S-Enjoy Service Group (1755) H2 2023 earnings summary

Executive summary

• Revenue rose 4.7% YoY to RMB5,424.3m; growth in property management and community-related services offset a 36.2% decline in developer-related services.

• Core property management and community-related value-added revenue grew 13.0% YoY; profit attributable to owners increased 5.1% to RMB445.0m.

• GFA under management rose 12.8% to 223.7m sq.m.; net operating cash inflow was RMB423.7m, improving with tighter working-capital control.

Financial highlights

• Gross profit increased 7.5% to RMB1,438.5m; operating profit rose to RMB623.7m from RMB601.9m.

• Profit for the year grew 7.0% to RMB507.9m; profit attributable to owners rose 5.1% to RMB445.0m.

• Revenue increased 4.7% to RMB5,424.3m, while cost of sales and services rose 3.8% to RMB3,985.8m.

Outlook and guidance

• 2024 plans include delivering new property-management projects and focusing expansion on high-quality work in familiar cities, while reviewing existing projects for optimization.

• Plans to grow recurring community services, catering and public-resources management; charging-spot management is expected to contribute better results in 2024.

• Cost-control measures introduced in H2 2023 target labor, outsourcing and energy costs, with improved operational efficiency and more robust profitability as objectives.

• Proposed 2023 final dividend of RMB0.205 per share, equivalent to an approximately 40% payout ratio; management intends to gradually raise the ratio if conditions permit.