Facing declining collection rates and profit downturns, Yuexiu Services: Actively practicing "addition and subtraction"

Ask AI · How can Yuexiu Property Services leverage technology to cope with profit pressure?

“By 2025, the property management industry has entered a new development stage characterized by competition over existing stock, quality first, and lean operations.” On March 26, Jiang Guoxiong, a non-executive director and chairman of the board of Yuexiu Property Services, said this at a performance briefing.

Looking back at 2025, financial data show that Yuexiu Property Services’ total revenue was approximately RMB 3.901 billion, up 0.9% year over year; profit attributable to owners of the company was RMB 273 million, down 22.5% year over year, showing the feature of “increasing revenue but not increasing profits.”

Although profits are under pressure, Yuexiu Property Services still remains financially sound. By the end of 2025, Yuexiu Property Services had cash and time deposits of RMB 4.906 billion, and operating cash flow stayed positive at RMB 509 million; at the same time, its overall collection rate of property fees for properties under management in 2025 was 91.8%, which is at a relatively high level in the industry.

On March 26, Yuexiu Property Services held its 2025 performance briefing. Corporate photo provided by the company

Property management firms’ profitability is getting harder

Financial data show that in 2025, Yuexiu Property Services’ gross margin was 14.8%, down 8.5 percentage points year over year.

Yuexiu Property Services’ performance figures also reflect that, under overall pressure in the real estate industry, property management firms are also going through a period of pain characterized by “increasing revenue but not increasing profits.”

Li Huiting, CFO of Yuexiu Property Services, said that the decline in gross margin is mainly due to industry impacts, especially because the upstream real estate industry is still in a deep adjustment period; in addition, the completion of revenue recognition for the phased handover of hard interior decoration business will lead to structural changes in the overall setup, which is also a reason for the decline in gross margin.

When asked how to improve gross margin, Li Huiting responded: “In 2026, the company will pursue cost reduction and efficiency gains from three aspects. First, it will actively expand business in non-residential segments, because the payment counterparties for non-residential projects have stronger credit, and the overall collection rate is relatively stable. By expanding non-residential projects, the company can optimize its business structure. Second, for value-added services, the company will advance a transformation in its operating direction, especially in smart home and energy management. For these new businesses with high barriers, the company will actively incubate and expand them. Third, by enabling technology to improve human efficiency, we will implement more refined cost controls to offset the pressure of rigid upward labor costs caused each year by adjustments to basic wages and social security provident fund contributions.”

By the end of 2025, Yuexiu Property Services’ total area under management was 73.5 million square meters, up 6% year over year; the Group’s contracted area was 90 million square meters, up 1.4% year over year, with 521 contracted projects.

When facing profit pressure, last year Yuexiu Property Services also actively did “cutbacks”: it proactively withdrew from low-profit projects and low-efficiency projects with payment collection not meeting targets, with a cumulative withdrawal area of about 6.55 million square meters.

Screenshot of Yuexiu Property Services’ annual report

This year will focus on non-residential formats

Facing the transition of the real estate industry and the decline in profit space, Yuexiu Property Services’ answer is to actively do “additions”—expanding non-residential formats and strongly laying out value-added services.

Jiang Guoxiong revealed that the company’s strategy this year is “focus.” First, focus on deeply cultivating strategic cities to do it thoroughly and consolidate the groundwork. Currently, the company’s management has set 12 core cities, including the Greater Bay Area and the Yangtze River Delta, as well as high-tier cities such as Beijing and Tianjin, so as to strengthen and solidify its core business through deep cultivation. Second, focus on non-residential formats, and around three major strategic tracks—business schools, large-scale public buildings, and large transportation—it will strengthen expansion in subdivided segments. Third, adjust the structure of value-added services, develop toward people-livelihood-oriented and operations-oriented businesses, stay close to owners’ needs, and form business synergies.

In practice, in 2025, Yuexiu Property Services had already tilted new expansion projects toward non-residential businesses. During the reporting period, non-residential business accounted for 87% of the contract value for market expansion for that year; segments such as banks, universities, TOD, and public buildings became key targets for expansion.

While actively expanding new projects, Yuexiu Property Services directly faces the industry-wide shared challenge of “continued decline in the collection rate.”

Jiang Guoxiong disclosed that Yuexiu Property Services will address the decline in property fee collection rates from three aspects. First, by maintaining service quality and leveraging digital enablement, it will improve customer satisfaction and increase customers’ willingness to pay. Second, it will promote more convenient payment channels and promote activities such as advance deposits and using points to offset property fees. Third, it will strengthen the account/credit period management for projects expanded externally; projects with overdue payments beyond two contract periods will be subject to a withdrawal review.

When discussing acquisitions, the management of Yuexiu Property Services said that, currently, the company has about RMB 4 billion in cash and fixed deposits on hand, with sufficient funds. Among the funds raised through the listing, RMB 500 million can be used for mergers and acquisitions. In the past, the overall usage ratio was relatively low, mainly because the company is relatively prudent when it comes to mergers and acquisitions, hoping to ensure mergers and acquisitions are conducted with quality and responsibility. Since 2025, the company has been actively paying attention to and following up on market opportunities, hoping to expand the company’s scale and improve its efficiency through mergers and acquisitions. The company will focus on targets that have synergy with the company, relatively higher benefits, high operating quality, high sustainability, and financial compliance, and whose valuations are relatively reasonable.

Xin Jing Bao Shell Finance reporter Xu Qian

Editor Yang Juanjuan

Proofreader Zhao Lin