In terms of scale and revenue growth, the total volume of the property industry slowed in the first half of 2023. Capital market performance, a number of property enterprises submitted IPO, the capital market heat has warmed up.

On August 25th, Shenye property Operation Group Co., Ltd. (hereinafter referred to as: Shenye property) once again submitted its listing application to the main board of the Hong Kong Stock Exchange, with China International Capital Corporation, CITIC and Jianyin International as its sponsors. It is reported that the company submitted an application for listing on the main board of the Hong Kong Stock Exchange on February 24, 2023. This "second entry into the palace", can Shenye property IPO smoothly?

The revenue of deep ploughing Dawan area shows an increasing trend.

Shenye property ploughs the Dawan area, and its footprint is constantly covering the Chinese market. As of June 30, 2023, the Division has a total contracted construction area of about 75.6 million square meters, a total of 480 projects under management, and a total construction area of about 71.8 million square meters, covering 47 cities and 14 provinces in China.

With the continuous expansion of the construction area in charge, the revenue of Shenye property continues to increase. In the first half of 2023 (hereinafter referred to as: during the reporting period), the operating income of Shenye property is about 1.838 billion yuan (unit: RMB, the same below), 2.152 billion yuan, 2.348 billion yuan, 1.284 billion yuan respectively. Inferred from the performance data in the first half of this year, the annual growth rate of Shenye property may maintain the same level.

Of course, this is related to the general environment, affected by the regulation and control of real estate, the operation of property enterprises has also been affected to a certain extent, taking a comprehensive view of the reported property enterprises, nearly 1/3 showed a decline in year-on-year growth.

Data show that from 2018 to 2022, the total income of China's all-industry property management, commercial operation and urban service market increased from 567.1 billion yuan to 870.1 billion yuan, with a compound annual growth rate of 11.3 percent. Since 2022. According to the market judgment, the overall market will have a compound annual growth rate of 8.5% in the next five years.

According to the regional division, the Greater Bay area is its core source of income. During the reporting period, the income from the Greater Bay area was 1.297 billion yuan, 1.629 billion yuan, 1.829 billion yuan and 1.025 billion yuan respectively, accounting for 70.6%, 75.7%, 77.9% and 79.9% of the total income in the relevant period, respectively.

In terms of construction area under management, during the reporting period, the total construction area of the company in the Great Bay area was 26.9 million square meters, 37 million square meters, 45.9 million square meters and 49.5 million square meters, accounting for 57.7 percent, 63.0 percent, 67.1 percent and 68.9 percent of the total construction area, respectively. It can be seen that deep ploughing in the Dawan area has achieved remarkable results. However, the regional concentration is too high, which may limit its national expansion.

From the profit point of view, from 2020 to the first half of 2023, the net profit of Shenye property is about 105 million yuan, 75 million yuan, 121 million yuan and 83 million yuan respectively. The gross margin was 278 million yuan, 279 million yuan, 338 million yuan and 202 million yuan respectively, and the gross profit margin was 15.1%, 13.0%, 14.4% and 15.8% respectively. In line with the development trend of the industry.

It is worth noting that the gross profit margin of Shenye property still depends on the pull of related parties. In its prospectus, it made it clear that the gross profit margin of Shenye property for providing services to related parties is higher than that for providing services to independent third parties.

During the reporting period, the gross profit margins for services provided to related parties were 23.0%, 20.2%, 22.0% and 22.9% respectively, and those for services to independent third parties were 9.2%, 8.0%, 9.0% and 11.0%, respectively.

It is gratifying that Shenye property relies on "small profits and quick turnover", and its independence has become increasingly prominent. During the reporting period, the proportion of revenue from independent third parties was 56.5%, 58.7%, 58.5%, 59.0% and 59.9%, respectively.

The prospect of diversified business helping the industry is still to be looked forward to.

The business section of Shenye property can be divided into three parts: city and industrial park services, residential property management services, commercial property operation and management services. As of June 30, 2023, Shenye property Management has 256 city and industrial park projects, 162 residential property management projects and 62 commercial property operation and management projects.

From 2020 to the first half of 2023, the service income of cities and industrial parks increased rapidly, from 643 million yuan in 2020 to 1.02 billion yuan in 2022, becoming the company's largest revenue business, accounting for 43.5% of the total revenue. In the same period, the revenue of residential property management services increased from 714 million yuan in 2020 to 766 million yuan in 2024, and the proportion of revenue decreased from 38.9% to 32.6%. Commercial property operation and management services increased from 481 million yuan in 2020 to 562 million yuan in 2022, and the proportion of revenue decreased from 26.2% to 23.9%. On the whole, the business income of the company is relatively balanced, and there is no over-reliance on a certain item of revenue.

Judging from the performance of the gross profit margin of the three major businesses, during the reporting period, the gross profit margin of city and industrial park services was 7.5%, 8.4%, 11.5% and 12.4% respectively, showing an increasing trend; the gross profit margin of residential property management services was 15.4%, 11.5%, 9.6% and 9.6%, respectively. The gross profit margin of commercial property operation and management services is 25.0%, 23.0%, 26.2% and 30.3%, and the gross profit margin fluctuates greatly.

According to the understanding of Zhitong Financial APP, the rapid expansion of the service scale of Shenye property city and industrial park is inseparable from the expansion of the group of independent third-party property developers.

Five major service series, Shenye business management and Shenye technical support work together to create a rich brand portfolio, combined with high-quality services to accelerate the market expansion of Shenye property. In addition, the company's background of nationalization and extensive use of digital management lay the foundation for business management and the growth of construction projects.

As of June 30, 2023, the company's business management project retention rate was 96.8%, and remained at a high level of more than 90% from 2020 to 2022, indicating that customers have a high degree of trust.

From the perspective of the development scale of the industry, the property management industry has maintained a rapid development trend in 2022, with a total scale of 35.3 billion square meters. With the further development of the real estate market, shopping center operation service market and urban service market, the total income of all-industry property management, commercial operation and urban service market is expected to continue to grow. Total revenue is expected to reach 1.3106 trillion yuan in 2027, with a compound annual growth rate of 8.5 per cent from 2022 to 2027.

In terms of competitive position, the top five state-owned all-industry property management, commercial operation and urban service companies account for about 3.9% of the total revenue of China's all-industry property management, commercial operation and urban service market. In 2022, the company ranked fifth in terms of revenue, accounting for about 0.3% of the total revenue of China's all-industry property management, commercial operation and urban service market. Although the scale is still small, it is backed by SASAC and has deep barriers, which is expected to gain more room for development.