Insight Spotlight | Country Garden Services' Profit Defense Battle

Guandian.cn stands at the top of the industry pyramid; Country Garden Services can reach out and secure the best resources, and it also needs to directly face the most turbulent seas.

For Country Garden Services, 2025 may be a year of special significance. The revenue target set at the beginning of the year was not missed; during the year, the restructuring of related-party company debts went smoothly; its own fundamentals remained stable; and it also launched a major adjustment it had been planning for a long time. At year-end, it still delivered a qualified answer.

In mid-year, Country Garden Services’ expectations for itself were “calm waters run deep.” By year-end, its overall posture became even more positive, with hopes to “win in the present and win in the future.”

On March 27, Country Garden Services released its 2025 annual performance report and held a results briefing. The meeting was attended by Xu Binghuai, Executive Director and President of the Group; Tian Tian, Chief Financial Officer; Li Disheng, Vice President and Co-General Manager of the Life Services Development Center; Zhao Jiajie, General Manager of the Operations Management Center; and Lin Wentao, General Manager of Investor Relations.

Compress the spring to the lowest point and then let it go—only then can you achieve a higher record. Industry challenges continue to deepen, but challenges and opportunities coexist and grow together. Country Garden Services has already passed through two years of a foundation-laying period, and it also expects all efforts to yield even richer returns at a time when the industry is improving.

“Win in the present: we focus on the next three years, keeping the company’s operating fundamentals stable and delivering steady growth. Win in the future: we will continuously build and form competitive barriers, with the core focus on the core competitiveness of the enterprise’s truly sustainable development and transformation and upgrading.”

Profit Defense Battle

Worth noting is that after Country Garden released its performance report, the stock price surged straight up. As of the close, it was HK$5.92 per share, up 3.32%, with a trading value of HK$121 million.

At the 2024 annual performance meeting, Country Garden Services set the “most bottom-line target” for 2025: the revenue scale of core businesses should achieve growth in the high single digits.

At that time, Country Garden Services said it had confidence that the company’s operating situation would turn from bad to good. Looking at the year-end milestone, Country Garden Services’ business in 2025 indeed captured an improving trend, and the annual target was basically completed.

As of December 31, 2025, Country Garden Services achieved total revenue of RMB 48.354 billion, up 9.9% year over year, with the growth rate returning to the upper tier level in the industry.

From a business perspective, the large property segment generated revenue of RMB 33.11 billion, continuing to contribute about 70% of revenue. As the most stable “anchor stone,” property management services remain the largest performance support for Country Garden Services.

During the reporting period, property management services recorded revenue of RMB 27.929 billion, up about 7.3% year over year, accounting for 57.8% of total revenue. Basic property management income is directly linked to the scale under management, allowing for growth in the high single digits. This benefited from the management scale expansion driven by Country Garden Services’ active external expansion during the year.

By the end of 2025, Country Garden Services managed 8,268 projects, with a total contracted fee-managed gross floor area of approximately 107 million square meters, up 33.5 million square meters year over year.

Country Garden Services was among the earliest property companies to de-real-estate (de-property) its focus. Back when it listed in 2018, revenue from related parties was only around 20%. Today, Country Garden Services has further reduced its reliance on a single related party. Over the past two years, this proportion has remained stable at a low level of 1.1%, and most growth in managed area has come from highly market-oriented operations.

Management disclosed that in 2025, Country Garden Services’ market expansion added annualized revenue of RMB 2.03 billion from new project entries; nearly 60% of projects are distributed in key cities. In addition, the company’s retention rate for managed residential projects is 99%.

It is also worth noting that beyond property management services, the “three supplies and one support” (San Gong Yi Ye) business is growing rapidly. Although it accounts for one-tenth of the total contracted fee-managed gross floor area, in 2025 it contributed nearly 20% of revenue.

As of December 31, 2025, within the “three supplies and one support” business, property management service revenue was RMB 9.578 billion, up 46.5%; district heating business revenue was approximately RMB 1.687 billion, up 4.4% year over year. By year-end, the contracted fee-managed gross floor area for this business was 88.80 million square meters, roughly flat year over year.

Meanwhile, as the management scale expands steadily, it is also opening up richer scenarios and more potential growth room for community value-added services.

During the year, Country Garden Services’ revenue from community value-added services was approximately RMB 4.417 billion, up about 5%, accounting for about 9.1% of total revenue. It is understood that within local lifestyle services, the retail, liquor, and new energy businesses have already formed a market-oriented layout and scale revenue.

Management said the company will, in community value-added services, build core business capabilities, strengthen team building, drive business structure transformation from a resource-based model to a market-oriented one, and thereby enable growth in the scale and improvement in the quality of community value-added services.

In addition, Country Garden Services’ non-owner value-added services, environmental business, and commercial operation services recorded revenue of RMB 0.63 billion, RMB 3.555 billion, and RMB 0.62 billion, respectively.

On the revenue side, it has strong resilience; on the profit side, it faces greater pressure, mainly because Country Garden Services carried out active debt/asset “clearing” (active deleveraging and disposal).

During the reporting period, the company’s attributable net profit was pulled back by non-operating factors. This was mainly due to intangible asset amortization costs arising from acquisitions and mergers, impairment of goodwill and other intangible assets, and the like. In fact, after this impairment charge of goodwill and other intangible assets related to Man Guo Environment was recognized in full once and for all, the carrying value of this project had already become zero.

