CMB International believes that Redsun Services will deliver stronger-than-expected 2020 (Estimated) core profits (excluding listing expenses), seen spiking by 50% year-on-year to RMB88 million against market expectation of 40% growth. The Group's managed GFA will grow by 60% year-on-year and reach 25,000,000 sq.m. in 2020. Value-added services could become a new growth engine. Redsun Services achieved a robust 261% growth in its agent business in the first half of 2020, with gross profit margin surpassing 50%. In the second half of 2020, the advertisement business is expected to recover fast and will further drive revenue growth. Bolstered by growth in GFA under management and improving penetration of its value-added services, CMB International expects community value-added services to spike by a CAGR of 134% and reach RMB343 million in 2020, accounting for 35% of the Group's gross profit.
In the policy front, the Ministry of Housing and Urban-Rural Development announced recently its support for property management firms to merge their online and offline services. CMB International takes a view that this development will gradually turn service providers into an internet traffic entrance that will connect residents to outside vendors, making their future business model more inclined to become dependent on service transaction fees. CMB International expects the overall sector to deliver another solid earnings growth in 2020.
On 21 December, the Group's major shareholder increased his stake to 166,000 shares at HK$4.67 per share, demonstrating his strong support for and confidence in the Group's services.
About Redsun Services Group Limited
Established in Nanjing in 2003, Redsun Services Group Limited is a fast-growing comprehensive community service provider focusing on the Yangtze River Delta. With a vision of "making lives warmer," the Group has provided and endeavor to continue to "provide customers with high-quality services with sincerity" to serve its customers. The Group has established the regional leading position in the property management market of Jiangsu province and is well-recognised nationwide. The Group was recognized as one of the Top 100 Property Management Companies by CIA for four consecutive years since 2017 and ranked 25th among the 2020 Top 100 Property Management Companies in terms of overall strength.
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