Insight into SINO-OCEAN SERV's semi-annual report: Aligning with new industry trends, strategic combinations assist in value reconstruction

Since the real estate industry entered a deep adjustment period, the property management industry has undoubtedly been undergoing profound changes—shifting from the past "scale expansion" model reliant on real estate growth to a new stage that emphasizes quality and efficiency through "value reconstruction." How to transition from scale growth to value growth has become a common topic for all property companies to explore.

On August 27, SINO-OCEAN SERV (06677) officially released its mid-year report for 2025. By focusing on enhancing market expansion capabilities and diversified service capabilities, it delivered a "report card" showcasing resilient growth.

In the first half of the year, SINO-OCEAN SERV maintained a high-quality management scale, with a contracted area of 122 million square meters during the period. As the third-party expansion capabilities continue to strengthen, the proportion of revenue from third parties accounted for 93.4%, significantly enhancing the company's business independence. Meanwhile, due to a continued focus on high-tier cities, the managed area in first and second-tier cities also maintained a high-quality level, with the proportion of managed area in these cities accounting for 82.6%, and the average property fee being 3.2 yuan/sqm/month, which is at a mid-to-high level in the industry, further enhancing its risk resistance capability.

With a significant enhancement in market expansion capabilities and the ability to withstand cyclical fluctuations in the industry, SINO-OCEAN SERV's performance in the first half of the year strongly highlighted its resilient characteristics: achieving revenue of 1.39 billion yuan, with an adjusted core net profit margin of 8.3%.

Of course, SINO-OCEAN SERV's ability to maintain resilient growth during the industry's adjustment period is not coincidental, but rather the result of a series of strategic adjustments and precise execution it has actively undertaken in recent years.

Anchoring the "Weak Cycle" Track, Significantly Enhancing Expansion Capabilities

According to Zhitong Finance, as the current round of significant adjustments in the real estate industry has not yet ended, SINO-OCEAN SERV has not blindly expanded but has keenly directed resources towards stable demand areas with strong payment capabilities, such as government office buildings, public institutions, municipal sanitation, and scenic area management. This move not only solidified the company's fundamental base but also significantly enhanced SINO-OCEAN SERV's expansion capabilities, driving more stable growth for the company.

Specifically, the company has strengthened its efforts in targeting high-quality assets such as national central enterprises, government office buildings, and public institutions (such as hospitals and schools) that have stable budgets, strong payment capabilities, and low bad debt risks; on the other hand, it has continuously explored new blue oceans in "urban services," such as municipal sanitation, scenic area management, and public facility maintenance, which are large market spaces with sustained growth potential. In addition, SINO-OCEAN continues to deepen its focus on "high-end commercial and office" and industrial park projects, which have strong payment willingness and high project value, effectively enhancing the overall property management fee average.

As the saying goes, "data is the best touchstone." Reflected in the financial report data, SINO-OCEAN SERV's enhanced expansion capabilities in the first half of the year and the significant increase in the proportion of non-cyclical businesses serve as good evidence.

In the first half of the year, the company continued to promote market-oriented expansion, increasing efforts in non-residential business expansion based on residential and commercial office as core business types. The newly added contracted building area during this period was 3.9 million square meters, with the proportion of newly added contracted building area from third parties rising from 64% in the same period last year to 96%, including various business types such as commercial, office buildings, industrial parks, public buildings, and scenic areas, indicating that SINO-OCEAN's progress in expanding non-cyclical businesses is smooth and its expansion capabilities are enhanced As of July 2025, SINO-OCEAN SERV has won 31 projects with a contract amount of 260 million yuan. The company has made breakthroughs in projects worth tens of millions, highlighting its competitive ability in high-quality projects, with the contract amounts of 9 awarded projects exceeding ten million. Deepening relationships with major clients has also yielded results; in July, a nationwide cooperation was established with BYD, covering 4S stores in 12 provinces and 42 cities, expanding from single project cooperation to nationwide promotion.

With the enhancement of SINO-OCEAN SERV's external expansion capabilities, the layout of non-cyclical business has progressed smoothly. In the first half of the year, the company's basic property management revenue performed steadily, achieving an income of 1.053 billion yuan, accounting for 74.4% of total revenue.

