Hong Kong Stocks Listing Superimposed On Commercial Operations, Desun Services Is Heading Towards “the Ocean of Stars”

CHENGDU, China, December 31, 2021 / PRNewswire / – A December 17th, Desun Services was officially on the Hong Kong Stock market.

With rapid business growth, Desun Services “transforms” itself

The successful listing of Desun Services shows its continuous rapid growth in recent years, Desun Services’ performance has always maintained rapid growth. The prospectus shows that from 2018 to 2020 and 5 M In 2021 Desun Services had sales 63.964 million RMB, 69.116 million RMB, 127.922 million RMB and 89.159 million RMB, which corresponds to an average annual growth rate CAGR of approximately 41.4% between 2018 and 2020.

When it comes to profitability, from 2018 to 2020 and 5 M In 2021, Desun Services’ net income was 31.394 million RMB, 31.043 million RMB, 42.913 million RMB and RMB 10.003 million., which corresponds to a CAGR of around 16.9% between 2018 and 2020.

The leap in performance is due to the rapid growth of GFA under the leadership of Desun Services. From 2018 to 2020 and 5 M In 2021, the company’s managed GFA was 533.5 thousand square meters, 792 thousand square meters, 3834.6 thousand square meters and 4154.2 thousand square meters, respectively.

Among them, the non-residential GFA has seen a viral surge under the leadership of Desun Services. From 2018 to May 31, 2021, the non-residential GFA managed by the company rose from 110.8 thousand m² to 2295.7 thousand m².

With the continuous improvement of the service level of Desun Services in the non-residential area, the company has gradually expanded its scope of services to include commercial operating services.

For Desun Services, the importance of developing commercial operations services lies in the following two aspects:

On the one hand, Desun Services can promote its sales growth by exporting its collective management experience to other property developers and owners.

On the other hand, Desun Services can promote the diversification of the company’s sources of income by providing services such as market research services, tenant search and shopping street management for other developers and owners and thus the dependence of the performance on the GFA under management and strengthening the stability of performance growth.

In retrospect, Desun Services’ ability to grow its commercial operations services business is not unrelated to its accumulated rich experience in the property management services industry.

In recent years, the property management industry has launched a wave of offers. In 2020 alone, a total of 18 real estate service companies were successfully listed. Today, this nearly trillion-dollar stretch has welcomed a high quality publicly traded company – Desun Real Estate Investment Services Group Co., Ltd (Desun Services, 02270.HK). on December 17th, Desun Services was officially on the Hong Kong Stock market.

Over the past three years, Desun Services’ performance has grown rapidly with the growth in Contracted GFA. Meanwhile, the company is focusing on commercial operating services for leveraged growth.

At Desun Services, too, the advantage of leveraged growth is obvious. On the one hand, Desun Services has acquired well-founded service competencies for the real estate value chain in the entire industry as part of the coordinated development with Chengdu Desun Property Co., Ltd and its subsidiaries, joint ventures and associated companies (Desun Property Group). The company can secure relevant income by providing commercial operating services to other developers and owners across the industry chain.

On the other hand, Desun Services has relied on the strong support of Desun Property Group by taking over the development area of ​​Desun Property Group and through mergers and acquisitions (M&A) from high-quality real estate service providers and further increased the managed GFA.

In the long term, Desun Services achieves leverage growth through efforts to provide commercial operating services and the expansion of the real estate space under management, and is thus heading for the “Ocean of Stars”.

The serviceability of the entire industrial chain, the “basis” of Desun Services’ expansion

The successful expansion of Desun Services into the Commercial Operation Services area can be traced back to many years of development experience from the synergy between the company and the Desun Property Group.

Through long-term joint development with Desun Property Group, Desun Services has developed capabilities for comprehensive commercial operations services. The company is currently able to handle commercial operational services including multiple connections such as planning, tenant acquisition, operations and sales. Special:

At the commercial project planning level, Desun Services can provide services such as pre-planning, business planning and support in planning market expansion.

Desun Services’ service content for general development projects includes but is not limited to preliminary planning reports, including product positioning, planning recommendations, and financial calculations; For cultural tourism and commercial projects, the service content of Desun Services includes overall planning reports, consisting of country sorting, cultural positioning, product positioning, financial calculation, etc.

