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Redsun Services Group Limited (“Redsun Services” or the “Group”), a fast-growing comprehensive community services provider that focuses on the Yangtze River Delta, has announced that its wholly-owned subsidiary, Hong Life Property Management, has acquired an 80% equity interest in each of two property management companies in Nanjing – Gaoli Property and Jiangsu Gaoli Meijia(“Target Companies”) – from Gaoli Holdings, for a total consideration of RMB73.54 million. The acquisition will enable Redsun Services to expand its business scope and coverage, enhance economies of scale for the Group’s development in Jiangsu Province, foster the development of its value-added services and other businesses, and in turn, bring new opportunities for the growth of the Group.

The Target Companies are principally engaged in the provision of property management services in the China, with a focus on property services relating to home fittings ports and automobile display venues. For the year ended 31 December 2020, revenue of the Target Companies amounted to RMB36.52 million, representing an increase of 33.9% when compared to the same period last year. Profit after taxation was RMB73.01 million, representing a growth of 56.7% compared to the level in the same period last year. Pursuant to the agreement, the Target Companies pledged to Hong Life Property Management that their operating revenue for the financial year of 2021, 2022 and 2023 will not be less than RMB42.40 million, RMB48.76 million and RMB56.07 million respectively. Net profit will not be less than RMB8.81 million, RMB10.13 million and RMB11.65 million, respectively. The acquisition was equivalent to a price earnings ratio of approximately 10.4 times (based on the guaranteed minimum net profit of the Target Companies 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).

The acquisition will fill up the gap of the Group in the niche market of property management in the automobile display venue industry. Against the backdrop of the revival of the macro-economy in a post-COVID period, the automobile industrial parks and automobile display venues will present tremendous growth potential in terms of property development. The Group is well-positioned to achieve breakthroughs in this new niche market.

As of the date of this announcement, the Target Companies had a total of 12 property management and service projects, with total contracted GFA of approximately 1,194,659 sq.m. The Target Companies provide services that cover the full entrustment of property management services, property project planning services, security services, cleaning services, repair and maintenance services, gardening and greening services, domestic services and commercial services, to home fittings ports, automobile display venues, apartments and residential buildings and so forth. As of 31 December 2020, the unaudited combined net asset value was approximately RMB22.02 million.

Upon completion of the acquisition, the Target Companies will become subsidiaries of the Group and their 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. In December 2020, the Group was included by FTSE Russell in the FTSE Global Micro-Cap Index. In April 2020, the Group was selected as Hang Seng Property Service and Management Index.


Topic: Press release summary