S-Enjoy Service Group (1755) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 reached RMB2,770.4 million, up 3.3% year-over-year, mainly driven by property management services growth.

• Net profit attributable to owners was RMB301.6 million, a 2.7% increase year-over-year, with a net profit margin of 12.0%.

• Operating cash inflow improved to RMB20.6 million from the previous year.

• Property management services revenue grew 12.6% year-over-year, while community-related and developer-related value-added services declined 8.8% and 22.3%, respectively.

• Strategic shift underway toward existing residential markets and recurring community services, with a focus on profitability and professionalization.

Financial highlights

• Property management services revenue was RMB1,907.9 million (+12.6% YoY), accounting for 68.9% of total revenue.

• Community-related value-added services revenue declined 8.8% to RMB645.9 million, with recurring services now 84.9% of segment revenue.

• Developer-related value-added services revenue dropped 22.3% to RMB216.6 million.

• Gross profit increased 5.0% to RMB753.2 million; gross margin rose to 27.2% from 26.8%.

• Basic and diluted EPS were both RMB0.35, up from RMB0.34 year-over-year.

Outlook and guidance

• Strategic focus is shifting from new construction projects to the existing residential market due to reduced opportunities and increased uncertainty in new builds.

• The company aims to enhance profitability and scale in recurring community value-added services, with ongoing organizational and process improvements.

• Continued focus on high-quality development and reducing reliance on real estate developer services.