Wen/Leju Finance Xu Jiumian

After dormancy for a year and a half, the first property enterprise listed on the Hong Kong Stock Exchange in Central Plains returned to the Hong Kong stock table.

On the evening of June 11, Xinyuan Service (01895. HK) issued a notice stating that all the requirements specified in the Guidelines for Resumption of Trading have been met, and stock trading will resume at the Hong Kong Stock Exchange from 9:00 a.m. on June 12.

Resumption is a good thing, which means Xinyuan The service has passed the tests at all levels, and the burden has been discharged. There will be benefits if there are any good opportunities.

Looking back over the past year and a half, Xinyuan Service actively carried out independent investigation, internal review and publication of relevant results on pledge matters, and then took up legal weapons to win arbitration and resolutely safeguard its own interests.

Under the great changes in the internal and external environment, Xinyuan Service actively resolved the debts of related parties, and successfully recovered the original losses by means of debt repayment. In terms of capital management and crisis response, it demonstrated to the outside world its response to the liquidity crisis of real estate enterprises, as well as its innovative breakthrough ability and responsibility as a listed company, It provides a model for handling similar problems in the industry.

Actively solve and deal with the remaining problems. Xinyuan Service also carries out rectification and optimization of the company's internal control system based on the opinions of professional institutions. After more than a year's efforts, Xinyuan Service, as a listed property enterprise, has become more independent in its operation, the company's internal control system has become more perfect, and all internal control defects assessed by professional institutions have been rectified in place.

After removing the historical baggage, Xinyuan Service successfully reissued a number of audited financial statements. One and a half years after the stock suspension, the development of Xinyuan's service business has not stagnated and has actively adapted to the tremendous changes in the external environment. Xinyuan Service has taken the initiative to reset the corporate strategy, adjust the organizational structure, optimize the talent echelon, strengthen the expansion team, innovate the business layout, and carry out digital reform, so as to maintain the steady overall performance and tenacious growth in the continuous and deep investigation of the industry.

Aggressive debt and return

The suspension of Xinyuan Service began in November 2022. In the process of carrying out year-end asset review and formulating budget procedures in accordance with the financial control procedures, it found that the 402 million fixed deposit of Xinyuan Technology, a subsidiary, was unknowingly pledged.

Following the disclosure of inside information, Xinyuan Service took measures to suspend trading and organized the establishment of an independent investigation committee to investigate.

Xinyuan Service acted quickly to safeguard its own interests. On April 17, 2023, Xinyuan Service submitted the notice of arbitration against Xinyuan Real Estate to the Hong Kong International Arbitration Center for any dispute arising from the mortgage, requiring it to recover any loss and/or damage it suffered from the mortgage.

On October 13, 2023, Xinyuan Service won the arbitration and started the execution of compensation in full swing, including about 402 million of deposit principal, 24.4382 million yuan of interest loss on time deposits, 3.5927 million Hong Kong dollars of audit and investigation costs, and 2.8611 million yuan of arbitration costs, totaling about 433 million yuan, to minimize its own losses.

In view of the liquidity problems faced by related properties, Xinyuan Service accepted the former to offset with related assets. It includes a commercial management company that has packaged several rental businesses, six clubs with 30-year operation rights, and 2181 parking spaces.

The injection of these assets will generate long-term value in the later operation, and add impetus to the future revenue and profit growth of Xinyuan Service.

At the same time, Xinyuan Service also took a number of strengthening and remedial measures on this incident, strengthening the company's internal approval procedures, seal/seal preservation, senior management's supervision and record keeping procedures, to ensure that its internal control has been properly strengthened, and any identified weaknesses and problems have been comprehensively solved.

Stable performance and prominent independence

While actively promoting the settlement of debt problems with related parties, Xinyuan Service, relying on its own resource endowment, brand reputation, etc., has increased its efforts to expand the third-party market.

Data shows that as of December 31, 2023, Xinyuan Service has provided property management services and value-added services to 50 cities in China. The contracted building area is about 55.342 million square meters, with a year-on-year growth of about 9.1%. The number of contracted projects is 288; In the same period, its pipeline area was about 34.35 million square meters, an increase of about 9.4% year on year, and the number of pipeline projects was 218.

