Exchange: HKSE | Sector: Real Estate | Industry: Real Estate Services
Q2 2025
Published: Jun 30, 2025
Earnings Highlights
Revenue of $225.01M up 94.2% year-over-year
EPS of $0.05 increased by 234.4% from previous year
Gross margin of 34.5%
Net income of 29.71M
"N/A" - N/A
Xinyuan Property Management Service Cayman Ltd (1895.HK) QQ2 2025 Results: Revenue Growth, Strong Margins, and Low Leverage in China's Real Estate Services
Executive Summary
Xinyuan Property Management Service Cayman Ltd posted a robust QQ2 2025 performance, underpinned by strong revenue and margin delivery alongside a conservatively levered balance sheet. Reported revenue of 225.008 million CNY and gross profit of 77.7215 million CNY yielded a gross margin of 34.54%, while EBITDA reached 34.506 million CNY and net income amounted to 29.7055 million CNY. The company’s operating margin stood at 14.43%, and the net margin at 13.20%, signaling effective cost control as scale increases in its China property management portfolio.
Despite positive current earnings, the balance sheet remains highly conservative with a debt ratio of 2.79% and a debt-to-equity ratio of 0.055, indicating low financial risk. Cash flow per share remains negative (-0.097 from operating activities and -0.0995 for free cash flow per share), suggesting continued capital expenditure, working capital needs, or timing effects in receipts and payables despite positive net income. The cash conversion cycle is approximately 60 days, driven by longer collections (DSO ~82 days) relative to payables (DPO ~37 days) but offset by steady inventory turnover (about 5.82x) in the real estate services context.
Overall, the QQ2 2025 results indicate a favorable trajectory in revenue and profitability with prudent balance sheet management. The main questions for investors center on sustaining cash generation, optimizing net working capital, and translating revenue growth into durable free cash flow as the company scales its value-added services and expands in a competitive Chinese property management market.
Key Performance Indicators
Revenue
225.01M
QoQ: 100.00% | YoY:94.20%
Gross Profit
77.72M
34.54% margin
QoQ: 100.00% | YoY:175.71%
Operating Income
32.46M
QoQ: 100.00% | YoY:77.46%
Net Income
29.71M
QoQ: 100.00% | YoY:228.32%
EPS
0.05
QoQ: 100.00% | YoY:234.42%
Revenue Trend
Margin Analysis
Key Insights
Revenue: 225.008 million CNY; Gross profit: 77.7215 million CNY; Gross margin: 34.54%; EBITDA: 34.506 million CNY; Operating income: 32.4635 million CNY; Net income: 29.7055 million CNY; Net margin: 13.20%; EBITDA margin: 15.33%; Operating margin: 14.43%; Pre-tax margin: 16.64%; Tax expense: 6.977 million CNY.
YoY / QoQ trends (as reported): Revenue YoY +94.20%, QoQ +100.00%; Gross profit YoY +175.71%, QoQ +100.00%; Operating income YoY +77.46%, QoQ +100.00%; Net income YoY +228.32%, QoQ +100.00%.
Revenue and profitability:
- Revenue: 225.008 million CNY; Gross profit: 77.7215 million CNY; Gross margin: 34.54%; EBITDA: 34.506 million CNY; Operating income: 32.4635 million CNY; Net income: 29.7055 million CNY; Net margin: 13.20%; EBITDA margin: 15.33%; Operating margin: 14.43%; Pre-tax margin: 16.64%; Tax expense: 6.977 million CNY.
- YoY / QoQ trends (as reported): Revenue YoY +94.20%, QoQ +100.00%; Gross profit YoY +175.71%, QoQ +100.00%; Operating income YoY +77.46%, QoQ +100.00%; Net income YoY +228.32%, QoQ +100.00%.
- EPS: 0.0515 CNY (diluted 0.0514 CNY); Weighted average shares: 577.378 million.
Efficiency and capital structure:
- Current ratio: 1.685; Quick ratio: 1.599; Cash ratio: 0.327; Long-term debt to capitalization: 0.0%; Total debt to capitalization: 0.0525.
- Receivables turnover: 1.097x; Payables turnover: 2.42x; Inventory turnover: 5.82x; Asset turnover: 0.360x; Fixed asset turnover: 4.85x.
- Cash flow per share (operating): -0.0970; Free cash flow per share: -0.0995; Cash per share: 0.373. Payout ratio: 0%; Price-to-book: 0.402x; Price-to-earnings: 1.064x; Price-to-sales: 0.562x; Price-to-free cash flows: -4.40x.
Liquidity and capitalization:
- Debt ratio: 0.0279; Debt to equity: 0.0554; Total debt to capitalization: 0.0525; Cash flow coverage ratios (aggregate): -1.608.
