Redsun Services Group Limited (“Redsun Services” or the “Group”), a fast-growing comprehensive community services provider with a strong presence in the Yangtze River Delta region, has announced its annual results for the year ended 31 December 2021 (“FY2021”). The Group reported steady growth in its three business lines of property management services, value-added services for non-property owners and community value-added services, as well as continued improvement in management scale and profitability.
FY2021 Highlights:
— The Group’s revenue was RMB1130.0 million, representing an increase of 47.2% compared with FY2020.
— The breakdown of the Group’s revenue by business line is as follows:
1) Revenue from property management services was RMB753.6 million, representing a year-on-year increase of 51.9% and accounting for 66.7% of the total revenue.
2) Revenue from value-added services for non-property owners was RMB180.3 million, representing an increase of 11.8% compared with last year and accounting for 16.0% of total revenue.
3) Revenue from community value-added services surged by 77.6% to RMB196.1 million, accounting for 17.4% of total revenue.
— Gross profit margin was 28.4%, an increase of 0.5 percentage points compared with FY2020.
— Profit attributable to equity shareholders was RMB128.0 million, an increase of 83.4% as compared with FY2020.
— As at 31 December 2021, the Group had total 338 contracted projects with a contracted GFA of approximately 52.6 million sq.m., in which 234 projects under management with GFA of approximately 36.4 million sq.m., representing an increase of approximately 34.7% as compared with 31 December 2020.
— The Group has a good cash position with cash and equivalents amounting to RMB697.6 million.
Three-pronged development strategy, actively exploring new development pathways
The Group recorded total revenue of RMB1130.0 million, representing a year-on-year increase of 47.2%. Revenue from community value-added services achieved a significant growth of 77.6%; revenue from property management services increased by 51.9% when compared with FY2020; and revenue from non-property owner value-added services increased by 11.8%. Overall profit reached RMB320.4 million, representing a year-on-year growth of 49.5%, and the overall profit margin reached 28.4%, up 0.5 percentage points versus FY2020. Profit attributable to equity shareholders was RMB128.0 million, an increase of 48.2% as compared with the adjusted figure RMB69.8 million recorded in FY2020. Net profit margin reached 12.2%, which was basically the same as the previous year. The Board of Directors does not recommend the payment of a final dividend for the year ended 31 December 2021 (2020: HK6.2 cents).
The Group has a healthy cash position with cash and cash equivalents amounting to RMB697.6 million. The Group was in a net cash position and financially sound as at 31 December 2021.
As at 31 December 2021, the Group provided property management services and value-added services in 59 cities in China, with 338 contracted projects and contracted GFA of approximately 52.6 million sq.m., representing an increase of approximately 31.8% when compared with 31 December 2020, of which the GFA under management was approximately 36.4 million sq.m (with commercial GFA under management of 4.76 million sq.m), an increase of approximately 34.7% from December 31 2020. During the period, the Group’s GFA under management from third-party developers increased from 51.7% in 2020 to 58.0% in the year end of 2021, and the public construction and other GFA under management increased seven times, further demonstrating the Group’s ability to expand externally.
During the year, the Group leveraged the “residential + commercial” dual-driven model, to expand its non-residential business portfolio while strengthening its cooperation and merger and acquisition efforts. The Group entered into an equity cooperation arrangement with Wuhan Huidehang Elite Property Service Co., Ltd. to complement each other in terms of regions and sectors, which increased the Group’s market share in the Central China region. The Group acquired 80% interest in two Nanjing-based property management enterprises, namely Gaoli Property Services Co., Ltd. and Jiangsu Gaoli Meijia Property Co., Ltd., to achieve leapfrog development in the non-residential property service submarket and filled the gap in the property management submarket of the automobile display venue industry.
In addition, the Group gave play to its advantage of “home-base” in Nanjing to expand its urban services development tracks and establish a presence in the public construction sector. Following the strategic cooperation with Taishan Street, Jiangbei New District, Nanjing in 2020, the Group signed a strategic agreement with Xigang Street, Qixia District, Nanjing in 2021, which focused on the incubation and expansion of projects in sectors such as public services and municipal management services, in a bid to develop the urban service sector. The Group has successively gained a foothold in various residential communities to help steadily promote the renovation of old residential communities and provide intensive and comprehensive urban services, demonstrating a sound brand clustering effect.