Profit facing period-by-period pressure is more due to the company’s proactive financial clearing actions. After excluding non-recurring gains and losses, Country Garden Services’ attributable core net profit still reached RMB 2.52 billion. Unaudited gross profit was RMB 8.456 billion, basically flat year over year.

Management said the company’s current revenue and cash flow remain healthy, providing solid support for strategic adjustments. After the proactive optimization period passes, the growth rate of net profit is expected to return to positive territory, and development momentum will further strengthen. From 2026 to 2028, with improved operational efficiency, the life services business gradually maturing, and ongoing optimization of management costs, the company is confident it can achieve sustainable and stable growth in both revenue and profit.

Still in the Transformation Period

“2025, for Country Garden Services, is a year of strengthening the foundation and fulfilling commitments.”

“Steady with improvement” is management’s summary of the company’s 2025 financial performance. “During the year, we proactively reduced risks, cleaned up historical receivables, and cleared goodwill. Overall, our financial performance shows steady revenue growth; profits saw some period-by-period adjustments; cash inflows were solid; and shareholder returns are clear.”

Country Garden Services remains confident about its upcoming operations. After all, when the industry is widely stuck in a “cash flow shortfall” dilemma—such as the extension of related-party repayment cycles and difficulties in collecting property fees—our company still maintains abundant and steady cash flow, becoming one of the few “top students” in the industry.

In 2025, Country Garden Services’ net cash generated from operating activities was approximately RMB 2.51 billion. By the end of the period, bank deposits and structured deposits totaled as much as RMB 17.93 billion, including fixed deposits of about RMB 3.979 billion, structured deposits of RMB 1.052 billion, and net current assets of RMB 12.971 billion.

Management said cash flow is the lifeblood of a company. High-quality net operating cash flow means the core business can continue to “generate blood” in a steady and sustainable way. After covering rigid expenditures such as operation and R&D investment, there is still room to conduct share buybacks and pay dividends.

According to the financial report, the board of directors recommended paying a final dividend of RMB 0.0462 per share and a special dividend of RMB 0.4180 per share, totaling about RMB 1.511 billion. The board also expects the total dividends for 2026 to be no less than RMB 1.5 billion.

With ample funding support, Country Garden Services has shifted part of its focus to the development of community value-added services. As management disclosed in the results briefing, 2025 is a key year for the Group’s community value-added services to transform from a resource-based model to a market-oriented one.

After going through an initial period of extensive growth, most property companies’ community value-added services segment has gradually entered a 2.0 stage. Revenue fluctuates unpredictably, but Country Garden Services is clearly in a relatively leading position.

During the period, within community value-added services, local lifestyle services revenue was RMB 2.191 billion, up 19% year over year; real estate agency services revenue was RMB 0.347 billion, up about 6.3%; community media services revenue was RMB 0.643 billion; on-demand at-home services revenue was RMB 0.576 billion; and park area space revenue was RMB 0.362 billion.

The increase in community value-added service revenue mainly comes from the growth of local lifestyle services. In more granular business categories, liquor, retail, and new energy businesses are the projects growing at faster rates.

Management said that in integrated marketing, home furnishing, retail, liquor, and new energy businesses, most of them have achieved annualized growth of around 40% or even 100%. Combined, the six business lines achieved revenue close to RMB 2.5 billion, contributing the majority of value-added revenue and serving as the core driver of value-added revenue growth. Meanwhile, based on the business foundation accumulated over the past two years, over the next three to five years, the six strategic business lines will each aim to build community private-domain professional companies that are leading nationwide in their corresponding sub-markets as development targets.

In terms of production and operations, a company needs to build multiple sustainable growth curves to create high competitive barriers. On the other hand, as a property company, at a time when “service” is mentioned before “management,” it also needs to consider balancing service quality improvements with rising costs.

Country Garden Services has the largest managed scale in the industry. In the past, this portion of area was an engine for revenue growth; today, it is the biggest challenge the company faces in upgrading and transforming to higher quality.

Management said the company is currently gradually building a new-quality productive forces system composed of three parts: service personnel, intelligent-agent robots, and intelligent IoT collaboration, to help further transform and improve efficiency in the operations system.

“In early 2025, we assessed the on-site resource allocation for each project, and we developed a one-project-one-plan turnaround方案 and targets to ensure the turnaround goals are achieved, while not adding new losses. We will not easily give up on any loss-making project. In the entire 2025 year, we achieved a profit contribution of roughly RMB 110 million through turnaround of projects.”

In addition, Country Garden Services’ self-developed “Zero Resident” cleaning robot has been gradually implemented in practice. In pilot projects, the completion rate of cleaning, elevator maintenance, and repair work orders in 2025 is close to 100%. Overall project satisfaction increased by 19 percentage points year over year.

In 2025, Country Garden Services delivered 1,053 cleaning robots, covering more than 200 projects and 2,500 buildings. According to management’s estimate, in 2026 the company plans to roll out 10,000 cleaning robots, transforming pure human labor services into a human-machine intelligent collaboration model.

Entering 2026, Country Garden Services believes the company’s overall revenue growth will remain stable. The company expects the revenue scale to exceed RMB 50 billion, and the downward trend in core net profits at scale will be reversed. Overall, profit will stop declining and rebound.

“Starting from 2026, over the next three to five years, the six strategic business lines will enter a phase of deepening and solidifying. We expect that by 2028, the structural adjustment of the core businesses and capability building will basically be completed. Therefore, the next three years will still be a transformation period, but it will move into a stage where value is continuously released and demonstrated.”

Disclaimer: The contents and data in this article are compiled by Guandian.cn based on publicly available information and do not constitute investment advice. Please verify before using.