HONG KONG, Apr 1, 2020 - (ACN Newswire) - On 31 March 2020, A leading enterprise in the property management industry in Nanjing and Jiangsu Province, the PRC, Yincheng Life Service Co., Ltd ("Yincheng Life Service" or "the Company", together with its subsidiaries, "the Group") (Stock code: 1922), announced its annual results for the Period ended 31 December 2019 (the "Period").
From left to right: Ms. Huang Xuemei, Executive Director and Vice President; Mr. Xie Chenguang, Chairman and Non-executive Director; Mr. Li Chunling, Executive Director and President and Mr. Wu Jianwei, Financial Controller
- Revenue Increased by 48.8% YoY to RMB695.8 Million
- Core Net Profit Increased by 68.6% YoY to RMB45.7 Million
- Gross Profit Increased by 68.4% YoY and Gross Profit Margin Increased to 16.1%
- GFA under Management Increased by 68.4% and Contracted GFA Increased by 38.1%
- Seizing Opportunities in the Industry, Undergoing Project Development and Industry Mergers and Acquisitions
The increase in revenue and core net profit by approximately 48.8% and 68.6% respectively, while gross profit margin increased to 16.1%
In 2019, as the number of projects managed by the Group increased, the revenue for property management services rose accompanied by the expanded scope of community value-added services due to the continuous development of the Group's business. During the Period, the Company's revenue rose by 48.8% YoY from RMB467.7 million to RMB695.8 million. Among them, due to the continuous growth in the GFA under management, the revenue from the property management services reached RMB553.1 million, an increase of 50.5% YoY from RMB367.6 million from the last Period, accounting for 79.5% of total revenue. The expansion of the GFA under management and the substantial increase in the number of users served raised the revenue from community value-added services to RMB142.7 million, an increase of 42.7% from RMB100.0 million in the same period last Period and accounted for 20.5% of total revenue. Profit for the Period was approximately RMB33.2 million, an increase of 22.5% from approximately RMB27.1 million in 2018. Excluding listing expenses, the Group's core net profit was RMB45.7 million, a significant increase of 68.6% YoY was noticed, and the core net profit margin increased by 0.8 percentage points to 6.6%. The increase in core net profit margin was mainly attributable to the rapid growth of the Group's business and the effect of cost scale while improving the operating conditions of second-hand property management projects undertaken. The gross profit increased by 64.8% to RMB111.9 million, mainly due to the increase in revenue and the reduction of investment and the number of third-party real estate developers' projects undertaken by the Group gradually entered the mature stage. Gross profit margin was 16.1%, an increase of 1.6 percentage points from 2018 was seen.
Deeply engaged in developed cities in the Yangtze River Delta Megalopolis with Nanjing being the regional focus
As of December 31, 2019, the Group's business covered 15 cities in China, including 10 cities in Jiangsu Province and 5 cities in other provinces in the Yangtze River Delta metropolis, with the GFA under management of approximately 26.1 million square meters. The Company managed 239 properties, including 116 residential properties and 123 non-residential properties, serving more than 140,000 households. Despite being a leading company in Nanjing's property management industry, Yincheng Life services still has a huge room for growth in terms of its market share in Nanjing due to the high degree of market fragmentation. While actively acquiring new projects for expansion, the Group also improved its overall profitability by enhancing the efficiency of its second-hand property management projects. As an expert on second-hand property management projects, the Group successfully made profits from 18 second-hand property management projects during the Period, and these projects is believed to help increasing the Group's future profits.
68.4% increase in GFA under management and 38.1% increase in contracted GFA
In tandem with its good reputation in the Yangtze River Delta, trusted brand image, and strong operating ability, Yincheng Life Services has developed rapidly in recent years, and has achieved a compound annual growth rate of more than 58.0% in GFA under management since 2016. As of 31 December 2019, the Group's GFA under management reached approximately 26.1 million square meters with an increase of 68.4% YoY. The contracted GFA reached 30.8 million square meters with an increase of 38.1% YoY, which guarantee the continuous future expansion and stable income.
