Opinion indexWith the continuous regulation and control of real estate in recent years, property, as an important part of the ecological chain of real estate development, has a high degree of dependence on the parent company, or affected by this, the stock prices of listed property stocks have fluctuated greatly in the past few months.
Despite the recent market worries, spin-off property listing is still an important way for housing enterprises to broaden financing channels, housing enterprises spin-off property listing enthusiasm unabated.
In September, Jinmao property, the property platform of China Jinmao, formally submitted its prospectus to the Hong Kong Stock Exchange. From the perspective of the fundamentals of the enterprise, the total revenue of Jinmao property reached 944 million yuan in 2020, which mainly includes three business lines, namely property management services (including urban operation services), non-owner value-added services and community value-added services.
In 2020, the revenue share of the above three businesses was 60.1%, 31.2% and 8.7%, respectively.
Thus it can be seen that property management services are the main business of Jinmao property, and the profitability of its business affects the company's overall profit to a great extent, while the gross profit margin of Jinmao property's property management services is only 11.1%, 11.9% and 17.8% in the three fiscal years from 2018 to 2020.
Jinmao property is located in high-end property management, and the average property management fee reached a high level of 5.9 yuan per square meter in 2020, but the gross profit margin is still lower than that of Hong Kong property enterprises.
In addition, compared with other listed property enterprises, the scale of Jinmao property is also slightly insufficient.
The intention of business concentration and independent expansion is not obvious.
As a property platform under Jinmao of China, the strong development strength of the parent company has provided a great boost to the growth of Jinmao property business. Jinmao property has grown steadily in the past three fiscal years.
According to the prospectus data, the contract area of Jinmao property and the scale of the area under management continue to grow. The area under management from 2018 to 2020 was 10.223 million square meters, 12.66 million square meters and 17.6515 million square meters, with a corresponding growth rate of 23.84 percent.
9.42%, of which the growth rate of the tube area in 2020 is relatively obvious.
As of March 31, 2021, the area under management has reached 18.15 million square meters, an increase of about 5 million square meters over the end of 2020. Although the scale of Jinmao property has gradually increased in recent years, compared with the industry, the speed of development is still relatively slow.
According to previous research on the opinion index, the average growth rate of the area under management of listed properties in 2020 was 46.35%, and Jinmao property was below the industry average.
In addition, like most property service companies in the market, Jinmao property also has the problem of relying on its parent company and heavy warehousing in a certain area.
Observe that at present, most of the small and medium-sized property service enterprises in the market adopt the strategic strategy of ploughing a certain area, continuously improving the influence of the region, forming a brand effect, and then spreading to the surrounding areas, and so is Jinmao property.
From the perspective of tube area distribution, it can be found that Jinmao property continues to plough deep into East China, and the regional concentration continues to increase. According to the prospectus, the proportion of Jinmao property in eastern China from 2018 to 2020 and March 31, 2021 is about 29.7%, 34%, 45.6% and 47.2%.
As an economically developed region in China, East China has greatly improved the charging level of Jinmao property. Reflected in the property management fee unit price, according to the prospectus data, in the three financial years from 2018 to 2020, the overall average property management fee of Jinmao property is 6.2 yuan / square meter, 5.9 yuan square meter, 5.4 yuan square meter, much higher than the industry average.
On the other hand, the opinion index believes that the winning rate of enterprises can largely reflect the market competitiveness of enterprises, but Jinmao property did not disclose the winning rate in the prospectus.
By observing the changes in the number of property management service contracts of Jinmao property in recent years, it can be inferred that the independent expansion intention of Jinmao property in the past is not obvious.
Jinmao property's main service contracts come from Jinmao property and its affiliated companies. from 2018 to 2020, the number of contracts from affiliated enterprises was 123, 171 and 207, while the number of contracts from third parties in the same period was only 8, 11 and 26. At the same time, the main types of third-party properties of Jinmao property are non-residential properties, which are rarely involved in residential properties developed by other developers.
Corresponding to the same situation in terms of area. According to the data, in 2020, only 12.2% of Jinmao property came from third parties, while 88% came from related parties. Generally speaking, property companies will carry out a series of restructuring and acquisitions to increase the area share of third parties on the eve of listing. Jinmao property has successively acquired five companies from Jinmao of China and Nanjing Ninggao in April 2021, but the results are not reflected in the prospectus.
According to the current data, Jinmao property has a relatively high degree of dependence on related parties. in recent years, due to the continuous regulation and control of the real estate industry, the capital market pays more and more attention to the independent development ability of property companies, while Jinmao property wants to achieve independent development. it's even more challenging.
According to the prospectus, another major income business of Jinmao property is value-added services for non-owners. Specifically, Jinmao property non-owner value-added services cover planning and design, construction, sales and marketing, project delivery and maintenance.
The gross profit margin is lower than that of peers, and the ability of cost control still needs to be improved.
It is worth noting that although it focuses on high-end property management services, the gross profit margin of Jinmao property is on the low side in the industry. According to the prospectus, Jinmao property's comprehensive gross profit margin fell from 20.0% in 2018 to 19.2% in 2019, and then rose to 24.9% in 2020. At the end of the first quarter of 2021, the company's gross profit margin was 25.1%.
