Roiserv Lifestyle (2146.HK) Q4 2024 Earnings Report

Roiserv Lifestyle Services reported QQ4 2024 revenue of 480.88 million CNY, down 48.0% year over year, reflecting a subdued China property cycle and challenging base effects. Despite the top-line decline, the company delivered positive operating profitability with operating income of 15.50 million CNY and net income of 11.36 million CNY, supported by a relatively low cost base and disciplined cost management, as evidenced by a gross margin of 18.3% and an EBITDA of 6.73 million CNY. The quarter also showcased robust cash generation, with operating cash flow of 15.22 million CNY and free cash flow of 13.14 million CNY, underscoring the business’s ability to convert earnings into cash. The balance sheet remains notably healthy, characterized by a net cash position (net debt negative 566.24 million CNY), substantial cash and cash equivalents of 583.60 million CNY, and a modest total debt load of 17.36 million CNY. However, balance sheet metrics reveal working capital intensiveness common to property services peers: receivables of 2.15 billion CNY and inventories of 339.14 million CNY, contributing to a high working capital cycle (days sales outstanding ~401.5 days; inventory ~77.7 days; cash conversion cycle ~462.7 days). Management commentary on receivables collection and portfolio mix would help assess earnings quality going forward. Given the absence of formal forward guidance in the QQ4 filing and the ongoing sensitivity of Chinese property services to real estate market conditions, the investment thesis hinges on leverage of non-core and recurring revenues (parking, convenience retail, community services, space management) to offset any base-management fee stagnation. The stock’s current valuation metrics (P/E ~14.0x, P/B ~0.29x) appear modest against potential downside risks, yet require a clearer path to revenue stabilization and mid-term margin expansion to justify sustained multiple expansion.