The property management market is increasingly consolidating around leading enterprises, with capable firms demonstrating clear development strategies poised for superior growth. On March 26, YUEXIU SERVICES (06626.HK) released its 2025 annual results, reporting total revenue of approximately RMB 3.902 billion, a slight increase of 0.9% year-on-year. The company recorded a gross profit of about RMB 577 million, with a gross profit margin of approximately 14.8%, and a net profit attributable to owners of approximately RMB 274 million.
The past year has seen the property management industry navigate a challenging transformation. Persistent consolidation in the upstream real estate sector, rigid cost increases, a wave of project withdrawals, and declining collection rates have left many companies struggling with profit growth lagging behind revenue increases, or even facing declines in both. Against this backdrop, YUEXIU SERVICES also experienced a contraction in profits. However, looking beyond the surface-level profit fluctuations reveals strategic enhancements: an "addition" in fundamental service quality, a "gear shift" in the structure of value-added services, a "leap" in the quality of non-residential segments, and the "fortification" of digital capabilities.
Management stated during the earnings presentation that despite short-term volatility in last year's performance, the company's operational foundation and financial fundamentals remain robust. They emphasized that the industry's transformation period presents both opportunities and challenges, and YUEXIU SERVICES is committed to a path of sustainable, high-quality growth driven by internal strengths.
**Bolstering the Foundation** In 2025, YUEXIU SERVICES achieved a residential customer satisfaction score of 85.6%, an improvement year-on-year, with a collection rate reaching 91%. As of December 31, 2025, the company's managed area was approximately 73.468 million square meters, up 6.0% year-on-year, while the contracted area was approximately 90.005 million square meters, a increase of 1.4%.
The industry has moved past the era of extensive, land-grabbing expansion into a new phase characterized by competition for existing assets and a focus on quality. Here, quality and structure matter more than sheer scale growth. Last year, YUEXIU SERVICES proactively exited 6.55 million square meters of low-quality, inefficient projects, strengthening its foundation through portfolio optimization. Furthermore, 92% of its managed projects are located in first- and second-tier cities, with property management fees generally at medium-to-high industry levels, providing solid geographical support for its "premium quality, premium price" strategy.
Alongside portfolio optimization, the company has invested significantly in quality upgrades. During the reporting period, in collaboration with Yuexiu Property, it launched the "Yue Refreshing" initiative across 83 communities nationwide. With a cumulative investment of tens of millions of RMB, the company completed 228 quality upgrades covering high-frequency resident touchpoints like community entrances, landscaping, children's playgrounds, and elevator cabins.
Service quality ultimately translates into cash flow. In 2025, the current collection rate from individual homeowners reached 91%, while the rate for externally secured projects was as high as 94%, both significantly exceeding industry averages. Consequently, net operating cash flow for the period was RMB 509 million. By reinforcing its core business during an industry downturn, YUEXIU SERVICES saw revenue from basic property management services grow 21.3% year-on-year to RMB 1.499 billion in 2025. This segment now contributes 38% of total revenue, up 6 percentage points, solidifying its role as the company's most stable growth engine.
Conversely, the value-added services segment underwent significant structural adjustments in 2025. As high-margin, phased hard decoration services were progressively completed and non-property-owner value-added services linked to associated real estate businesses continued to shrink, YUEXIU SERVICES proactively initiated a strategic "gear shift." The company established a dedicated Value-Added Business Division in 2025, aiming to integrate resources and innovate business models. This shift moves value-added services away from a "transactional" model reliant on strong real estate ties towards an "operational" model focused on deeply serving the existing needs within communities.
Specifically, in lifestyle services, the strategy involves a "hit product matrix + channel deepening" approach, concentrating on high-frequency, essential scenarios like customized water, grains and oils, air conditioning cleaning, and Mid-Autumn Festival mooncakes, while increasing the coverage of community front warehouses. In supporting commercial services, the integrated "Yue+LIFE" format stores commenced operations, creating one-stop lifestyle service scenarios combining property leasing/sales, coffee, and home furnishings. The first externally secured cultural-commercial-tourism project, Wuxi Longtingli, achieved an 82% merchant occupancy rate. For property asset management, the focus is on cultivating a long-tail value-added ecosystem around high-frequency community needs such as vehicles, elderly care, children, and pets.
Management commented that significant potential for value addition remains within the existing portfolio. The company will delve deeper into homeowner needs to drive the transition of value-added services from transactional to operational.
**Forging New Pathways** If bolstering basic services and restructuring value-added services represent the "optimization of existing assets" for YUEXIU SERVICES, then the breakthrough in externally secured non-residential projects and the self-developed digital intelligence capabilities signify its "strategic布局 for future growth."
In 2025, YUEXIU SERVICES established a Non-Residential Business Division, focusing on three key segments: commercial offices & parks, major public facilities, and large transportation hubs. During the reporting period, it added 9.8 million square meters in new contracted area through 69 newly signed projects. The annual contract value from new external market expansions was approximately RMB 300 million, with non-residential business contributing a substantial 87%.
Several high-value benchmark projects were secured, including the Port & Shipping Building, Nanjing Crossing-the-Yangtze-River Victory Memorial Hall, Jingyang Lake Science & Innovation Park, and Tianjin West Railway Station. Particularly noteworthy is the Jingyang Lake Science & Innovation Park, which is YUEXIU SERVICES's first comprehensive "industry + commerce + property" operation and management project, with a contract value close to RMB 100 million. This marks a substantive step in its evolution from a single-service property manager to a comprehensive urban operator.
As of December 31, 2025, non-residential properties already accounted for 37% of YUEXIU SERVICES's total managed area. Management clearly stated during the earnings call that non-residential segments are positioned as the core development focus for the "15th Five-Year Plan" period (2026-2030). They emphasized a selective approach targeting sectors with "strong creditworthiness, high payment capability, and strong strategic alignment," coupled with a strict project exit mechanism to ensure all entered projects are profitable with high collection rates.
This "selective" external expansion strategy reflects an elevation in the qualitative standards for market expansion. Management indicated that over the next three years, YUEXIU SERVICES will deepen its presence in 12 core cities across the Greater Bay Area, Yangtze River Delta, mid-western key cities, and the Beijing-Tianjin region, aiming to build a moat for its non-residential business through regional focus and comprehensive capabilities.
In the realm of digital intelligence, YUEXIU SERVICES has chosen a more challenging but potentially more defensible path: in-house research and development. In 2025, the company advanced its digital transformation with an integrated "software-hardware-service" approach, with core achievements concentrated in three areas: the Integrated Command Center, the AI Quality Control System, and EBA Smart Facility Management.
Specifically, the Integrated Command Center established an efficient "platform + terminal" operational system. The management cockpit enables visual data penetration across group, regional, and project levels, with 80% of metrics generated automatically by the system, significantly reducing supervision costs. The AI Quality Control System is entirely self-developed, from management software and data collection hardware to algorithm models, saving approximately RMB 3 million in development costs compared to external procurement. It currently covers 209 projects, applied across 8 major scenarios including staff attendance/absence and illegal electric bike parking, with AI intelligent monitoring exceeding 84.14 million instances and generating over 370,000 alerts. The EBA-FM system, based on AIoT, manages all facility equipment, achieving a closed-loop process for automatic core data collection, real-time monitoring, second-level alerts, and automatic work order dispatch, leading to a substantial reduction in manual inspections.
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