Great efforts in providing quality services: Further enhance service capabilities to meet the increasing demand for high-quality products
Looking ahead, the Group will continue to adhere to its “customer-centric” service philosophy and further improve service standards. It will also continue to enrich the service offerings and standards of its product lines and achieve rapid replication of service standards, so as to ensure continuous customer satisfaction and maintain its brand reputation. For residential properties, the Group will further upgrade scenario-based community services and optimize the living experience. For non-residential properties, the Group will leverage the success of its benchmark projects to accelerate the market expansion of non-residential properties. For urban services, the Group will build regional economies of scale by utilizing its service quality and brand influence in Taishan Street in Jiangbei New District and Xigang Street in Qixia, continue to develop the core competitiveness of its urban services and enhance its capabilities in grassroots community governance.
Great efforts in operations: Further achieve leapfrog improvement in operating capabilities
Leveraging its “residential + commercial” dual-driven strategy, the Group will achieve steady growth in the scale of property management. Strategically, the Group will focus on the Greater Jiangsu Region and core cities where it has already established a foothold in order to accelerate the expansion of the non-residential market and further optimize the market structure and management density. Tactically, it will focus on urban services and push ahead with marketization. The Group is aiming to expand into third-party projects through multiple channels such as tendering and bidding and strategic cooperation. The Group will further build a “platform + ecosystem” value-added community service chain to meet the diversified and multi-layered needs of residents.
Great efforts in innovation: Further strengthen innovative capabilities to promote high-quality development
Empowered by technology and intelligence, smart property development has become the dominant trend and is a powerful tool that the Group can leverage. The Group’s intelligent construction in 2022 mainly comprises four major smart platforms, namely, “Hongtu Panoramic Smart Data Platform”, “All-Dimensional Planning and Management Platform”, “Redsun Services APP” and “Hong Life APP”. The Group will continue to accumulate technological achievements and smart platform operation experience to improve service quality, operational efficiency, digital decision-making capabilities and management, as well as real-time response time, which in turn will help to enhance management precision and [control] efficiency.
In addition, the Group has grasped the new opportunities brought about by smart and low-carbon development in line with the “carbon peaking and carbon neutrality” goals, to enhance its technological strengths and the competitiveness of its independent intellectual property rights, thereby facilitating the upgrade of its property management services. In 2021, the Group was granted a utility model patent technology by the China National Intellectual Property Administration for the first time, which makes full use of artificial intelligence and the AIOT platform to realize interconnectivity, enabling thorough understanding of the operation of drainage pipelines, facilitating prompt response to flooding, and thereby ensuring a safe commute for property owners. The Group also won the 2021 China Excellent Listed Property Management Companies by ESG Development.
In the future, Redsun Services will practice the “Yan’an Spirit” in the new era, remaining true to its beliefs with perseverance and persistence. The Group will endeavor to become a venerable property services operator by continuously enhancing its service quality, operational efficiency and innovative capabilities to reward all employees and shareholders with high-quality and sustainable growth.
About Redsun Services Group Limited
Established in Nanjing in 2003, Redsun Services Group Limited is a fast-growing comprehensive community service provider focusing on the Yangtze River Delta. With a vision of “making lives warmer,” the Group has provided and endeavors to continue to “provide customers with high-quality services with sincerity” to better serve its customers. The Group has established the regional leading position in the property management market of Jiangsu province and is well-recognized nationwide. The Group was recognized as one of the Top 100 Property Management Companies by CIA for four consecutive years since 2017 and ranked 19th among the 2021 Top 100 Property Management Companies in terms of overall strength. In December 2020, the Group was included by FTSE Russell in the FTSE Global Micro-Cap Index. In 2021, the Group was selected as a constituent of the Hang Seng Property Service and Management Index.
Topic: Press release summary