All of a sudden, it was like a spring breeze blowing overnight, and the listing boom of property management companies was raised again.

China Resources Land, who just announced the property listing plan at the interim results meeting on August 26, China Resources Mixc Lifestyle Services, a subsidiary, submitted a prospectus to the Hong Kong Stock Exchange five days later, and it took only five days to submit the prospectus. In addition to China Resources Land split property management listed, China Evergrande Group, Sunshine City, Rongchuang and other head housing enterprises have also made it clear that the spin-off property management company will be listed.

The phenomenon of property management listed in a pile has also attracted the attention of the outside world: why have property management companies repeatedly set off an upsurge of listing since this year?

Zhitong Finance and Economics APP observed that there are two main factors supporting it: on the one hand, after the public health incident, the property management sector highlights the advantages of high risk resistance and high growth by virtue of the attributes of domestic demand and the type of consumption that must be selected, so as to enhance the industry status and market recognition of property management services. On the other hand, since August, the financing control of real estate enterprises has been tightened, and the listing of split subsidiary companies can increase the net assets of the parent company and improve the debt index, which also adds new reasons for the listing of real estate enterprise split property management companies.

Against this background, it is no wonder that China Resources Land did it so quickly. Next, we might as well take a look at China Resources Mixc Lifestyle Services's true level through the prospectus.

Leaning against the big tree, the market scale is on the rise.

It is understood that China Resources Mixc Lifestyle Services was officially established in 2017, the main business includes residential property management services, commercial operations and property management services, behind the "big boss" is China Resources Group and China Resources Land-China Resources Land directly hold a 100% stake in the company, while China Resources Group directly holds a 59.55% stake.

Under the synergistic effect of China Resources Group and China Resources Land, China Resources Mixc Lifestyle Services became a "top student" in the industry in just a few years.

From the perspective of the area in charge, China Resources Mixc Lifestyle Services seems to be in the upper-middle level of the industry. Up to now, China Resources Mixc Lifestyle Services provides property management services with a residential and commercial building area of about 107 million square meters, covering 62 cities in 27 provincial administrative regions across the country, of which 78% of the residential properties and 76% of the commercial properties under management are located in first-and second-tier cities.

Specifically, the residential property section manages 502 residential and other property projects with an area of about 97.5 million square meters under management. The commercial property section provides commercial operation services to 51 shopping centers with a total floor area of about 5.6 million square meters, property management services to 31 shopping centers with a total floor area of 4 million square meters, and property management services to 73 office buildings with a total floor area of 5.1 million square meters.

Zhitong Financial APP from the income level, China Resources Mixc Lifestyle Services's income scale is also relatively large. It ranks fifth in terms of the property management service income of all property management companies in China in 2019 and second in terms of the property management service income of all shopping center operation service providers in China in 2019.

According to the prospectus, from 2017 to 2019, China Resources Mixc Lifestyle Services achieved income of 3.129 billion yuan, 4.432 billion yuan and 5.868 billion yuan respectively, while profits for the same period were 388 million yuan, 423 million yuan and 365 million yuan respectively. In the first half of 2020, its income was 3.134 billion yuan and its profit was 338 million yuan.

However, although the market volume and income scale are the leaders in the industry, what is worrying is that the rapid rise of China Resources Mixc Lifestyle Services is mainly from the resource tilt of China Resources Group and China Resources Land.

According to the prospectus, China Resources Group and China Resources Land are the two major customers of China Resources Vientiane, accounting for 32.2%, 32.3% and 36.0% of the total income from 2018 to the first half of 2020, respectively. Among them, the income generated by China Resources Mixc Lifestyle Services's residential property management services provided by China Resources Group and China Resources Land accounts for 89.7%, 84.4% and 85.2% of the total income of the residential property division.

In addition, China Resources Mixc Lifestyle Services manages 502 residential and other property projects with a total construction area of 97.498 million square meters, of which 405 projects come from China Resources Group and China Resources Land, with a management area of 79.554 million square meters, accounting for 81.5%. Third-party properties accounted for 18.5%.

