30% down payment, Dexin Service executives buy the dip in their core assets

Text / Leju Finance Xu Jiumian

On February 23, 2026, DeXin Service Group (02215.HK) announced a capital increase, bringing a quiet transfer of power into the spotlight.

This was no ordinary external financing for a group.

Instead of a secondary market takeover or a leveraged buyout, it was a capital operation led by two of the company’s executive directors, utilizing a clever employee shareholding platform, combined with an installment payment agreement, gradually gaining control of the core subsidiary of this listed property company.

In an industry where property-related parties are generally burdened, and valuations are at a low point, is this “management bottom-fishing” a confidence redemption or a carefully designed asset isolation?

Installment Payments and Control Transfer

According to the announcement, this carefully planned capital increase is divided into two phases: the “initial round” and the “main round.”

On September 15, 2025, just three days after its establishment, Deqing Kaisi Bo signed a preliminary capital increase agreement with the target company, DeXin Shengquan Property. At that time, the former invested 10.3 million yuan to subscribe for about 4.9% of the latter’s equity.

Deqing Kaisi Bo is officially Deqing Kaisi Bo Enterprise Management Partnership (Limited Partnership). Initially, it was owned by DeXin Shengquan Property Service Co., Ltd. Union (referred to as “Shengquan Union”), Tang Junjie, Zheng Peng, and Liu Yibing, holding 66%, 17%, 8.5%, and 8.5%, respectively.

The last three are core executives of DeXin Service Group: Tang Junjie is an Executive Director and President; Zheng Peng is an Executive Director and CFO; Liu Yibing is a Managing Vice President.

DeXin Shengquan Property, officially DeXin Shengquan Property Service Co., Ltd., is the group’s core operating entity. As of mid-2025, it managed approximately 38.3 million square meters, aligning with the data presented in DeXin Service Group’s mid-year 2025 performance report.

At that time, few paid attention to this capital increase—employee shareholding, team incentives, routine operations. But five months later, a second, larger-scale capital increase followed. Deqing Kaisi Bo invested about 96.7 million yuan, acquiring approximately 30% of DeXin Shengquan Property after expansion.

After these two rounds, the ownership structure of DeXin Shengquan Property was fundamentally reversed: DeXin Service Group’s combined holdings through Shengquan Technology and Zhida Xiaorui were diluted to about 65.1%, while Deqing Kaisi Bo’s stake surged to 34.9%.

More critically, during this period, the internal ownership structure of Deqing Kaisi Bo also subtly changed. Shengquan Union’s shareholding plummeted from 66% to 6.17%, while Tang Junjie’s stake soared to 46.91%, with Zheng Peng and Liu Yibing each holding 23.46%.

This means Tang and Zheng together hold over 70% of Deqing Kaisi Bo’s equity, becoming the true protagonists in this core subsidiary’s share increase.

Even more intriguing is the payment method for the capital increase. Whether the initial 10.3 million yuan or the nearly 97 million yuan in the main round, both used installment payments.

According to the announcement, the remaining 43.1% of the initial round’s payment is due by the end of 2026; in the second round, about 43.1% (around 4.17 million yuan) can even be deferred until December 31, 2027.

The announcement explained this was to “avoid immediate cash pressure on Deqing Kaisi Bo” and complies with China’s five-year statutory limit.

However, this “pay first, then top-up” approach is rare in major equity transactions involving listed companies, making this shareholding increase seem more like a highly leveraged management buyout.

Confidence Vote or Asset Isolation

Even with installment payments, management’s willingness to put real money into increasing their stake appears, on the surface, to reflect strong confidence in the company’s future development. But considering DeXin Service Group’s fundamentals, this confidence seems to require more support.

Data shows that in 2024, DeXin Service Group achieved revenue of about 933 million yuan, down 2.3% year-on-year; gross profit was approximately 187 million yuan, down 17%; gross margin was 20.1%, down 3.6 percentage points; net profit was 37.7 million yuan, down 39.7%.

Entering 2025, performance did not improve.

