On April 19, Nandu Property Service Group Co., Ltd. released its 2023 annual report.
According to the data, the company's revenue during the reporting period was basically the same as the previous year, but thanks to the successful listing of the investment company, the net profit increased by nearly 30% year-on-year.
In terms of business development, the company is committed to transforming into a comprehensive service provider for urban operations, with 53.6% of the newly signed area of non-residential business during the period, of which urban service projects accounted for 18.7%.
However, the transformation did not bring about an increase in profits, and after deducting non-recurring gains and losses, the net profit attributable to the parent company of Nandu Property did not increase but declined, with a year-on-year decline of more than 30%.
In the new stage of the market, major enterprises are transforming to find a new way out, but whether the direction is correct can only wait for time to give an answer.
Net profit growth
In 2023, Nandu Property achieved operating income of 1.851 billion yuan, a year-on-year increase of 0.23%, which was basically the same as that of the previous year, of which the revenue of property basic services was 1.624 billion yuan, which was the company's main source of income, accounting for 87.9% of the total revenue, the revenue of property value-added services was 169 million yuan, accounting for 9.1%, the revenue of asset management services was 33 million yuan, accounting for 1.8%, and the revenue of value-added services for non-owners was 23 million yuan, accounting for 1.2%.
In its annual report, the company pointed out that the revenue growth was mainly due to the growth in the scale of property service projects. As of the end of the reporting period, the company had a total of 722 contracted projects, with a total contracted area of 88,685,400 square meters, an increase of 3,776,300 square meters over the end of the previous year.
In terms of business formats, the area of residential projects accounted for 63.6%, commercial projects accounted for 25.8%, urban service projects accounted for 10.6%, and the area of non-residential projects increased by 4.4 percentage points over the previous year. From a regional point of view, the Yangtze River Delta region accounted for 88.38%, an increase of 1.38 percentage points compared with 2022.
During the year, the total profit of Nandu Property was RMB256 million, a year-on-year increase of 29.74%, the net profit was approximately RMB196 million, a year-on-year increase of 26.38%, and the net profit attributable to the parent company was approximately RMB186 million, a year-on-year increase of 27.69%. The growth rate of net profit far exceeded the growth rate of revenue.
Judging from the statement data, the fair value change income is the main reason for the company's high growth in net profit, which will record an income of about 127 million yuan in 2023, accounting for 64.94% of the net profit scale, while this item will only be 11.6783 million yuan in 2022. The year-on-year increase was due to the successful listing of Anbang Guard, in which the company invested.
According to Wuliao Agency, on December 20, 2023, Anbang Guard Group Co., Ltd. was listed on the main board of the Shanghai Stock Exchange and is a comprehensive security service provider, whose main business covers three areas: financial security services, comprehensive security services and security emergency services.
Nandu Property holds about 4,032,300 shares of Anbang Guard, accounting for 5% of the total share capital before the IPO and 3.75% after the IPO. After its successful listing, it brought about 117 million yuan of non-recurring profit and loss for Nandu Property for the current period.
The large number of financial assets can be said to be an unstable factor for Nandu Property, after all, not every year there is an "Anbang Guard" that can be listed, and the company's net profit attributable to the parent company after deducting non-profits in 2023 will record a year-on-year decrease of 36.59%, which seems to point out this risk.
According to the annual report, Nandu Property invested 136 million yuan in Zhejiang Gushang Intelligent Technology Co., Ltd. by way of capital increase during the year, with a corresponding shareholding ratio of 17%, and the equity transferor was Nandu Industry and Development Group.
In addition, due to the overall low gross profit margin of the projects expanded by the company in the market, many projects were withdrawn from the market under the intensified competition, resulting in an increase in the overall cost of Nandu property. During the reporting period, the operating cost was 1.555 billion yuan, a year-on-year increase of 4.60%, which was higher than the revenue growth rate.
During the reporting period, the company strengthened its ability to collect payments, and the scale of accounts receivable decreased by 6.22% from the same period last year to 500 million yuan, accounting for about 18.79% of total assets. Net cash flow from operating activities also increased by 18.75% over the same period last year to RMB185 million.
