DIT Group Limited (0726.HK)

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Zhuyou Zhizao Technology (00726) and CCRE Real Estate entered into two agreements for decoration services and landscape services.

source
https://finance.sina.com.cn/stock/hkstock/ggscyd/2021-07-07/doc-ikqcfnca5538197.shtml

At 22:28 on July 7, 2021 Zhitong Financial Network

Zhuyou Intelligent Manufacturing Technology issued an announcement that on July 7, 2021, the company and CCRE Real Estate entered into an agreement to provide decoration services to CCRE Real Estate Group Framework Agreement One and Framework Agreement Two for the Provision of Landscape Services.

It is reported that the directors of the company have considered the following factors (if applicable) when reaching the proposed annual ceiling for decoration service arrangements and the proposed annual ceiling for garden landscape service arrangements:
First, in terms of decoration service arrangements, according to the company’s recent negotiations with CCRE, based on CCRE’s new demand in 2021, its new decoration projects that year are expected to require a total project area of ??approximately 1.54 million square meters. The total amount of decoration service contracts is approximately RMB 1.02 billion (the same unit below); it is estimated that in the decoration business of CCRE Real Estate in 2021, the group can undertake 50% of the maximum business volume, and the maximum total amount of decoration service contracts that can be undertaken Approximately RMB 510 million; calculated according to the actual conversion rate of the group’s existing contracts, the conversion rate of the group’s existing decoration service contracts to the current year’s revenue is approximately 68%, and the self-construction industry real estate undertook 510 million yuan in the second half of 2021. The contract is expected to be converted into operating income of about 300 million yuan.

Taking into account the implementation time of the Framework Agreement 1, it is estimated that the group can achieve 200 million yuan in revenue this year, accounting for about 67% of the relevant operating income; and based on the estimated demand of CCRE Real Estate and the estimated operating income conversion rate, the group expects 2022 The annual ceilings of the proposed decoration service arrangements in 2015 and 2023 will be increased to 300 million yuan and 400 million yuan respectively.

Second, in terms of garden landscape service arrangements, according to the company’s recent negotiations with CCRE, and based on CCRE’s new demand in 2021, its newly-added landscape projects in that year are expected to require a total project area of ??approximately 1.88 million square meters. The total contract value of the garden landscape service contract is about 940 million yuan; it is estimated that in the garden landscape business of CCRE Real Estate in 2021, the maximum business volume that the group can undertake is 50% of the total, and the maximum total contract value of the garden landscape service contract that can be undertaken is about 470 million yuan; according to the actual conversion rate of the group’s existing contracts, the conversion rate of the group’s existing landscape service contracts to the current year’s revenue is about 46%. It is expected to be converted into operating income of about 200 million yuan.

Taking into account the implementation time of the Framework Agreement II, it is estimated that the group can achieve 200 million yuan in revenue this year, accounting for 100% of the relevant operating income; and based on the estimated demand of CCRE Real Estate and the estimated operating income conversion rate, the group expects 2022 , In 2023, it is proposed that the annual upper limit of the garden landscape service arrangement will be increased to 300 million yuan and 400 million yuan respectively.

According to the announcement, the group has carried out market expansion and industrial layout in major cities in China, especially in the Central Plains region including Henan Province and its surrounding eight provinces and cities. Under the decoration service arrangement, it can efficiently provide construction materials for indoor hard decoration, soft decoration and outdoor decoration parts of residential public areas, sales offices, model rooms, bulk hardcover, commerce, clubs, office buildings, schools, shops, etc. Construction services such as installation and installation. Under the arrangement of garden landscape services, it can efficiently provide hard paving, seedling planting, landscape architecture, construction, landscape walls, fences, sketches, micro-topography, water features, lighting, and landscapes within the design scope. Design of water supply and drainage, background music, auxiliary facilities, etc., and technical services in the pre-construction and construction process. Relying on continuously improving business capabilities, the group can provide high-quality, large-scale decoration and garden landscape business delivery capabilities in the above-mentioned regions. By signing a framework agreement, the group can give full play to its advantages and technical expertise to obtain additional sources of income.