Jinmao Services' revenue is expected to increase by 2025 without profit growth: revenue of 3.668 billion yuan, up 18.5% year-on-year, while net profit attributable to the parent decreased by 18.8%.

Why is solid cash flow in stark contrast to declining profits?

On March 23, Jinmao Services (00816.HK) released its annual performance announcement for 2025.

The data shows that Jinmao Services achieved a total revenue of 3.668 billion yuan for the year, a year-on-year increase of 18.5%, but the net profit attributable to the parent company was 310 million yuan, a year-on-year decrease of 18.8%, with gross profit only slightly increasing by 0.3% to 720 million yuan, exhibiting the typical feature of “increased revenue but decreased profit.”

Specifically, in 2025, the company’s total revenue reached 3.668 billion yuan, a year-on-year increase of 18.5%, a significant improvement compared to the 9.7% growth in 2024, primarily driven by property management services. During the period, the revenue from property management services was 2.691 billion yuan, a year-on-year increase of 23%, accounting for 73.3% of total revenue, becoming the core pillar of performance growth; the gross profit for this segment was 394 million yuan, a year-on-year increase of 22%, with a stable gross profit margin.

Non-owner value-added services and community value-added services showed weak performance, affected by the downturn in the real estate industry cycle, with revenue from non-owner value-added services such as site services, early-stage planning, and delivery consulting declining. Overall gross profit grew only 0.3% year-on-year, far below the revenue growth rate, as the comprehensive gross profit margin fell from 23.8% in 2024 to 19.6%, a decline of 4.2 percentage points.

The financial report shows that in 2025, the company’s annual profit was 321 million yuan, a year-on-year decrease of 18.6%; the net profit attributable to the parent company was 310 million yuan, a year-on-year decrease of 18.8%, with basic earnings per share at 0.34 yuan, significantly down from 0.41 yuan in 2024.

The core reasons for the profit decline stem from three aspects: first, the significant drop in the comprehensive gross profit margin, where scale growth could not cover the shrinking profitability; second, the increase in provisions for bad debts, with trade receivables impairment of 62.685 million yuan during the period, a substantial increase from 38.116 million yuan in 2024, which eroded profits; third, rising costs related to strategic investments and merger integration, with the completion of the acquisition of Jinmao Green Construction in Chongqing in 2025, leading to increased integration costs and operational investments.

Despite profitability pressures, the company’s cash flow performance remained robust. The net cash flow from operating activities was 748 million yuan, significantly up from 533 million yuan in 2024, enhancing cash collection capability; as of the end of the period, cash and cash equivalents stood at 1.629 billion yuan, a year-on-year increase of 16.4%, indicating ample short-term debt repayment funds. Asset scale steadily grew, with total assets at approximately 4.810 billion yuan and total liabilities at 3.191 billion yuan, giving an asset-liability ratio of 66.3%, slightly up from 2024.

In 2025, the company’s comprehensive gross profit margin dropped significantly by 4.2 percentage points to 19.6%. On one hand, the rigid costs of property services such as labor and materials continued to rise, and while basic property revenue grew, the pressure on the cost side was hard to pass on; on the other hand, non-owner value-added services were affected by deep adjustments in the real estate industry, with both business volume and profitability declining, leading to a significant drop in gross profit margin for this segment, dragging down overall profitability.

At the end of the period, the book net value of the company’s trade receivables was 1.438 billion yuan, a 23.4% increase from 1.165 billion yuan in 2024, with growth rates far exceeding those of revenue and profit, mainly due to extended collection periods for third-party projects and tight funding in the upstream and downstream of the real estate sector. During the period, the provision for bad debts was 129 million yuan, a substantial increase from 66.09 million yuan in 2024, with impairment losses directly eroding profits.

As of the end of 2025, Jinmao Services managed an area of approximately 105.7 million square meters, a 4.8% increase from the end of 2024, covering 636 projects across 66 cities in 25 provincial-level administrative regions, including 430 residential communities and 206 non-residential properties.