Onewo (2602.HK) shed 139 residential property service projects in the first half of the year, prompting a market-wide discussion about the company's retreat. On August 14, Onewo's Deputy Chairman, Executive Director, and Chief Operating Officer He Shuhua stated that exiting and entering markets are both normal business operations. The company reported revenue of approximately 19.112 billion yuan for the first half of 2026, a 5.4% year-on-year increase, but profit fell 2.1% to about 820 million yuan. Core net profit dropped 1% to approximately 1.263 billion yuan. The board proposed an interim dividend of 820 million yuan, or 0.711 yuan per share.

Originating from Vanke property management, Onewo focuses on property management and related technology services. Residential property remains its primary revenue source. In the first half of the year, the company exited multiple communities, drawing market attention. According to the performance announcement, these exits involved annualized saturated revenue of about 740 million yuan. He Shuhua explained that exits were made after careful evaluation, initiated only after efforts to improve operations, adjust service content, or modify fee structures failed to reach consensus with owners and property committees. He emphasized that the industry should focus on whether exit procedures are standardized, responsibilities are clear, and transitions are orderly, rather than overinterpreting the exits.

Reducing Related-Party Dependency

Onewo's main businesses include community space services, commercial and urban space services, and AIoT and BPaaS solutions. In the first half, community space revenue grew 5.5% to 11.952 billion yuan, commercial and urban space revenue rose 7.9% to 6.205 billion yuan, and AIoT and BPaaS revenue fell 10.1% to 956 million yuan. Residential property, still the core, generated 10.944 billion yuan in revenue, up 6.5%, accounting for 57.3% of total revenue, with a gross margin of 12.9%. The company proactively exited low-margin, low-recovery, or unsustainable residential projects. In B2B operations, it terminated 16 projects with contract value of 57 million yuan.

He Shuhua noted that the property industry's rapid growth over two decades had masked issues like slim margins, high management difficulty, and mismatched service standards. Orderly exits allow resources to be reallocated to better projects, ensuring service continuity during transition. The company reports exits to government authorities and notifies owners of contract status, reasons, timelines, and handover plans.

The performance announcement shows that revenue from developer-related businesses fell 27% year-on-year in the first half, dropping from 23.7% of total revenue four years ago to 5.1%. Related-party transaction revenue accounted for 4.3% of the total, down 30%. Trade receivables from related parties were 1.77 billion yuan at the end of June, down 290 million yuan from the end of 2025. Developer business gross profit decreased by 136 million yuan. Chief Financial Officer Wang Xubin stated that this is an active strategic adjustment, not a passive retreat. "The downward pressure on developer business is essentially a cost of our structural transition. Excluding developer business and one-off factors, our true operating capability is improving," he said. Developer-related risks are clearing, with gross receivables falling 20.5% and net receivables dropping 50.6%, far exceeding the overall decline in accounts receivable.

Non-Developer Revenue Surpasses 90%

In the first half, non-developer business revenue reached 18.13 billion yuan, an 8% increase, accounting for over 90% of total revenue. Gross profit from this segment rose by 62 million yuan. Onewo stated that market-driven growth and internal efficiency are compensating for the decline in developer business gross profit, narrowing the "scissors gap." The company signed 207 new residential projects, with annualized saturated revenue of 840 million yuan. Of these, 63.5% were from existing projects, with a bid-win rate of 85%, up 11 percentage points year-on-year. In the non-residential market, property and facility management revenue grew 8.9% to 5.63 billion yuan.

By the end of June, the number of Onewo's "Butterfly City" bases increased to 708. Services related to residential and property assets also grew. Living-related asset services revenue rose 5.2% to 900 million yuan, with gross profit up 9.5% to 210 million yuan. The Pulin second-hand housing service achieved new contract performance of 190 million yuan, with 6,429 transactions closed, a 10% increase. Its market share in managed projects rose to 18.06%, up 1.73 percentage points from 2025. In renovation services, Yanxuanjia saw 59.65% of leads from property channels. In building repair, standardized product replication drove revenue to 313 million yuan, a 45.3% jump. The Shanghai Binjiang Wanqianhui commercial space, reorganized in May, now attracts 17,000 to 18,000 daily visitors, with daily sales exceeding 300,000 yuan and monthly sales per square meter of about 1,000 yuan.

Wang Xubin indicated that future growth relies on three capabilities: Butterfly City transformation, LingShi (AI brain for real estate) delivery, and AI-driven efficiency. In the first half of 2026, AI efficiency improvements reduced administrative expenses by 43.04 million yuan, a 4.9% decrease, bringing them to 4.4% of revenue, down 0.5 percentage points. LingShi has entered the commercial verification phase, with 1,339 units leased and 472 delivered by the end of June, averaging 16.7 days per delivery. Management noted that the current strategic focus for LingShi is not short-term revenue but completing its transformation from an internal efficiency tool to an external commercial space technology product, laying the foundation for replicable capabilities.