of RMB0.03 per share (tax inclusive) for 2023, representing a payout ratio of approximately 10.7%, compared to approximately 9.5% in the previous year.
Exposure of related party acquisitions
Among the many property companies that have released annual performance reports, Dongyuan Renzhi Service is definitely a refreshing existence. At the beginning, he blew up a related party acquisition.
"On January 31, 2023, the Company acquired Shanghai Halo Sea Technology Co., Ltd. through a business combination of jointly controlled entities
99% equity".
However, perhaps because the transaction amount did not meet the necessary disclosure standards, Dongyuan Renzhi Service did not announce the acquisition last year.
Leju Finance's "Property K-line" checked industrial and commercial information and learned that Shanghai Dazzle Sea Technology Co., Ltd. (hereinafter referred to as "Dazzle Sea Technology") underwent an equity change on June 19 last year, from Dima Co., Ltd., the controlling shareholder of Dongyuan Renzhi Service, to Dongyuan Renzhi Service.
Specifically, the direct controlling shareholder of Dalun Sea Technology Co., Ltd. was changed from Shenzhen Dexterium Wisdom Technology Co., Ltd. (hereinafter referred to as "Shenzhen Dexterium") to Chongqing Qicheng Information Technology Co., Ltd. (hereinafter referred to as "Chongqing Qicheng") and Tianjin Dazzling Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as "Tianjin Dexterium"), which held 99% and 1% of the shares respectively.
Among them, the 100% controlling shareholder behind Shenzhen Drills is Dima shares, while Chongqing Qicheng is 100% directly controlled by Dongyuan Renzhi Service. In this way, it is also consistent with the disclosure in the annual report that Dongyuan Renzhi Service has obtained 99% of its equity.
It is precisely because of this acquisition that Dongyuan Renzhi Service retrospectively restated the financial information for 2022. But unexpectedly, the inclusion of Daxing Sea Technology did not bring positive growth to its net profit, but decreased by 2.208 million yuan.
The annual report did not disclose the intention of Dongyuan Renzhi Service to acquire a loss-making company of related parties, which also made some industry insiders question the reasonableness of this transaction.
After all, in the context of the property management industry's continuous exposure of real estate related to the blood transfusion of property enterprises, any abnormal transaction will provoke the sensitive nerves of the market, thereby triggering a crisis of confidence.
Subvert the traditional division of business
Dongyuan Renzhi Service, which has always been low-key, has made two sets of unexpected moves in this annual report. In the latest annual report, in addition to the above-mentioned related party transactions, Dongyuan Renzhi Service also made bold business classification adjustments.
That is, from the original property management services, community value-added services, and non-owner value-added services, these three traditional division standards have been changed to property city services, better life services, foreign-related, science and technology, medical and other comprehensive services.
But no matter how it is divided, as long as there is no substantial change in the business, it is nothing more than old wine in new bottles.
According to the explanation of Higashihara Renzhi Service:
Property city services, including the provision of property management services to residential and local non-residential properties, including security services, cleaning services, gardening services, facilities management services and maintenance services.
2. Better life services, including community activity planning services, parking space management and agency services, public facilities maintenance services, and other good life services.
3. Foreign-related, science and technology, medical and other comprehensive services, including services provided to foreign-funded enterprises, foreign embassies, international schools, hospitals and medical facilities, as well as other comprehensive services, such as co-marketing services, pre-planning services, digital and intelligent technology services, maintenance and rectification services.
In general, there are two major changes: one is to remove the four types of property services such as foreign-funded enterprises, foreign embassies, international schools, and hospitals from the original property management services and classify them separately;
The "Better Life Service" is somewhat similar to the previous community value-added services.
Gross margin fell to a record low
Judging from the latest types of business divisions, in addition to the increase in income of property city services with the growth of the area under management, the rest of the better life services and comprehensive services such as foreign-related, science and technology, and medical care have declined to varying degrees.
Among them, the revenue from property city services was approximately RMB873 million, accounting for 58.8% of the total revenue, an increase of approximately 33% from RMB656 million in 2022.
Revenue from better life services amounted to approximately RMB222 million, accounting for 14.9% of the total revenue, representing a decrease of approximately 14.4% from RMB259.5 million in 2022.
The revenue from foreign-related, science and technology, medical and other comprehensive services was approximately RMB389 million, accounting for approximately 26.3% of the total revenue, a decrease of approximately 10.3% from RMB434 million in 2022.
At the same time, the gross profit margin of Dongyuan Renzhi Service has fallen to a record low, about 14.3% overall, and from the perspective of the three business lines, there are varying degrees of decline.
Among them, the gross profit margin of property city services was about 12%, followed by about 15.1% of comprehensive services such as foreign-related, science and technology, and medical services, down 8.4 percentage points from 23.5% in 2022, and better life services decreased slightly by 0.7 percentage points.
In terms of scale expansion, the total construction area under management of Dongyuan Renzhi Service was about 60.2 million square meters, a year-on-year increase of about 19.0%.
The total GFA contracted was approximately 68 million square metres, representing a slight increase of 3.5%.