Focusing on resilient growth and improving quality and efficiency, KANGQIAO SER (02205) is poised to enter a new development cycle.

At a time of deep adjustment in the real estate industry, the investment logic of the Hong Kong stock market's property management sector has been thoroughly restructured. The market's previous enthusiasm for growth models based on scale expansion and reliance on parent companies for delivery has shifted; now, investors place greater emphasis on profitability quality, market expansion capabilities, and corporate governance. On August 26, KANGQIAO SER (02205) announced its mid-term results for 2026, reporting revenue of approximately 470 million yuan in the first half of the year, representing a year-on-year increase of 3.2%. The gross profit was about 106 million yuan, up 8.0% year-on-year, and the overall gross margin increased to 22.6%, a rise of 1 percentage point compared to the previous year. Against the backdrop of overall industry growth slowdown, the structural changes hidden behind this report have become a focal point worthy of scrutiny. Looking at KANGQIAO SER's revenue trajectory over an extended timeframe, from the first half of 2021 to now, the companys revenue has undergone a complete cycle from rapid growth to a period of stabilization. From 2021 to 2024, when the property management industry was still in an expansion phase dominated by scale, KANGQIAO SER achieved impressive revenue growth of nearly 20%. Since the beginning of 2024, as downstream risks in real estate have been released, the overall revenue growth in the industry has significantly decreased. In this context, KANGQIAO SERs 3.2% revenue growth is quite solid. Whats even more noteworthy is that this growth is based on an improvement in business qualityKANGQIAO SER has not pursued scale through price cuts or relaxed credit policies but has instead relied on the stable growth of its core business in property management services. During the reporting period, this segment generated approximately 380 million yuan in revenue, accounting for about 80.8% of total revenue, an increase of 7.4% year-on-year. The countercyclical growth of the core business effectively hedged against industry volatility risks, solidifying the companys operational foundation. The performance of gross profit and gross margin further reveals a substantial improvement in the companys operational quality. While revenue grew only 3.2%, gross profit increased by 8.0%, significantly outpacing revenue growth. The overall gross margin rose countercyclically to 22.6%, a year-on-year increase of 1 percentage point. In a horizontal comparison, according to data from the China Index Academy, the average gross margin for listed property companies in 2025 is only 17.84%, and it continues to decline under overall industry pressure. KANGQIAO SERs gross margin increasing to 22.6% is nearly 5 percentage points higher than the industry average, validating the company's intensive efforts in cost control and project optimization. During the reporting period, the company's sales costs increased by only 1.9% year-on-year, far below revenue growth, indicating that cost-saving measures such as energy-efficient upgrades and smart operations are gradually being realized. When viewed by segment, the gross margins of all four major business lines have either increased or remained steady. The gross margin for property management services reached 21.9%, up 0.7 percentage points year-on-year, while the margin for non-owner value-added services surged significantly by 3.8 percentage points to 29.3%, reflecting the structural optimization achieved by the company as it actively reduced low-margin and poorly performing businesses. As the industry shifts from "competing for scale" to "competing for quality," the continued improvement in business gross margins is more persuasive than mere growth in scaleit signifies that the company no longer relies on inefficient expansion to inflate numbers but has genuinely acquired the ability to enhance unit output through refined operations. If the performance recovery answers the question of "how to do it now," then KANGQIAO SER's structural optimization responds to the deeper logic of "why it can." In this financial report, the core highlight of KANGQIAO SER lies in its highly market-oriented business structure, which distinguishes it from most property companies listed in Hong Kong and forms a significant competitive moat. As of the first half of 2026, the company's contracted area is approximately 70 million square meters, with third-party developers accounting for 82.0%; the managed area is 47.9 million square meters, with third-party involvement at 78.2%, while revenue from related parties contributes only 0.7%. When these figures are viewed in the industry context, their significance becomes even clearer. In the past few years of deep adjustment in the real estate industry, many property management companies heavily reliant on capital from related parties have found themselves in a predicament where they cannot abandon their parent company's projects and cannot secure external projects. In contrast, KANGQIAO SER has seized the opportunity for quality third-party projects during the industrys clearing process due to its earlier proactive structural adjustments aimed at reducing low-margin and poorly performing businesses. According to data from CR Research, the average contract management ratio for listed property companies in 2025 is 1.2, while KANGQIAO SERs figure stands at 1.46, which is better than the industry average. This indicates that the company not only has the capacity to independently acquire customers but also has ample room for converting existing resources. This "independence dividend" represents a compounding effect: during periods of industry turbulence, independent market capabilities can competitive advantages in project acquisition; the gain of more quality third-party projects further reinforces the company's independence, creating a positive cycle. As the industry enters an era of "competing for capabilities," KANGQIAO SER's earlier seeming "loss" from proactively separating itself from related parties has instead become its most valuable asset. In addition, in the first half of the year, the company successfully completed a change in its board of directors. The new board acknowledges issues with a candid and pragmatic attitude, comprehensively strengthening the internal control system and solidifying operational compliance. Looking to the future, the new board will lead the company through cycles with a more professional and independent governance stance, paving the way for stable and sustainable development.