On March 29, Country Garden Services (06098.HK) issued an announcement on the progress of the acquisition of a 93.76% stake in Zhongliang Baiyue Zhijia Service Co., Ltd. (“Zhongliang Baiyue Zhijia”).
According to the announcement information, Country Garden Property Hong Kong, a wholly-owned company of Country Garden Services, agreed to acquire approximately 93.76% equity of Zhongliang Baiyue Zhijia by cash payment, with a total consideration of not more than 3.129 billion yuan. As of the announcement date, the equity has been transferred to Country Garden Property Hong Kong, and the director of Zhongliang Baiyue Zhijia has also been changed to the designated director of Country Garden Property Hong Kong.
According to the announcement, the total consideration of the acquisition of 3.129 billion yuan includes that the consideration for the project under management does not exceed about 748 million yuan (the actual payment amount is deducted from the unreturned target group The balance after the arrears from related transactions shall prevail); the consideration for non-owner value-added business under management shall not exceed RMB 45 million; the consideration for projects in transit shall not exceed RMB 720 million; the consideration for the remaining net assets of the Target Group on December 31, 2021 shall not exceed approximately RMB 4464 RMB 10,000; the consideration for future new projects (if any) shall not exceed RMB 1.571 billion.
On February 14, Country Garden Services issued a relevant announcement on the acquisition of 93.76% equity of Zhongliang Baiyue Zhijia. According to the Hong Kong Stock Exchange, Zhongliang Baiyue Zhijia, who has submitted forms twice, has passed the hearing on December 23, 2021. According to the prospectus of Zhongliang Baiyue Zhijia, Country Garden Services is the company’s third largest shareholder, holding 6.24% of the shares; the company’s largest shareholders are Wenzhou businessmen Yang Jian and Xu Xiaoqun, who together hold 81.58% of the shares. Upon completion of the acquisition, Zhongliang Baiyue Zhijia will become an indirect wholly-owned subsidiary of Country Garden Services.
Regarding the acquisition, Country Garden Services stated in the announcement that the acquisition will complement the company’s business and help strengthen its brand influence in mid-to-high-end residential property management. Expand the potential of community value-added services; and the projects of Country Garden Services and Zhongliang Baiyue Zhijia and its subsidiaries have a high degree of overlap in the business area, which is conducive to integrating the advantages of both parties in the overlapping business areas in the future, reducing operating costs and improving profitability. The acquisition will also further enhance the company’s influence and competitiveness in the market and contribute to the company’s long-term stable development.
Prior to this, Country Garden Services had successively acquired a number of property service companies. On September 28, 2021, Country Garden Services announced that it would acquire 100% of the equity of Neighborhood Holdings Group Co., Ltd., a subsidiary of Colour Life, at a price of not more than 3.3 billion yuan; Acquisition of R&F Property Services Group Co., Ltd. for consideration; 2 February 2021On the 5th, Country Garden Services announced that it would acquire a 64.6203% stake in Blu-ray Garbo Services, another Hong Kong main board-listed company, at a consideration of 4.846 billion yuan.
Country Garden Services released its 2021 annual results on March 29. During the reporting period, Country Garden’s service revenue was 28.84 billion yuan, a year-on-year increase of 84.9%, its net profit increased by 56.4% year-on-year, and its gross profit margin was 30.7%, a year-on-year decrease of 3.3 percentage points. In terms of revenue structure, property management services are one of its core businesses. During the reporting period, Country Garden’s service contract management area was 1.52 billion square meters. As of December 31, 2021, the property management service revenue was 13.79 billion yuan, a year-on-year increase of 60.3%.
As of press time, Country Garden Services reported HK$32.8/share, an increase of 4.79%.