Orient Securities has issued a research report adjusting its forecasts for SHIMAO SERVICES' (00873) business revenue growth, gross margin, and sales/management expense ratios based on recent operational performance. The firm maintains an "Overweight" rating while revising the target price to HK$0.73.

The report highlights SHIMAO SERVICES' sustained market expansion efforts, including broadening coverage in high-tier city clusters and diversifying service scenarios, which are expected to support stable growth in core property management.

In H1 2025, the company achieved both quantitative and qualitative improvements in market expansion: - Third-party competitive bidding brought new annualized contract value of approximately RMB960 million, up 54.6% YoY. - New contracted area reached 40.1 million square meters, a 126.6% YoY increase—both setting historical records. - Average residential property fees for new projects rose to RMB2.9/sq.m/month, reflecting dual improvements in project quality and profitability.

The expansion strategy remains focused on core city clusters and high-tier markets, with 74% of new projects located in Beijing-Tianjin-Hebei, Yangtze River Delta, and Greater Bay Area. Tier 1/2 cities accounted for 73% of new projects. Notably, high-quality clients with annual contracts exceeding RMB5 million now represent 64.3% of the total.

From July to October, the company secured nearly 200 new projects across industrial parks, commercial properties, residential complexes, schools, hospitals, and government logistics services—further expanding service scenarios and customer value boundaries to underpin future stable growth in core property management.