Redsun Services Acquires 80% Equity Interest in a Wuhan Property Management Company at RMB216 Million
HONG KONG, Jan 4, 2021 – (ACN Newswire) – Redsun Services Group Limited (“Redsun Services” or the “Group”; stock code: 1971), a fast-growing comprehensive community service provider focused on the Yangtze River Delta, announced its wholly-owned subsidiary Hong Life Property Management agreed to acquire 80% equity interest in a Wuhan property management company (the “Target Company”) from Huidehang Property Holdings in a total consideration of RMB216 million. The acquisition will facilitate the implementation of the “dual-driven” strategy of the Group in central China regions, helping to enhance both the gross and net profit margins of the Group as well as its competitive advantages.
The Target Company is principally engaged in the provision of property management services in Wuhan in the PRC. As at the date of this announcement, the aggregate GFA of properties under management by the Target Company is approximately 1.77 million sq.m. The unaudited consolidated net asset value of the Target Company as at 31 October 2020 was approximately RMB27.51 million. The Target Company is a wholly-owned subsidiary of a property enterprise group ranked in the top 30 of Top 100 Property Management Companies of China, which principally operates in central China regions and has for years focused on properties such as office buildings, public buildings and shopping malls. The gross profit margin of the Target Company is relatively high, with a gross profit margin and net profit margin of 38% and 22% respectively in the financial year of 2019.
Pursuant to the agreement, Huidehang Property Holdings has undertaken to Hong Life Property Management that the operating revenue of the Target Company for the financial year of 2021, 2022 and 2023 will not be less than RMB86.25 million, 99.19 million and 114.07 million respectively, while net profit will not be less than RMB20.70 million, 23.81 million and 27.38 million respectively. The acquisition equivalent to a price earnings ratio of approximately 13 times based on the guaranteed minimum net profit of the Target Company for the year ending 31 December 2021, and was determined with reference to the merger and acquisition cases in the same industry in the market.
Upon completion of the acquisition, the Target Company will become subsidiaries of the Group and its financial information will be consolidated into the financial statements of the Group.
About Redsun Services Group Limited
Established in Nanjing in 2003, Redsun Services Group Limited is a fast-growing comprehensive community service provider focusing on the Yangtze River Delta. With a vision of “making lives warmer,” the Group has provided and endeavor to continue to “provide customers with high-quality services with sincerity” to serve its customers. The Group has established the regional leading position in the property management market of Jiangsu province and is well-recognised nationwide. The Group was recognized as one of the Top 100 Property Management Companies by CIA for four consecutive years since 2017 and ranked 25th among the 2020 Top 100 Property Management Companies in terms of overall strength.
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