In the first half of 2025, revenue was 443 million yuan, down 6.39%; gross profit was 94.4 million yuan, down 7%; gross margin was 21.3%, down 0.2 percentage points; net profit attributable to shareholders was about 34.14 million yuan, down 19.04%.

During the same period, managed area was about 38.3 million square meters, a 3.2% decrease from the same period in 2024.

As a property company deeply branded as “DeXin,” it is difficult for DeXin Service Group to escape the impact of the real estate downturn.

Market sentiment is honest. As of February 25, 2026, DeXin Service’s stock closed at HKD 0.265, up 1.92% that day, with a trailing twelve months P/E ratio of 7.37x, and a total market cap of about HKD 239 million.

Against the backdrop of the parent company’s shrinking value in the Hong Kong stock market, the two executive directors chose not to increase their holdings through the secondary market but instead used private placements of core subsidiary shares. The underlying logic behind this warrants reflection.

Some analysts suggest that increasing holdings via subsidiary shares can bypass the undervaluation of the listed company, directly locking in future returns of the best assets; additionally, using an employee shareholding platform can avoid triggering mandatory general offers.

Another key point of this capital increase is the valuation.

The latest round’s subscription amount was about 96.9 million yuan, corresponding to a 30% stake in DeXin Shengquan Property. Based on this, the company’s overall valuation is pushed to about 323 million yuan, a roughly 30.3% premium over the independent valuation firm Aiwadi’s estimate of about 248 million yuan as of November 30, 2025.

While DeXin Service Group, as the listed entity, has a market value of just over HKD 200 million, its core operational subsidiary was internally valued at 323 million yuan. This “mother weaker than daughter” valuation inversion reflects either the market’s abandonment of the property background of the parent or management’s clever financial techniques to isolate and protect core assets.

利益博弈的拷问

Supporting this premium is likely a grand “technology empowerment” story.

According to the announcement, the net proceeds from this round—about 96.2 million yuan—will be strictly used for a series of technological innovation projects: including procurement of security patrol robots, cleaning and disinfection robots, delivery service robots, and development of intelligent security and energy management systems.

This undoubtedly paints a rosy picture for shareholders—introducing AI and robotics solutions to reduce labor costs, improve operational efficiency, and ultimately achieve cost reduction and efficiency gains.

DeXin Service Group detailed its funding allocation plans across five areas: security upgrades, market expansion, facility operations, sanitation, and customer experience, extending even to 2030.

However, this story also raises significant questions.

On one hand, in an industry with thin profit margins, how long is the return cycle for large-scale capital expenditure on robots? On the other hand, the announcement mentions some funds will be used for “market layout optimization and business scale expansion,” indicating that, alongside technological investment, the company is not abandoning traditional scale expansion, which also requires significant spending in the current saturated market.

Furthermore, with Deqing Kaisi Bo’s stake rising to 34.9%, an unavoidable question emerges: where are the boundaries of the listed company’s core assets?

According to listing rules, since Tang Junjie and Zheng Peng together hold about 70.4% of Deqing Kaisi Bo, it constitutes a related party.

Although both capital increases are characterized as “deemed sales” and accounted for as equity transactions (without recognizing any profit or loss in the income statement), in essence, this is equivalent to two directors of the listed company, through installment payments, purchasing core subsidiary shares at a low price from the listed company.

DeXin Service Group emphasized in the announcement that this move is to “benefit the target group’s employees” and “strengthen employee retention.” But when the ultimate beneficiaries of “benefiting employees” are mainly the two executive directors, this rationale seems somewhat unconvincing.

Although Tang Junjie and Zheng Peng waived voting rights on relevant board resolutions, for minority shareholders, this is undoubtedly a severe test of interests.

In the current deep adjustment phase of the real estate and property industries, this capital increase by DeXin Service can be seen as a high-stakes gamble. Can the fundamental logic of property management be reshaped through technology? Can the core team lead the company through the cycle?

Whether this nearly 100 million yuan installment payment will ultimately translate into tangible performance returns or merely be a victory of financial engineering remains to be seen.