In addition, by extending service management experience to non-residential formats, the company has built multi-format professional service capabilities and opened up growth space in non-residential formats through benchmark cases with major clients. In the first half of the year, SINO-OCEAN SERV's diversified layout also generated a certain positive feedback effect. During the reporting period, the contract area for government, schools, and hospitals accounted for 19%. Meanwhile, the revenue contribution from the commercial office sector reached 16%, with all four managed office buildings in Beijing achieving 100% green electricity and providing cross-format energy management solutions, significantly extending service boundaries.

From the above, it can be seen that as the property management industry experiences a slowdown in growth due to the real estate sales market, SINO-OCEAN SERV has firmly stepped out of its "comfort zone," anchoring itself in the "weak cycle" track while focusing more on its main business and diversified business expansion. From a growth perspective, this strategic adjustment undoubtedly brings strong positive effects to SINO-OCEAN SERV, not only enhancing its "self-sustaining" capabilities but also helping the company build a development moat for steady progress.

Multi-dimensional Enhancement of Service Capabilities, Entering the Path of High-Quality Development

Of course, in addition to enhancing the company's "independent self-sustaining" capabilities, aligning with new industry trends to improve quality service is also key to SINO-OCEAN SERV's long-term competitive advantage.

In 2024, Ni Hong, the Minister of Housing and Urban-Rural Development, first mentioned "good houses, good services" at the press conference on people's livelihood during the Two Sessions, and in March 2025, income was included in the government work report. Under the guidance of central policies, the market share of companies with higher service quality may further increase. In short, driven by the concept of good houses and good services, quality service will become a core competitive factor for property management companies.

Based on this new industry trend, in the first half of the year, SINO-OCEAN SERV continuously focused on service quality and value-added services, creating value through quality service and driving the company to achieve "quality growth."

On one hand, SINO-OCEAN SERV has improved service quality around customer perception. In the first half of 2025, SINO-OCEAN focused on the essence of livelihood services, paying close attention to owner needs, enhancing service quality from the details, ensuring that property service satisfaction remains at an excellent level, and receiving multiple authoritative industry awards, including 12th place among the top 100 property brands in China in 2025, leading enterprise in property service quality in 2025, and leading enterprise in low-carbon operation in property management in 2025.

Thanks to this, in the first half of the year, SINO-OCEAN SERV's customer satisfaction remained at 87 points, which is above average in the industry. For property companies, customer satisfaction is a significant factor in the company's brand moat, so SINO-OCEAN SERV has solidified its brand barrier by improving customer satisfaction, which evidently has a positive impact on the company's performance growth On the other hand, SINO-OCEAN SERV has also reshaped the development path of community value-added services. During the reporting period, the company entered community consumption with high-demand, high-frequency products, gaining insights into owner needs, and linking owners through community operations, thereby solidifying the development foundation of community value-added businesses. Specifically, the company is user-demand oriented, increasing customer stickiness through business innovation, resource integration, and digital operations to achieve revenue contribution.

Through the reshaping of the community value-added service development path, in the first half of the year, SINO-OCEAN SERV's community value-added service revenue reached 249 million yuan, accounting for 18% of total revenue, with a year-on-year growth of 2%, achieving positive growth.

In the property management industry, a good reputation and owner trust are the foundation of all value-added businesses. Therefore, during the reporting period, SINO-OCEAN SERV aligned with new industry trends and multidimensionally enhanced the quality of its services, which is clearly a significant forward-looking move. It not only serves as an important support for the company to cope with industry downturns but also helps the company consolidate its brand moat and add value.

Summary

The resilience of SINO-OCEAN SERV's growth in the first half of the year lies in the company's reduction of non-owner value-added services, successfully lowering its dependence on cyclical businesses strongly related to real estate development, while precisely focusing on core businesses and building a diversified revenue structure based on market competition capabilities.

In the "post-real estate" era, this strategic adjustment by SINO-OCEAN SERV is significant not only for bravely crossing the industry's low point but also represents a profound self-revolution. Its value lies in constructing independent market capabilities and a healthy financial model, enabling the company to develop more healthily and steadily, continue to release growth momentum in the next report, and anticipate long-term value