Benefiting from the rapid growth in contract sales of Yincheng International, the newly taken over contracted GFA of the Group also increased steadily. During the Period, the GFA under management of second-hand property management projects reached 20.7 million square meters, accounting for 79.3% of the Group's total GFA under management. In 2019, the Group submitted 232 tenders for second-hand property management projects, with the tender success rate at approximately at 57.3%, indicating that the Group is actively expanding its scale and has the comprehensive competitiveness to obtain new projects in the market. These newly adopted second-hand projects has either larger management area or higher service fee level.
Project development and industry mergers and acquisitions
Good reputation and brand value are the two important advantages of the Group, they are also the most effective and important factors in bringing new projects in for further expansion. During the Period, the Group obtained 39 non-residential property projects with an increase of 46.4% YoY while for residential projects, an increase of 48.7% YoY to 38 new projects was recorded. Revenue from residential projects and non-residential projects accounted for 62.2% and 37.8% of the revenue, respectively. Meanwhile, the Group actively seeks subjects of acquisitions that are complementary and conducive to its business expansion. During the Period, the Group had 1 merger and acquisition project. In March 2020, the Group successfully ventured into the sector of hospital property management which has a higher gross profit margin by acquiring 51% equity interest in a hospital property management service provider at a consideration of RMB 45.9 million, laying a foundation for the Group to secure more contracts of this type in the future. The Group will accelerate the pace of realizing outstanding project mergers and acquisitions and create more returns for shareholders.
Under the operational philosophy of "exceeding customer expectations and creating value through service", and the service philosophy of "Living+", and the business model of "service alignment, business modularisation, modules specialisation and management digitalisation", the Group has been deeply engaged in regional markets, with customers' satisfaction exceeding 80% for the past years and reaching 84% in 2019, being 11% higher than the average level in the industry according to Beijing Saiwei Consulting CO.,Ltd., an authority research agency. While actively acquiring new customers, the Group strives to maintain long-term service relationships with its existing customers. In 2019, the renewal rate of customers of the Group was over 90%. Due to the owners' recognition of the work of the Group and the efforts of its collection team, the collection rate of the Group's property management fees was high and reached 91.1% in 2019.
XIE Chenguang, Chairman of Yincheng Life Service CO., Ltd, said "2019 is a milestone for us. After Yincheng International Holding Co., Ltd. ((stock code: 1902) together with its subsidiaries, "Yincheng International"), a sister company of the Group, was listed on the Main Board of the Stock Exchange in March 2019, the Group was successfully listed on the Main Board of the Stock Exchange on 6 November 2019, had an outstanding performance with an over-subscription of approximately 382 times in the global offering. This is the first time that two companies which are sister companies to each other were listed on the Stock Exchange within one year. Yincheng Life Service has been deeply engaged in the industry for more than 20 years and committed to provide the highest quality property management services and value-added services to residential communities. It has developed from a local property management service provider in Nanjing to one of the leading property management service providers in Nanjing and the Jiangsu Province. According to the report prepared by an independent third- party industry expert, the Group ranked 1st and 5th in terms of revenue among property management service providers in Nanjing and the Jiangsu Province in 2018, respectively, and ranked 34th among China's Top 100 Property Companies in 2019. The successful entry into the capital market of Hong Kong is an important step for the Group to develop and grow with the power of capital, as well as take a leap from an industrial company to an industrial and capital company.
Looking forward, the property management services industry is on a steady upward trend. In the short run, the Group will continue to make full use of its good reputation, brand value, operational management strength to obtain more new projects, increase its revenue, and enhance its profitability by improving the cost-effectiveness. In the long run, the Group will actively seek acquisition and merger projects which are conducive to its business expansion to further expand the size of its business. Meanwhile, the Group will carefully study and consider new orientation and new business forms, as long as they are in the interest of its shareholders as a whole. As driven by two drivers, namely the property management services and community value-added services, the Group is confident in maintaining steady development and shall ride a wave at the right time. We will continue to optimise our service quality and enhance our brand influence and market competitiveness, and reward the shareholders, customers and society with more brilliant results"
Today, Yincheng Life Service held the 2019 annual results online briefing in Nanjing headquarter. Over 100 fund managers, equity analysts and reporters participated in the event. The management gave the introduction of annual results and answered the participants' questions.
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