Country Garden Services had an income of 43.993 billion yuan in 2024. Xu Binhuai: The goal has been basically achieved.

On March 27, Country Garden Services (6098.HK) released its annual report for 2024. The data shows that its annual revenue was 43.993 billion yuan, a year-on-year increase of 3.2%; the gross profit was 8.4 billion yuan, a year-on-year decrease of 3.8%, but the net profit was 1.875 billion yuan, a year-on-year increase of 262.8%. The core profit attributable to shareholders was 3.038 billion yuan, less than that of the previous fiscal year.

As of the end of 2024, the paid management area of Country Garden Services reached approximately 1.037 billion square meters, and the paid management area of the "Three Supplies and One Industry" business was approximately 90 million square meters. The total of the two was 1.127 billion square meters.

Xu Binhuai, the President of Country Garden Services Group, said that in 2024, the company basically achieved the goals set at the beginning of the year in core indicators such as revenue, profit, and cash flow.

From left to right are Lin Wentao, General Manager of Investor Relations of Country Garden Services Group, Huang Peng, Executive President and Chief Financial Officer, Xu Binhuai, Executive Director and President, Zhang Yanzhi, Vice President and General Manager of the Operation Management Center, and Zhao Xiaoguang, Vice President and Chief Technology Officer.

While announcing the latest financial report data, Country Garden Services plans to distribute a total dividend of 0.2961 RMB cents per share (a final dividend of 13.52 cents per share and a special dividend of 16.09 cents per share), with a total of approximately 990 million yuan, accounting for approximately 55% of the net profit attributable to the parent company in 2024.

Country Garden Services also plans to use no less than 500 million yuan to repurchase or buy back shares in 2025 for market value management.

01

The core businesses of Country Garden Services mainly include property management services, community value-added services, and the "Three Supplies and One Industry" business.

Among them, in 2024, the revenue from property management services was approximately 25.91 billion yuan, a year-on-year increase of approximately 4.9%, accounting for 58.9% of the total revenue; the revenue from community value-added services was approximately 4.194 billion yuan, a year-on-year increase of approximately 11.8%, accounting for 9.5% of the total revenue; the revenue from the "Three Supplies and One Industry" business was approximately 8.16 billion yuan, a year-on-year increase of 25.1%. Among them, the property management revenue was approximately 6.539 billion yuan, and the heating business revenue was approximately 1.617 billion yuan.

In addition, in 2024, the revenue from Country Garden Services' urban services reached approximately 4.168 billion yuan, a year-on-year decrease of approximately 14.7%; the revenue from commercial operation services was approximately 627 million yuan, a year-on-year decrease of approximately 38.1%. The proportion of urban services and commercial operation services in the total revenue further decreased.

Revenue data in 2024

At the performance meeting, Huang Peng, the Chief Financial Officer of Country Garden Services, said that the decline in the revenue of the urban services business was due to the company's active suspension of some projects with difficult collections and low profits. The decline in the total revenue of the commercial operation services business was mainly due to the termination of the contracts of the commercial operation assets of the related parties and other property owners.

Huang Peng said that in 2024, due to factors such as changes in the property owners in the commercial operation services, the revenue decreased by nearly 1 billion yuan, and the corresponding profit decreased by more than 100 million yuan. "But this is a one-time and accidental event."

In addition, Country Garden Services' performance in the new energy business was remarkable. As of the end of 2024, "Smart Shared Downstairs Charging" had cumulatively operated approximately 50,000 charging piles, a year-on-year increase of 173%, and had cumulatively operated nearly 500,000 charging sockets, covering more than 4,000 communities, with more than 3.4 million registered users. There were 8.619 million charging person-times, and the revenue from the marketing and advertising function alone exceeded 1.7 million yuan.

At the performance meeting, the management said that in 2025, Country Garden Services will continue to make structural adjustments to its business, reduce investment in some businesses that rely on financing for development, focus on developing sectors with self - generating capabilities, and optimize financial indicators.

02

In addition to ensuring growth, since property management companies are strongly related to the development business of their parent companies, with the decline in the performance and payment ability of real estate development companies, the accounts receivable data between affiliated companies has also become a major concern in the market regarding the cash flow health of property management companies.

As of December 31, 2024, the net trade receivables of Country Garden Services were approximately 17.689 billion yuan, an increase of approximately 1.311 billion yuan compared with the end of 2023. Due to the need to improve the comprehensive fee collection progress of each business, the payment collection cycle of customers in the company's property management services and urban services has become longer. At the same time, the corresponding trade receivables have increased due to the rapid increase in the revenue scale of the "Three Supplies and One Industry" business.

Among them, the trade receivables from Country Garden Holdings and its subsidiaries were approximately 2.365 billion yuan, a decrease of approximately 392 million yuan compared with the end of 2023. At the same time, in 2024, Country Garden Services reversed the total expected credit loss provisions that had been made for the trade receivables from Country Garden Holdings and its subsidiaries by approximately 311 million yuan.

Data source: Company official

Huang Peng revealed that in 2024, Country Garden Services had given a higher priority to the collection of various debts. A special task force was established within the company, directly led by senior management. Tasks were assigned to individuals, and a task map was established for each account. According to different risk situations, classified response measures were taken, including debt - for - asset swaps, cash collection, offsetting of accounts receivable and payable, litigation, and arbitration. At the same time, strict access conditions were set for customer selection in new projects.

"Our payment terms, for example, are about one month. If the payment cannot be made in time, the business will be immediately terminated, so the overall controllable risk exposure of high - risk customers is under control." Huang Peng said. However, "there are still a large number of accounts receivable on the company's balance sheet, so dealing with long - aged accounts receivable will still be one of the core tasks in 2025. This year, some flexible asset - handling methods may continue to be adopted, which will result in some one - time losses. But in the long run, this kind of handling will have a short - term impact on profits and is beneficial to the optimization of the overall financial statements and the recovery of cash flow."

Judging from the cash flow situation, the cash flow pressure of Country Garden Services has been relieved. The net cash generated from operating activities in 2024 was 3.87 billion yuan.

As of December 31, 2024, the total bank deposits and cash (including restricted bank deposits and time deposits) of Country Garden Services were approximately 18.179 billion yuan, an increase of approximately 5.239 billion yuan compared with the previous year.

Xu Binhuai said that the core work of the company in 2025 is to "stabilize the situation, ensure growth, and seek breakthroughs", and to strive for a long - term goal of a 1:1 ratio between net cash flow and net profit.

"While looking up at the stars, we also need to focus more on building core capabilities, bid farewell to extensive growth, and return to endogenous development to gain greater development and growth possibilities." Xu Binhuai said that Country Garden Services will continue to deepen its operational capabilities, AI capabilities, and organizational capabilities to ensure the company's performance growth.