With the growth of scale, the service independence of Xinyuan is prominent. In terms of the proportion of the third party, 2023 will rapidly enter the stage of steady improvement. In the same period, the proportion of the third party market in the contract area will reach 60%, and the proportion of the third party in the management area will also reach 53%.

It is worth mentioning that Xinyuan Service has more strict control over project quality. In 2022, it actively optimized the third-party projects with low plateau efficiency; In 2023, the overall property service efficiency will be greatly improved while the contract and management area will increase.

Relying on the construction of red property, strengthening the cooperation of stock projects, and relying on the deep participation in livelihood projects such as the old renovation, urban renewal, and elderly care services, Xinyuan Service has completed the transformation from the incremental market to the stock market, extending from the residential business to the non residential business, and further opening the business development model and service boundaries.

In terms of development layout, Xinyuan Service pays more attention to the deep cultivation of regional concentration. By 2023, its pipeline area in Henan Province is about 19.03 million square meters, accounting for 55.4% of the total pipeline area; The contribution of property management revenue was 283 million yuan, accounting for 53%.

Focusing on steady and high-quality development, Xinyuan Service will achieve an operating income of 750 million yuan in 2023, up 9.2% year on year; During the same period, the gross profit was 240 million yuan, up 5.2% year on year, and the net profit was 28.413 million yuan.

Among them, the basic property service as the ballast achieved an income of about 534 million yuan in the past year, with a year-on-year growth of 7.72%. It has maintained steady growth for three consecutive years in the industry adversity, and its foundation is very stable. In addition, the income from property engineering services in the same period was about 74.631 million yuan, a year-on-year increase of 118%; The value-added service revenue was about 116 million yuan, up 7.72% over the same period of 2022.

Despite the impact of the continuous decline of real estate on the industry and the double pressure of bad debt provision for some related transactions, the performance of Xinyuan Service has returned to steady growth. At the same time, by the end of 2023, the balance and cash of Xinyuan Service Bank was about 259 million yuan, a slight increase of 0.28% year on year.

Technology enables future development

Based on scale development, with multi economy and technology as the support, Xinyuan Service is committed to becoming the largest property management industry in the universe Good life Service providers focus on building core scientific and technological capabilities and constantly improve the competitiveness of the industry.

Focusing on customer needs, Xinyuan Service focuses on "smart property" and "smart community", actively embraces new technologies such as digital twins, Internet of Things, big data, artificial intelligence, innovatively explores the XinMeta big property management industry meta universe service platform, takes the lead in breaking through the zero code three-dimensional modeling technical problems, and makes property services more efficient, intelligent, and visual.

In 2023, Xinyuan Service will complete the construction of digital platforms including smart parking, smart electricity meters and other systems, develop energy consumption systems, storage systems and other systems, and form a "five in one" customer service ecosystem including enterprise WeChat and "Xinyijia". Through technology empowerment, it has achieved significant cost reduction and efficiency increase results in smart property management.

Focusing on property services, life services, asset operations, smart services, etc., Xinyuan Service provides owners with multi industry and full life cycle services. Through smart service platforms such as "Xiaoxin Best Choice" Mall, Xinyuan Service has built a 15 minute convenient service circle, greatly improving service efficiency and opening up the growth space of the service market.

At the October 2023 International Trade Fair, the case sharing of Xinyuan Service on XinMeta's big property management industry meta universe platform won wide attention and recognition from peers.

Data driven large property management industry meta universe multi scenario service ecology, Xinyuan Service focuses on property+life services, continues to tap the community's O2O value and the "downstairs economy" income generation scenario, and completes the transformation from the traditional "people looking for goods" to the data driven "goods looking for people" model.

At present, Xinyuan Service has obtained the qualifications of innovative small and medium-sized enterprises, national technology-based small and medium-sized enterprises, dual software certification, high-tech enterprises, etc., and has won 13 soft copyrights and 20 invention patents issued by the State Property Office. These soft and hard strengths have laid a solid foundation for its transformation of new quality productivity.

After the waves, Xinyuan service withstood the pressure and refined internal skills to accumulate strength; It can be predicted that with the clearing of risks, its development prospects on the road of marketization and independence will be clearer.