Four core business segments created strong synergies with high quality and incremental growth
EQS-News / 31/03/2022 / 22:41 UTC+8
Shimao Services announces 2021 annual results: Four core business segments created strong synergies with high quality and incremental growth
On March 31, 2022, Shimao Service released the unaudited annual results of 2021. For the year ended 31 December 2021, Shimao Service recorded revenue of RMB 8.43 billion, representing a year-on-year increase of 67.7%, and net profit was approximately RMB 1.24 billion, representing a year-on-year increase of 70.7%.
In 2021, the four core business segments created strong synergies and achieved high quality and incremental growth. Among them, the property management services revenue was approximately RMB 4.19 billion, accounting for 49.7% of total revenue; the community value-added services revenue was approximately RMB 2.51 billion, accounting for 29.8% of total revenue; the value-added services to non-property owners revenue was RMB 871 million, and the proportion gradually decreased to 10.3%; the city services revenue achieved leapfrog growth and revenue was RMB 855 million.
GFA under management by third parties accounted for over 75% and other non-residential properties accounted for over 40%.
As at 31 December, 2021, Shimao Service’s contracted GFA exceeded 300 million sq.m., reaching 308 million sq.m., representing a year-on-year increase of 53.2%. The GFA under management reached 241 million sq.m., representing a year-on-year increase of 64.6%. Shimao Service has been managing 830 properties in 107 cities across the country, providing a wide range of services for a wide variety of customers such as residential properties, schools, industrial parks, and hospitals.
It is worth mentioning that, in the contracted GFA, Shimao Group and its cooperating developers accounted for 24.7%, and independent third-party developers accounted for 75.3%. For the GFA under management, the former accounted for 24.2% and the latter accounted for 75.8%. The contracted GFA of non-residential properties reached 123 million sq.m., accounting for 40%; the GFA under management of non-residential properties reached 102 million sq.m., accounting for 42.3%.
The above achievements were contributed by Shimao Service’s strong third-party bidding and market expansion capabilities, as well as a clear M&A strategy.
In 2021, the Group attained exceptional performance in third-party bidding expansion. 61.6 million sq.m. was added to its GFA from third-party bidding expansion, representing a year-on-year increase of 162.1%. Third-party bidding GFA and annualized contract amount have been greatly improved. It obtained quality bids such as Beijing University of Posts and Telecommunications, Chengdu Research Base of Giant Panda Breeding, and other high-quality customers.
Expansion to city services and elderly care service while strengthening professional capabilities
While growing in scale, Shimao Service also cares about the establishment of the talent structure. Through the vertical integration strategy, the Group achieved professional development in subdivided fields, and exploring the market potential of a single business format or sector, thereby strengthening industry-leading advantages.
In terms of investment expansion, since 2021, Shimao Services has acquired 9 companies, including Zhejiang Yefeng Property Service Co., Ltd, Wuhan Ruizhengxindadi Property Management Co., Ltd, Suzhou Tianxiang Real Estate Management Co., Ltd, Hunan Jili Property Management Co., Ltd, Quanzhou Youda real Estate Management Co., Ltd, Zhejiang Xindadi Property Management Co., Ltd, and other 6 property service companies. Hunan Jili Property Management Co., Ltd which integrated the Hunan Xiangya and Provincial hospital systems has a leading position in the Hunan hospital property market, which helps Shimao Service to improve its hospital property service capabilities.
On October 29, 2021, Shimao Service officially introduced the city services business, and positioned itself as a “big manager of the city” with a system to promote the research and development of city service. It also committed to realizing the development vision of ” making the city better with services”.
After preliminary exploration, Shimao Service has not only expanded to 15 model cities such as Sucheng District, Suqian City, but also cooperated with leading municipal sanitation enterprises such as Shi Lu Yuan and Jinshatian, and deployed two key areas of the Greater Bay Area and the Yangtze River Delta, to build the core comprehensive capabilities of urban services. With the advantageous position of Shi Lu Yuan and Jinshatian in the city services and environmental sanitation business, Shimao Services will expand its market share, quickly roll out the Group’s development strategies and grow bigger and stronger with its city services business.
Shimao Services has also reached a strategic cooperation with the elderly care service company Healthcare, which operates an asset-light mode and has successfully launched a home-based elderly care service model based on long-term care insurance policies. With the support of Shimao Services, it will rely on past successful experience and quickly replicate the business across the country.
Based on the mergers and acquisitions mentioned above, on the one hand, Shimao Service has effectively enhanced scale and density in key regions and improved regional comprehensive capabilities; on the other hand, it has rapidly established its city services business network, successfully positioned itself in key business lines on value-added services and developed its core capabilities.
At the same time, Shimao Services carried out integration and enhancement for all the acquired companies. Through the integration of finance, human resources, risk control and business information, all the target companies were able to align with Shimao Services’ standards, implement the internal marketization policy, share resources and achieve comprehensive empowerment to realize higher operational capability, service quality and customer satisfaction.
Comprehensively build a user-responsive organization and cultivate a new engine of value-added services
Through mergers, acquisitions and market expansion, Shimao Services has gained more space and diverse users. In the long run, it is still to cultivate a new engine of value-added services and build lasting competitiveness of the enterprise.
High-quality service is the solid foundation of Shimao’s development. Shimao’s service associated with customer needs. It maintains user relationships in all formats, improves user experience in all service scenarios, establishes key user responses and mechanisms throughout the cycle, and provides omni-channel user satisfaction data monitoring, building a user-responsive organization comprehensively, continuously achieving high-quality services, and ultimately improving customer satisfaction with customer real experience as feedback.
Shimao Service follows the policy of the government to create a community shopping district within 15-minute walking distance in different cities and promotes its “Property + Lifestyle” and “Property + Elderly Care” services. The Company operates independently and provides high-quality products and services focusing on user and their assets, as well as value-added services including local lifestyle, community education, home decoration, elderly care and other services. The Company strives to build the “0-2KM Shimao Community New Ecology” to meet the needs of owners and users.
For instance, Shimao Service has built the “SUNIT” brand, positioning itself as a local lifestyle service platform, providing differentiated and targeted products for property owners as well as building a sales capability of high quality and good experience. In 2021, the revenue of the Company’s new retail services was approximately RMB 4.1 billion, representing a year-on-year increase of 317.3%. In 2022, the Company will continue to expand its sales channels, establish its own supply chain system, increase its brand advantages, and improve its market share.
In addition, in terms of campus value-added services, the Company has been leveraging on Zheda Sinew Group’s resources to offer service for universities and colleges. It provided teachers and students with various value-added services on campus study and life, including catering, accommodation and business trading services. In 2021, the segment revenue reached RMB 462 million, representing a year-on-year increase of 100.3%.
Shimao Services will focus on developing the group catering business. Starting from university group catering business, it will keep abreast of the general trend of social reform in university logistics and expand the scale while enhancing the density of regional group catering projects, and use the group catering business such as enterprises and institutions, hospitals and various parks as an effective supplement to improve the profitability and industry competitiveness of the group catering business.
Looking forward, Shimao Services will continue to take the brand concept of “The Smart Creator of a Better Life”, promote the corporate culture of “Seek Truth and be Pragmatic, Action speak Louder than Words”, insist on being a long-termism, move forward towards the corporate vision of “Leading Urban Full-scene Lifestyle Service Provider in China”, and aiming to achieve independent, healthy, high-quality and high-growth development.