Yuexiu Services Group (6626.HK) Q2 2025 Earnings Report

Bottom-up assessment supports a cautiously constructive stance. Yuexiu Services demonstrates a credible profit generation profile with margin discipline and modest leverage, evident in Q2 2025 results: revenue near 0.981 billion CNY, gross margin of 21.3%, EBITDA of 141.7 million CNY, and net income of 119.9 million CNY. The balance sheet shows resilience with favorable liquidity metrics and a conservative debt footprint, implying capacity to fund growth initiatives or pursue selective acquisitions if opportunities arise. The current valuation metrics—P/E around 4.1x, P/B around 1.10x, and dividend yield near 2.9%—position Yuexiu Services as a defensively valued name within China’s real estate services landscape, trading at a discount to several peers with higher growth expectations and more aggressive capex profiles, albeit with less visible near-term top-line acceleration. Key investment considerations include: - Operational leverage in the Value-Added Services segment and the potential to convert incremental revenue into higher margins. - Sustainability of revenue growth given China’s property market dynamics and regulatory backdrop. - Monitoring the firm’s contract wins, renewal rates, and pricing power in both non-commercial and commercial property management. - Cash flow quality and capital allocation efficiency in the wake of modest dividends and potential need for future capex. Overall, the stance is Neutral-to-Slightly-Positive, contingent on management’s ability to translate revenue growth into sustainable margin expansion and cash flow generation, while navigating industry cyclicality and policy risk. Investors should request and incorporate formal earnings-call guidance and management commentary to refine forecasts and the investment thesis over the next two quarters.