Runhua Living Service Group Holdings (2455) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 11.0% YoY to RMB768.4 million; gross profit increased 9.1% to RMB133.2 million, while profit grew 3.3% to RMB41.7 million.

• Gross margin eased 0.4 percentage point to 17.3%; basic EPS fell 22.2% to RMB0.14.

• Property management remained the main business, contributing 91.3% of revenue, with hospital-related growth a key driver.

Financial highlights

• Revenue was RMB768.4 million, up 11.0% YoY; cost of services rose 11.5% to RMB635.2 million.

• Gross profit increased to RMB133.2 million from RMB122.2 million; gross margin declined to 17.3% from 17.7%.

• Profit before tax rose to RMB54.5 million from RMB51.7 million; net profit was RMB41.7 million, up 3.3%.

• Administrative expenses increased 14.9% to RMB78.7 million, while selling and distribution expenses fell 73.7% to RMB1.5 million.

• Basic and diluted EPS was RMB0.14 vs RMB0.18; no final dividend was recommended.

Outlook and guidance

• Growth plans emphasize organic expansion in Shandong, increasing share in existing cities, and pursuing acquisitions or collaborations, with a focus on high-end hospitals and public properties.

• Plans also target developed neighboring markets, including the Yangtze River Delta and Beijing-Tianjin-Hebei regions, through acquisitions of established local property managers.

• IPO proceeds are intended to support property-management investments and acquisitions, IT development, and staff motivation; the timeline for full use is by end-2025.