S-Enjoy Service Group (1755) H2 2024 earnings summary

Executive summary

• Revenue declined 6.8% year-over-year to RMB5,055.6 million, with significant drops in value-added services and a sharp swing to a net loss of RMB875.6 million from a profit of RMB507.9 million in 2023.

• Gross profit fell 34.9% to RMB936.6 million, with gross margin dropping 8.0 percentage points to 18.5%.

• The company’s catering services grew over 20% year-over-year, now accounting for about 10% of total revenue.

• The board meeting to approve audited results was postponed due to audit finalization delays; trading remains suspended.

Financial highlights

• Property management services revenue rose 0.6% to RMB3,576.0 million, now 70.8% of total revenue.

• Community-related value-added services revenue dropped 9.9% to RMB1,184.8 million; developer-related value-added services plunged 46.9% to RMB294.8 million.

• Gross profit margin for property management services fell to 16.6% (from 24.0%), community-related to 26.4% (from 35.7%), and developer-related to 10.5% (from 20.8%).

• Basic and diluted loss per share was RMB0.96, compared to earnings per share of RMB0.52 in 2023.

• Administrative expenses (excluding goodwill impairment) were RMB488.7 million, up 0.6% year-over-year.

• Income tax expense decreased 48.2% to RMB71.4 million.

Outlook and guidance

• Management expects continued prudent strategy in 2025, focusing on core business quality and customer satisfaction.

• Revenue from related-party services is expected to further decline, with new connected transactions capped at RMB120 million in 2025.

• The company is confident in continued growth of catering services, with annualized contract value exceeding RMB600 million.