- Cash and liquidity position appears steady but negative free cash flow signals ongoing capital investments or working capital needs that are not yet offset by operating cash flow.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
225.01M
94.20%
100.00%
Gross Profit
77.72M
175.71%
100.00%
Operating Income
32.46M
77.46%
100.00%
Net Income
29.71M
228.32%
100.00%
EPS
0.05
234.42%
100.00%
Key Financial Ratios
currentRatio
1.69
grossProfitMargin
34.5%
operatingProfitMargin
14.4%
netProfitMargin
13.2%
returnOnAssets
4.75%
returnOnEquity
9.45%
debtEquityRatio
0.06
operatingCashFlowPerShare
$-0.1
freeCashFlowPerShare
$-0.1
priceToBookRatio
0.4
priceEarningsRatio
1.06
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript insights not provided in the dataset. Earnings call transcript array is empty, so management commentary and quotes are unavailable. When available, these sections should summarize strategic shifts (e.g., service mix changes, customer acquisition, efficiency programs), operational updates (e.g., contract wins, pricing, labor costs), and market conditions (e.g., policy changes, consumer sentiment in China).
N/A
— N/A
N/A
— N/A
Forward Guidance
No formal forward guidance was disclosed in the provided data. However, given the sector dynamics and Xinyuan’s quarterly results, the following considerations are relevant for investors:
- If the company continues to scale its value-added services (onsite cleaning, facilities management, predelivery services, and digital/center services), there is potential for improved operating leverage and higher-margin revenue mix over time.
- Industry and policy tailwinds in China’s property management market could support steady demand, but a slower housing market or tightening regulatory environment could compress pricing power and cap growth.
- Key factors to monitor include: new contract momentum in non-residential portfolios (offices, schools, public buildings), working capital efficiency (DSO compression), and the conversion of earnings into meaningful free cash flow after capex and working capital cycles.
- Management commentary, if provided in the next release, should clarify target ranges for revenue growth, margin expansion, capex plans, and dividend or capital allocation strategy.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1895.HK Focus
34.54%
14.40%
9.45%
1.06%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
QQ2 2025 results underscore a positive trajectory in revenue and profitability, underpinned by a low-leverage balance sheet and a resilient margin profile. The absence of explicit forward guidance necessitates a cautious, data-driven approach. If Xinyuan can translate its revenue growth into sustained free cash flow through tighter working capital management and prudent capex allocation, the stock could re-rate on fundamentals rather than multiple expansion alone. The company’s valuation remains modest (P/E around 1.1x, P/B around 0.40x), implying limited downside if earnings momentum persists; upside hinges on improved cash generation, stronger contract wins in both residential and commercial property management, and a favorable macro backdrop for China’s real estate services market. Key factors to monitor include DSO movements, capex intensity, and any management-color on growth initiatives or new contracts in non-residential properties.
Key Investment Factors
Growth Potential
Potential to scale through value-added services, higher contract penetration in residential and commercial properties, and expansion into other property types and geographies within China. Continued monetization of predelivery and center services could improve mix and margins. The low leverage profile supports capacity for disciplined capex to support growth.
Profitability Risk
Risks include a potential downturn in China’s real estate market impacting property developers and property owners, regulatory shifts affecting fee structures or service demand, working capital volatility (DSO), and competition from among peers in China’s sizable property management sector. The negative free cash flow trend, despite positive net income, could signal capital intensity and timing risk.
Financial Position
Low leverage and healthy liquidity buffer (debt ratio 2.79%, debt to equity 0.055) support resilience in a volatile macro backdrop. However, sustained negative free cash flow per share points to near-term cash outflows that need to be offset by stronger operating cash flow or capital allocation efficiency. The equity base is modestly valued (P/B 0.402x; P/E 1.064x), leaving limited downside protection from valuation multiples in the near term.
SWOT Analysis
Strengths
Low leverage and conservative balance sheet (debt ratio 0.0279, debt-to-equity 0.0554) reducing financial risk in a cyclical industry.
Healthy gross margin (34.54%) and solid operating margin (14.43%) indicating pricing power and efficient cost management within property management and value-added services.
Diversified service offering across predelivery, onsite operations, and ongoing property management, which supports revenue stability and cross-selling opportunities.
Positive net income trajectory with scalable revenue base in QQ2 2025.
Weaknesses
Negative free cash flow per share (-0.0995) suggesting capital expenditures or working capital needs outpacing operating cash flow in the near term.
Limited visibility from the provided transcript (no management commentary in this dataset) hindering a full read on strategic pivots or execution risk.
Valuation multiples suggest a modest growth expectation, which may constrain upside without material margin expansion or cash flow conversion improvements.
Opportunities
Expansion of value-added services and predelivery-related offerings to strengthen service mix and margins.
Geographic and customer diversification within China to reduce customer concentration risk and unlock new contract opportunities.
Potential consolidation in the fragmented Chinese property management market could improve scale and pricing power.
Threats
China’s real estate downturn and regulatory environment could dampen demand for property management services or affect pricing power.
Working capital volatility and macro headwinds may pressure cash flow generation and limit capital return potential.
Competition from larger, more diversified peers could compress margins if rate cards or service bundles become commodity-like.