Generally speaking, it is a good thing to have a parent company that can transport resources, which is conducive to the rapid formation of scale and brand effect of subsidiaries. At the same time, China Resources Real Estate has maintained steady growth in the past few years, with a land reserve of 71.09 million square meters as of June 30, 2020. the above factors are also a rare boost to China Resources Mixc Lifestyle Services's future increment.

At present, whether China Resources Mixc Lifestyle Services can be stable by virtue of his own strength in the increasingly competitive property industry is also a point of concern in the market.

Business operation service comes later, reversing the stereotype of low gross margin

Property management company gross profit margin is low is the tacit consensus of the property industry, which China Resources Mixc Lifestyle Services seems to be unavoidable.

According to the prospectus, China Resources Mixc Lifestyle Services's gross profit margin from 2017 to 2019 was 13%, 15% and 16.1% respectively. Although it is increasing year by year, the gross profit margin in the past three years is lower than the average gross profit margin of the property management industry of Hong Kong stocks listed in the same period.

However, surprisingly, the company recorded a sharp increase in gross profit margin of 24.1% in the first half of 2020, reversing the "stereotype" of low gross margin. At the same time, China Resources Mixc Lifestyle Services's gross profit also increased significantly. From 2017 to 2019, the gross profit was 407 million yuan, 665 million yuan and 942 million yuan respectively. In the first half of 2020, gross profit increased to 755 million yuan.

With regard to the substantial increase in gross margin and gross profit margin, China Resources Mixc Lifestyle Services pointed out in his prospectus that the growth of gross profit was mainly due to the expansion of business scale and the improvement of cost control ability. the increase in gross profit margin is mainly due to the increase in revenue contributed by the business operation and property management services division.

From the perspective of specific business, the income of China Resources Mixc Lifestyle Services's two property forms is gradually approaching. From 2017 to 2019, the income from residential property management services was 2.101 billion yuan, 2.763 billion yuan and 3.472 billion yuan respectively, accounting for 67.1%, 62.4% and 59.2% of the total income respectively, while the income from commercial operation and property management services was 1.029 billion yuan, 1.668 billion yuan and 2.397 billion yuan respectively, rising from 32.9% to 40.8%.

With the formal introduction of "business operation services" into the business sector of business operations and property management services in January this year, the income gap between the two is even smaller.

In the first half of this year, the income of its residential property management services was 1.68 billion yuan, accounting for 53.6% of the income, while the income of commercial operation and property management services was 1.453 billion yuan, accounting for 46.4% of the total income. Among them, commercial operation services contributed nearly 300 million yuan of income.

According to Zhitong Financial APP, "business operation service" mainly includes pre-opening management and operation management services of shopping malls. The addition of this service also means that China Resources Vientiane is gradually improving its profitability in many ways based on its own understanding.

In addition, it is worth mentioning that in order to continue to raise the level of gross profit margin, China Resources Mixc Lifestyle Services also made drastic changes-some property services from the contract system to the remuneration system.

According to China Resources Mixc Lifestyle Services, it will continue to adopt a contract system in the management of residential and other properties as well as office buildings, and the income model for property management services in shopping malls will be changed to a remuneration system from the second half of 2020. You know, contracting has always been one of the factors dragging down the company's low gross profit margin, and this shift has found another way to raise the gross profit margin level for the company.

Based on the substantial increase in gross profit margin and market space, most investors in the industry are optimistic about the future development of China Resources Mixc Lifestyle Services.

Zhitong Financial APP observed that in recent years, the policy of the property management industry has gradually changed from the standard type to the encouraging type, with rapid development: by the end of 2018, the national property management area has reached 21.1 billion square meters. In the short term, with the inflection point of upstream real estate completion, the area to be completed in the past two years is expected to be released, and the next 1-2 years will enter a period of scale explosion. In the long run, driven by urbanization, population growth, per capita living space and other factors, the industry is expected to enter a golden era, with a management area of 32.6 billion square meters and an income of more than 2 trillion yuan.

On the whole, apart from worrying about over-reliance on the parent company's "blood transfusion", China Resources Mixc Lifestyle Services's market size and the gradual increase in gross profit margin are commendable. After all, under the blue sea of the trillion space market, the strong Hengqiang's Matthew effect is expected to drive it to further increase its market share.