Against the backdrop of profound adjustments in the real estate sector, the property management industry is undergoing a historic shift from prioritizing "scale" to focusing on "high-quality development." As a pioneer in high-quality industry development, SHIMAO SERVICES (00873) delivered an annual report for 2025 marked by significant resilience and value. This performance not only represents a milestone in the deep implementation of its "Six-Dimensional Comprehensive New Development" strategy but also serves as a robust exploration of the industry's future evolutionary path. In 2025, despite dual pressures from industry adjustments and intensified market competition, the company eschewed blind expansion. Instead, it successfully built a high-quality growth system centered on quality and supported by efficiency through brand empowerment and lean operations. This strategic shift from "land grabbing" to "value competition" not only stabilized the company's foundation amidst volatility but also achieved breakthrough improvements in core profitability and the quality of external market expansion.

Lean operations have solidified the foundation for development, leading to a dual leap in profit quality and efficiency. Examining SHIMAO SERVICES' 2025 financial data reveals the most notable characteristic: profit growth outpaced revenue growth, signaling a transition from extensive growth to more penetrating, lean operations. Reportedly, the company achieved operating revenue of RMB 7.88 billion during the period. After excluding factors such as the disposal of Jinshatian, actual business growth was nearly 10%, demonstrating the robust internal momentum of its core operations. More impressively, core net profit reached RMB 600 million, a substantial year-on-year increase of 20%. The core net profit margin also steadily improved by 1.0 percentage points to 7.3%. This enhancement in profit quality is particularly valuable in the current industry environment. It is worth noting that the counter-trend improvement in profit margins did not stem merely from cost-cutting but from a synergistic effect of optimizing the revenue structure and enhancing management efficiency.

In 2025, property management services, acting as the company's "ballast," contributed revenue of RMB 5.82 billion, accounting for 73.8% of the total, highlighting their increasingly stabilizing role. Within this segment, revenue from residential properties grew 8.3% year-on-year to RMB 3.78 billion, solidifying the revenue base through continuous quality improvements and enhanced customer loyalty. Simultaneously, the non-residential sector demonstrated stronger growth momentum. High-value segments such as office buildings and public structures achieved rapid growth of 17.2% and 19.4%, respectively, while the hospital and wellness business also increased by 7.7% to RMB 560 million. This structural optimization means SHIMAO SERVICES is no longer overly reliant on a single business type, instead forming a risk-resistant pattern where residential and non-residential businesses advance together and develop synergistically.

Refined management reforms served as another major engine for profit growth. By deploying its "Three Lean Initiatives" action plan, SHIMAO SERVICES continuously improved its ability to reduce administrative expenses. Reportedly, in 2025, the company's administrative expenses decreased significantly by 15.7% year-on-year to RMB 700 million. Sales expenses also fell by a further 8.3%, following three consecutive years of decline. This was attributed to streamlining the organizational structure for greater efficiency and the ongoing refinement of management granularity. The company strictly controlled budget management and resource allocation, directly reducing service procurement costs by strengthening supply chain development and leveraging economies of scale in centralized purchasing. This deep cultivation of internal capabilities ensured that every unit of input was converted into tangible operational benefits, thereby releasing greater profit potential while maintaining stable revenue.

For SHIMAO SERVICES, the continuous iteration of service quality is the core logic for maintaining its competitive advantage. In 2025, the company fully promoted its "Heart吸引力 Live+" quality renewal campaign, further upgrading service standards from "standardization." In the residential sector, the company invested heavily in hardware upgrades, brightening 18,000 homecoming routes and activity spaces throughout the year, and completing 613,000 elevator maintenance tasks and 540,000 square meters of landscaping maintenance. This "beyond expectations" service for residents was directly reflected in 1.96 million homeowner visits. By focusing on "warm services" and specialized care for "the elderly and the young," the company significantly enhanced emotional connections within communities and the perception of service quality. Ultimately, the premium effect of quality not only stabilized the collection rate for existing business but also paved the way for developing value-added services. Consequently, revenue from community value-added services grew 9.1% year-on-year to RMB 1.32 billion, increasing its share to 16.8% and successfully opening new ceilings for profitability.

If lean operations secure SHIMAO SERVICES' "present," then precise market expansion and deep technological empowerment anchor its "future." In 2025, the company demonstrated strong aggressiveness in market expansion, adding new annual saturated revenue of RMB 2.0 billion, a sharp increase of 35.1% year-on-year. This figure set a new historical record, signifying that its independent expansion capability is firmly within the industry's first tier. However, unlike the previous "land grabbing" approach focused on area scale, the 2025 expansion logic exhibited a distinct "value preference." Among the newly added 54.836 million square meters of contracted area, projects in high-tier urban clusters accounted for a significant 70.2%, with projects in tier-one, new tier-one, and tier-two cities comprising 73.2%. This "city-deepening" strategy focused on core regions not only significantly boosted saturated revenue per city in locations like Shanghai, Xiamen, and Xi'an but also reduced marginal costs through higher management density per unit area, achieving a balanced transformation of scale and效益.

In exploring business boundaries, SHIMAO SERVICES is no longer confined to management within traditional walls but is comprehensively upgrading towards becoming an integrated industrial service operator. In 2025, the company successively won several benchmark projects in specialized segments, including Renmin University of China, the Tianjin Jinyao Group Industrial Park, and the Hunan Provincial Hospital of Traditional Chinese Medicine. This reflects the increasing maturity of SHIMAO SERVICES' "Ten Vertical, Ten Horizontal" business layout and its professional competitiveness in high-barrier segments like high-end industrial services and university management. Concurrently, the company's proposed "Grand Integration" development strategy deeply integrates property management services with the silver economy and pet economy. The construction of this cross-border ecosystem is unleashing remarkable growth potential. For instance, the elderly care service business, deepened against the backdrop of an aging population, saw its revenue grow to RMB 220 million in 2025, an increase of nearly 16%. This model, which uses traditional property as a traffic entry point and creates incremental value through professional services, is becoming a typical example of its second growth curve.

The underlying driver supporting this series of complex business operations and efficient management is SHIMAO SERVICES' firm commitment to AI technology and digital-intelligent transformation. Reportedly, in 2025, by promoting the AIS smart energy management platform, the company achieved multi-scenario coordination, with an average project energy consumption reduction efficiency reaching 24%. Service robots deployed across various domains achieved 1.5 times the efficiency of a single human worker. From security patrols to intelligent customer service, the application of AI is systematically reshaping the property management value chain, making management actions more proactive and transparent. As management stated, industry competition is evolving from contests of single capabilities to contests of comprehensive capabilities, and technological empowerment is key to building core barriers.

Looking ahead to 2026, amidst policy tailwinds favoring "quality improvement in existing stock" and macro opportunities from the elevated status of property management in the 15th Five-Year Plan, SHIMAO SERVICES, with its stable operational foundation, strong expansion momentum, and intelligent operational system, is steadily advancing towards a future of high-quality and sustainable development with the posture of a long-distance runner.