In terms of tenant procurement for commercial projects, Desun Services offers tenant procurement management services, early stage intervention and other services for its own commercial projects and commercial expansion projects. At the operational level of commercial projects, Desun Services provides various services such as operational service management and pre-intervention for its own commercial projects and expansion projects.

Finally, with regard to commercial project sales, Desun Services has sales teams with omni-channel sales capabilities that can better serve mass sales in addition to the traditional sale of used apartments.

It is worth noting that in addition to maintaining the full chain business operation service capabilities, Desun Services has also established its own unique advantages in developing business models for business models. In contrast to other commercial operators, Desun Services pays more attention to customer segmentation and precise positioning and focuses on creating scene-oriented, socialized, thematic and block-centered scenes.

For example, Desun Services’ newly started commercial projects are mainly neighborhood and regional companies less than 100,000 m² in size, of which projects between 20,000 and 50,000 m² account for 35% and which are less than 100,000 m² up to 70%.

From today’s perspective, Desun Services has identified a number of successful cases. Using the example of “Youth Trend Play Centers”, the main target customer group of the Huahuo Community (which means Flowery Times, Lively Atmosphere in Chinese) are young people of the Z generation. Judging by the product shapes, the Huahuo community is mainly in the form of a thematic block, with the block shape of large and small shops plus squares as carriers, fashion trends and niche socials as the core and basic life services as additions to create themed commercial products with market culture characteristics and a lively atmosphere.

All in all, the benefits of its rich experience in real estate services and commercial operating services will give Desun Services the confidence to continue expanding into commercial operating services.

With Endogeny and Extension Desun Services is initiating a phase of accelerated expansion

For Desun services the listing is from Hong Kong Stocks is a new start in its rapid development cycle.

With the improvement of the comprehensive range of services, the race track for Desun Services is also growing at a rapid pace. Public information shows that the Sichuan-Chongqing region, where Desun Services is rooted, is in a phase of rapid development.

Since the “13th Five-Year Plan”, the development of the Chengdu-Chongqing region has been in the fast lane. By 2019, the region’s GDP growth had reached an average annual rate of over 8%. With the publication of the “Outline for the Construction of the Chengdu-Chongqing Dual-City Economic District” (hereinafter referred to as the “Outline”) in October this year, Cheng you–Chongqing City clusters will grow and will maintain a rapid development trend in the future. According to the guidelines of the “Outline”, the Chengdu-Chongqing region is to be developed into a dual-city economic area with strong strength and distinctive characteristics by 2035, and Chongqing and Cheng you will rise to the ranks of modern international cities.

The rapid economic development has prepared a broad stage for the development of the real estate industry. In recent years, the property management services market in the Sichuan-Chongqing region has always ensured remarkable growth.

According to Frost & Sullivan’s data, the total revenue of property management service companies in the Sichuan-Chongqing area increased from 2015 to 2020 from 31.2 billion RMB to 55.1 billion RMB, with a CAGR of 12.0%. In 2025, the total revenue of property management services in the Sichuan-Chongqing area is expected to be 92.4 billion RMB, with a CAGR of 10.9% from 2020 to 2025.

Currently, the rapid development of the property management services market in the Sichuan-Chongqing region has boosted Desun Services’ performance. Looking ahead, Extensional M&A will be a key driver of the company’s performance growth.

The prospectus shows that Desun Services plans to use 60% of the funds raised for strategic investments and acquisitions to expand property management and commercial operations.

Property management service companies are currently generally affected by the decline in the sales area of ​​real estate AGs, so that their valuation level has fallen drastically compared to a high at the beginning of the year. In contrast to this year’s high number, for example, the share prices of industry leaders such as Country Garden Services and Sunac Services have fallen more than 35%. The depreciation of the entire property management services market means a golden opportunity for industrial M&A for Desun Services as well.

In fact, Desun Services also has extensive experience in M&A. In August 2020, Desun Services acquired Zhongneng Group to improve its business portfolio. In 2019, the Zhongneng Group was still at a loss, but through the integration of Desun Services, the Zhongneng Group achieved profitability in 2020 with a net profit margin increased to 11.5%.

In the long term, Desun Services will welcome a new round of rapid development as the original business continues to expand and the additional commercial operational services accelerate.

SOURCE Desun Real Estate Investment Services Group Co., Ltd.