As of the end of the period, the company's monetary funds were about 467 million yuan, the same as the same period last year, accounting for 17.55% of the company's total assets, and the company's short-term borrowings were about 161 million yuan, which was sufficient to cover short-term debts.
The urban service track has been increased
In April 2023, Nandu Property told investors that it would take public construction and urban services as the key areas of the city's expansion. On the one hand, the newly developed residential sector is affected by the fluctuations of the real estate market, and on the other hand, the non-residential sector has a large market space, especially in the urban service sector, which has a broad market to expand and has a certain scale effect.
In 2023, Nandu Property will sign 100 new projects throughout the year, and newly enter the cities of Quanzhou in Fujian, Nanning in Guangxi and Qujing in Yunnan, with a newly contracted area of 10,223,900 square meters. Among them, the area of newly signed residential projects accounted for 46.4%, commercial projects accounted for 34.9%, urban service projects accounted for 18.7%, and newly signed non-residential projects accounted for more than half.
In the field of commercial writing, the company has signed new projects including Yungu Blessed Land, Sino-German Industrial Park, Tiantong Science and Technology Innovation Industrial Base, Deqing Rural Commercial Bank Complex, etc., and in the field of urban services, it has signed new projects such as Lianyungang Second People's Hospital, Hangzhou Bay Accounting Academy, West Lake International Golf Service Center, and Deqing Geographic Information Town Sports Center.
At the same time, Nandu Property added 3 new joint ventures during the year. In April, it signed a contract with Changshu Economic Development Industry City Comprehensive Service Co., Ltd. and established a joint venture company to build a smart industrial park management model and replicate it in the Economic Development Zone and other industrial parks in Changshu City.
In May, it signed an agreement with Hangzhou Kai (Hangzhou) Innovation and Entrepreneurship Park Co., Ltd. to jointly establish Urban Operation Service Co., Ltd., and in October, it established Shaoxing Juxin Smart Property Service Co., Ltd. with Shaoxing Finance and Taxation Printing Co., Ltd. to develop the public property market in Shaoxing.
Various signs reveal that Nandu Property is increasing the urban service track and is committed to transforming and upgrading to a comprehensive service provider for urban operation. But the transformation doesn't seem to have helped the company's bottom line.
During the reporting period, Nandu Property recorded an overall gross profit margin of 16.01%, a year-on-year decrease of 3.53 percentage points. From the perspective of segments, the property basic services segment recorded a gross profit margin of 12.81%, a year-on-year decrease of 4.38%, as the main contribution point of the company's gross profit, the decline in the gross profit margin of the segment also led to a decline in the company's overall gross profit margin.
The property value-added services segment recorded a gross profit margin of 49.44%, an increase of 4.83 percentage points year-on-year, a gross profit margin of non-owner value-added services of 25.17%, an increase of 8.13 percentage points year-on-year, and a gross profit margin of asset management services of -3.59%, a year-on-year decrease of 9.51 percentage points.
However, it seems that Nandu Property is ready to go all the way to the end. Just over a month ago, the company's LOGO was relaunched, no longer with the house as the logo, but with NACITY as the core element, and said that it will focus on the whole business and all scenes of the city, and make the service boundless with an open vision.
At present, most property enterprises are competing on the same stage in the urban service track, including Wanwuyun, Poly Property, Country Garden Service, China Merchants Accumulation, China Resources Vientiane Life, etc.
In 2023, the revenue from public and other properties will reach RMB2.618 billion, accounting for approximately 25.8% of the company's property management service revenue, and the amount of new contracts signed in this format will increase by 36.7% year-on-year to RMB1.506 billion during the year.
Although slightly inferior to the industry leader, Nandu Property has its own "Wuzhen model", and is not satisfied with limiting the comprehensive service model of urban operation to Nandu Property in Wuzhen, and is working hard to replicate the Wuzhen model and implement it to other cities in the Yangtze River Delta region.