Evergrande Property Management Arm’s Profits Triple in First Report Since IPO
What’s new: Evergrande Property Services Group Ltd., the real estate management arm of one of China’s biggest developers, said its revenue rose 43.3% last year to 10.5 billion yuan ($1.6 billion), while its profit nearly tripled to 2.65 billion yuan, according to its first financial report since going public at the end of last year.
The company, controlled by China Evergrande Group, said it had properties with 300 million square meters in area under management during the year, marking an increase of 62.6 million square meters from 2019.
What’s the story: Evergrande Property Services is just one of several property management companies recently spun off from China’s largest real estate developers looking to better monetize those units with separate listings. Unlike their parents, management services providers have steadier business and are less prone to boom and bust cycles often seen in the property sector.
Other major developers to do similar spinoffs include China Vanke Co. Ltd. and Country Garden Holdings Co. Ltd.
Evergrande has also been struggling under a large volume of debt, and saw the listing as a way to raise funds to pay down some of that. It raised $1.8 billion in the listing. Since then the shares have performed strongly and now trade at nearly double their IPO price.
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