(Yicai Global) March 9 -- Shares of Yuexiu Services Group slumped after the property management unit of Chinese real estate giant Yuexiu Property said its gross profit margin narrowed last year even as net profit and revenue grew.

Yuexiu Services [HKG: 6626] ended 19.2 percent down at HKD3.75 (48 US cents) today, after earlier plunging by as much as almost 23 percent.

Gross profit margin was 27.3 percent in 2022, versus 35 percent the previous year, mainly because the firm’s value-added services are still in the growth stage, Guangzhou-based Yuexiu Services said yesterday. The figure will likely rise to the industry’s average level as services increase.

Net profit rose 15.7 percent to CNY416 million (USD59.7 million) in the period, and revenue jumped nearly 30 percent to CNY2.5 billion (USD358.6 million), the company said.

Yuexiu Services provided management services for 323 property projects with a total of 51.7 million square meters as of the end of last year, with the managed project area up 33 percent from 2021. The firm provided or has agreed to provide services for 387 projects with a total contracted area of 70.6 million sqm, up 21 percent.

Yuexiu Services had 13.1 million sqm worth of new contracted management area last year, of which about 64 percent were from third parties and the remaining from the firm’s affiliates.

The company will continue efforts and try its best to achieve the goal of having 100 million sqm under management in the three years following its June 2021 listing, it noted.

Yuexiu Services had around CNY4.4 billion of cash on hand as of the end of 2022, the firm said, adding that it will actively explore and keep an open mind on mergers and acquisitions.

Yuexiu Services has had only one M&A since it went public, as it relies more on managing properties of third parties and affiliates to expand business. Last October, the firm acquired a unit of Chinese theme park operator Chimelong Group for CNY9.5 million (USD1.4 million).

Editor: Futura Costaglione