According to previous research on the opinion Index, the average gross profit margin of 51 listed property companies in the first half of 2021 was about 30.63%, and the profitability of Jinmao property was lower than the industry average.
One of the reasons is that the gross profit margin of basic property management is on the low side. From 2018 to 2020, the gross profit margin of property management services was 11.1%, 11.9% and 17.8%, respectively, and dropped to 9.3% in the three months ended March 31 this year. According to the Jinmao property prospectus, it is mainly due to the increase in costs caused by the epidemic.
As mentioned above, Jinmao property is positioned as a high-end property management service enterprise, and the collection rate of property management fees has remained above 94% in the past three years. At the same time, the average property management fee of Jinmao property in 2020 is 5.4 yuan / square meter, and the high unit price and low gross profit margin to some extent reflects the lack of cost control ability of Jinmao property.
At the same time, the proportion of income in the community value-added services sector with relatively high gross profit margin showed a downward trend. From 2018 to 2020, the share of revenue in this sector was 10.6%, 9.6% and 8.7%, respectively, and the gross profit margin also fell from 48.6% to 39.6%.
In addition, although Jinmao property is not yet listed, it has begun to "feed back".
According to the prospectus, other income and income of Jinmao property increased by 536.1% from 11.746 million yuan in 2018 to 74.908 million yuan in 2019, of which loan interest income accounted for 85.1% of other income and income in 2020. The substantial increase in this income is mainly due to the fact that Jinmao property used the 2018 loan interest income from asset-backed securities to Jinmao Group at the end of 2018 to drive the growth.
It is worth mentioning that by the end of June, Jinmao's asset-liability ratio excluding advance receipts was 68.92%, net debt ratio was 51.64%, cash short-debt ratio was 1.26 times, and the "three red lines" were all up to standard.
Since 2020, China's Jinmao has taken back its money by selling equity and reduced a lot of leverage. In 2021, according to incomplete statistics, Jinmao sold shares in no less than 7 companies in the first half of the year. Most recently, on August 30, Tianjin Donghui Industrial Co., Ltd., a subsidiary of Jinmao, China, planned to transfer 90% of the shares of Qingdao Fangjia Real Estate Co., Ltd.
In this context, the separate listing of the spin-off property sector can not only solve the problem of tight financing, but also expand business opportunities. After the listing of Jinmao property, we can rely on the rapid development of capital endorsement, and then enhance the overall competitiveness and robustness of China's Jinmao.
Urban service has just started, and profitability is still unknown.
In addition, urban operation service is also one of the bright spots of Jinmao property in the future. According to the prospectus, as of July 31, 2021, Jinmao Group has successfully contracted 30 urban operating projects across the country through cooperation with local governments. Jinmao property has currently entered into preliminary property management contracts for Jinmao Group's 19 urban operating projects.
These projects span new urban areas, urban complexes and characteristic towns, covering a wide range of property types, such as hotels, commercial properties, office buildings, schools, health centres, theatres and smart energy stations, as well as underground spaces and integrated urban management corridors.
Generally speaking, urban service projects are mainly tendered by the government, and most of the projects are entrusted to central enterprises or state-owned enterprises. Although urban service projects are becoming more and more market-oriented in recent years, property enterprises need to have enough experience and qualifications in order to be registered in the "government procurement supplier warehouse", and the follow-up needs to undergo strict screening. Even for strong property enterprises, it is still very difficult to intervene, especially for small and medium-sized enterprises.
At the same time, as the current property enterprises in the field of urban services is still in the exploratory stage, the specific profitability has not been publicly disclosed, but combined with the information publicly disclosed by some property service enterprises in the market, the increase of urban service income does not increase profits.
Take Country Garden Services Holdings as an example, according to the financial report, in 2019 and the first half of 2021, Country Garden Services Holdings's urban service income was 68 million yuan, 884 million yuan and 2.095 billion yuan respectively, which shows that the potential space of the industry is huge.
At the same time, the city service business has also had a certain impact on Country Garden Services Holdings's gross profit margin. In the first half of 2021, Country Garden Services Holdings's overall gross profit margin fell by 3.8 percentage points to about 33.4% from about 37.2% in the same period in 2020. It is mainly due to the influence of occasional factors such as the consolidation of urban services and the cancellation of the social security policy of the epidemic, resulting in a decline in gross profit margin.
Thus it can be seen that despite the great space potential of the urban service industry, the direct profitability of urban services carried out by property enterprises is not ideal at present. The early input of most urban service projects is high and the output is low. For Jinmao property, at present, the development of urban service business will further reduce its profitability.
By observing the recent trends in the property industry, many leading property enterprises have carried out acquisitions, such as the recent acquisition of R & F property by Country Garden Services Holdings and the exchange of all things for Sunshine Zhibo. Because of the strong support of the parent company, it is still unknown whether Jinmao property will be listed as promised or looking for mergers and acquisitions after handing over the table.
Original report | be sensitive to numbers, trace back to the source, and interpret the deep context of real estate. In line, uncover the law of the development of the industry as a whole.