Wen/Leju Finance Fan Huiru

With the halo of the first state-owned property enterprise listed in Hong Kong shares in Jiangsu Province, Suxin's services can hardly attract the attention of the capital market.

At a time when the M&A of property enterprises is generally cold, Suxin Services has a strong sense of adding fuel against the trend. After taking the two brother companies into account last year, Suxin Services once again made a major acquisition.

On April 29, Suxin Service announced that it planned to acquire a commercial land located in Suzhou High tech Zone for the development of office buildings through public bidding.

It seems no surprise that the property enterprises, which have always been characterized by light asset operation, have gained weight after the news of acquisition of related parties' heavy assets has been reported frequently on the road of bailing out real estate in recent two years.

However, the end of Suxin's service is the only one in the near future. "With the continuous expansion of business and the increase of the number of employees, the company's existing office space is not enough to meet its development needs." Suxin Services revealed its intention to buy land.

According to the announcement, the land is located in the north of Shishan Road and the west of the planned land in Shishan Business Innovation Zone, High tech Zone, Suzhou, with a site area of 6124.1 square meters. The land is designated for commercial use, with a transfer period of 40 years and a total plot ratio of 1.4 to 1.8.

The initial bid price of this land is 49.57 million yuan. Based on the highest floor area ratio of 1.8, the initial floor price is about 4497 yuan/square meter. Coincidentally, the existing office of Suxin Services is also located on Shishan Road. According to the industrial and commercial information, its registered address is Suzhou High tech Plaza.

It was learned from Leju Finance's Property K Line that the current price of Suzhou High tech Plaza is about 20000/m2. With reference to this price, the land targeted by Suxin Service will have a lot of premium space after completion. However, in addition to various construction costs in the later stage, the capital required is far more than the initial auction price of 49.57 million yuan.

For listed property enterprises, the source of funds is unavoidable. "Part of it is allocated by the net amount of income, and part of it is allocated by the internal resources of the Group." Suxin Services has clearly made plans.

However, before using the money, Suxin Service needs to complete the change of the purpose of the raised funds. The announcement disclosed that Suxin Services redistributed the net amount of HK $52.9 million originally used for "acquisition of Hong Kong office buildings for self use and lease" to "acquisition and construction of Chinese land".

In fact, this is not the first time that Suxin Service has changed the use of raised funds. On April 27 last year, Suxin Service released an announcement on the first change in the use of raised funds. 38.8 million of the 52.9 million Hong Kong dollars originally used for strategic investment was appropriated to the new project "Hong Kong office buildings for self use and leasing"; The 14.1 million yuan invested in pension, nursing and medical companies will be allocated to the "acquisition of Hong Kong office buildings for self use and lease", and the total plan is to allocate 52.9 million Hong Kong dollars.

Today, the money used to "purchase Hong Kong office buildings" has not been hot for a year, and it has been used for other purposes. In the announcement, Suxin Service was full of praise for the land to be purchased, "the golden area, adjacent to Suzhou Metro Line 3, has convenient transportation, mature surrounding commercial supporting facilities, and rich leisure resources, which is the only auction land on Shishan Road at present."

There is nothing wrong with improving the office hardware conditions, but we also need to improve our strength to match them. 2023 is the second year of the listing of Suxin Services, and also a year of complete experience in the capital market.

According to the annual report data, Suxin Services will achieve a total revenue of about 725 million yuan in 2023, up 35.7% year on year; Gross profit was about 147 million yuan, up 18.9% year on year; The annual profit was about 80.1 million yuan, up 23.1% year on year; The profit attributable to the owner of the parent company was 74 million yuan, up 16% year on year.

Among the 57 listed property enterprises that published annual reports according to the Property K Line of Leju Finance, the revenue and net profit of Suxin Service ranked 48th and 32nd respectively.

The gross profit rate and net profit rate of Suxin services, which are catching up with Suxin services, have both declined, and the gross profit rate has hit a new low in recent five years. In 2023, the gross profit rate will be 20.3%, 2.8 percentage points lower than the same period last year; The net interest rate was 11%, 1.2 percentage points lower than the same period last year.

In terms of scale, in 2023, the total contracted construction area of Suxin service will be about 16.7 million square meters, with a year-on-year growth of 83.5%. In the same period, the pipeline area was 15.16 million square meters, up 116.63% year on year.

After getting rid of the last place in scale, Suxin Service still failed to escape from the bottom. In 2023, Suxin Service ranked 45th among the 52 listed property enterprises listed in Leju Finance and Economics statistics.

In terms of cash, by the end of 2023, the cash and cash equivalents in Suxin's service account were about 397 million yuan, including about 119 million interest bearing loans and about 126 million yuan of net raised funds. Compared with 57 listed property enterprises that have released relevant data, Suxin Service is not rich, ranking 42 among 57 listed property enterprises.