Country Garden Services expects continuous revenue growth by 2025, with cash on hand not less than 17.7 billion yuan.

News Report (Reporter Chen Xiao): On February 27, Country Garden Services Holdings Limited (hereinafter referred to as “Country Garden Services”) released its 2025 earnings forecast, showing that although net profit faced short-term pressure due to proactive strategic adjustments, the core business fundamentals remained stable, cash flow stayed healthy, and increased shareholder returns attracted investors, demonstrating the effectiveness of its “proactive shift” strategy.

Steady Revenue Growth

In 2025, Country Garden Services proactively adjusted some business strategies, but its core operations remained resilient. The company expects to report unaudited consolidated revenue of approximately RMB 48.2 billion to RMB 48.5 billion, a year-over-year increase of 9.6% to 10.2%. This growth was mainly driven by steady increases in property management services, community value-added services, and the “Three Supplies and One Industry” business. This upward trend strongly confirms the company’s market competitiveness.

The announcement states that the company focuses on improving customer satisfaction, enhances detailed project management and investment, and digitizes operations to reduce costs and increase efficiency, keeping core business fundamentals stable. In 2025, the company’s unaudited gross profit is expected to be about RMB 8.2 billion to RMB 8.7 billion, roughly flat year-over-year.

Looking at recent financial reports, the proportion of related-party revenue has continued to decline, remaining at 1.1% in the first half of 2025 compared to 2024. CICC International Research believes that the company’s third-party revenue share leads the industry, with diversified business income and less reliance on related parties, which helps mitigate declining gross profit margins.

Strategic “Proactive Shift”

According to the announcement, due to the prolonged receivables collection cycle from some clients of its non-wholly owned subsidiary, Country Garden ManGuo Environmental Technology Group Co., Ltd. (hereinafter “ManGuo Environment”), and the lack of significant improvement in operating cash flow, the group proactively adjusted its operations, strategically downsizing related businesses, and fully impaired the remaining goodwill of ManGuo Environment, with an impairment amount of about RMB 968.9 million.

Affected by the goodwill impairment of ManGuo Environment and the company’s proactive cleanup of long-aged trade receivables, Country Garden Services expects its unaudited net profit for 2025 to be approximately RMB 450 million to RMB 650 million; net profit attributable to the parent company is estimated to be RMB 500 million to RMB 700 million.

However, the announcement also notes that the goodwill impairment of ManGuo Environment will not be included in the core net profit attributable to the parent company of Country Garden Services, and goodwill impairment is a non-cash item, which does not directly impact the company’s cash flow or operations. The company’s unaudited core net profit attributable to the parent remains around RMB 2.4 billion to RMB 2.7 billion.

Market analysts believe that the short-term pressure on net profit is part of a strategic “proactive shift.” The company is currently in an “active optimization period,” with short-term profit pressure but significantly enhanced long-term competitiveness. Revenue and cash flow indicators show business resilience, and high dividend payout and buyback strategies help strengthen shareholder confidence. If the strategy is executed smoothly, net profit growth is expected to turn positive again.

Healthy and Ample Cash Flow

Cash flow is the “lifeline” of the property management industry. In recent years, property companies have faced cash flow pressures due to extended receivables cycles from related-party projects and difficulties in collecting property fees. Against this backdrop, Country Garden Services has maintained healthy and sufficient cash flow.

The company preliminarily estimates that its unaudited net cash from operating activities in 2025 will not be less than RMB 2.4 billion; by December 31, 2025, its unaudited bank deposits (including cash and cash equivalents, fixed deposits, restricted bank deposits) and structured deposits will total no less than RMB 17.7 billion. Steady net operating cash flow and ample cash reserves enhance risk resistance, providing a solid foundation for navigating cycles, and underpin share buybacks and high dividends.

The board of directors expects that, in line with the group’s dividend policy, the 2025 dividend payout will be based on 60% of its core net profit attributable to the parent. To further protect shareholder interests and demonstrate the company’s long-term investment value, the board proposes a dividend payout target of no less than RMB 1.5 billion for 2026. Additionally, between March 28, 2025, and the announcement date, Country Garden Services has repurchased no less than RMB 500 million worth of its shares on the open market, totaling 87.996 million shares. The combination of high dividends and share repurchases not only directly enhances shareholder returns but also reflects management’s confidence in the company’s intrinsic value and future prospects, receiving positive investor response.

Morgan Stanley Securities issued a research report in January stating that Country Garden Services has tactical upside potential, with advantages such as strong cash flow, increased shareholder returns, and approximately 8% yield. Institutions like CICC also believe that the company’s shareholder returns are attractive.

(Edited by Zhang Wei)