This article**: Times Finance Author: Lin Xinlin
In the past two years, the property management industry has ushered in a first-class adjustment, and the value of the sector has been reshaped. After the big waves, the enterprises with core competitiveness are still strong.
In December 2020, China Resources Vientiane Life (01209HK) successfully landed on the main board of the Hong Kong Stock Exchange and officially embarked on the journey of capital. Today, CR Vientiane Life has been on the market for three years. After three years of turbulence, the market competition pattern, capital evaluation logic, and service boundaries of China's property management rivers and lakes have undergone tremendous changes, and many players have walked off the table with a sigh.
After bidding farewell to savage growth, the property management industry has returned to the essence of service. CR Vientiane Life, which ranks first in the market value of listed property management companies, has interpreted a sample of high-quality growth with a unique business model.
Make every effort to move forward to a world-class enterprise. "The goal of CR Vientiane Life is not only to be the first echelon of the domestic property management industry, but also to pursue and present more possibilities under the new blueprint.
The game of the able: The P/E ratio remains above 20 times
The three years of CR Vientiane's life in the capital market are also the three years of overcoming obstacles in the entire industry.
In 2020, 18 property companies, including CR Vientiane Life, landed in the capital market, setting a record high in the number of annual listings in the property management industry. A year later, the number of newly submitted property management enterprises was as high as 36, and the property management industry ushered in the first year of the era.
At that time, with its asset-light model and stable cash flow, the property management industry became the darling of the capital market. In the first half of 2021, the total market value of 46 listed property management companies exceeded one trillion yuan, and the average price-earnings ratio exceeded 40 times.
However, as the real estate industry enters the adjustment cycle, the coldness of capital is coming. Since July 2021, listed property management companies have been on a roller coaster ride in the capital market, with stock prices accelerating and the industry ushering in a new cycle of valuation reshaping.
According to Choice data, as of October 31, 2022, the valuation of property stocks fell to an all-time low, and the average price-to-earnings ratio of 61 listed property companies was only 844 times;The market capitalization of the sector also reached its lowest point of 26137.4 billion yuan, trillion market value is no more.
Although the performance of property management companies in the capital market is still weak under the policy stimulus since then, Everbright ** Research Report pointed out that from the beginning of 2023 to October 31, 2023, the average share price of key property companies rose and fell by -365%, the plate is in the stage of deep adjustment.
The trend chart of the stock price of China Resources Vientiane Life in the past three years with the Hang Seng Index and the Hang Seng Tube Index, data**: choice
Under the industry**, the share price of China Resources Vientiane Life also fluctuated slightly in the short term, but it was still stronger than many peers. In this wave of reshuffle, China Resources Vientiane Life has also achieved a reversal in market value.
According to the statistics of Times Finance, there are only 6 property management companies with a market value of more than HK$10 billion, a decrease of 5 from the peak in 2021. In the remaining 10 billion market value camp, there are even leading companies with a market value of 80% compared with the peak, and the market value of China Resources Vientiane Life is basically the same as that at the beginning of the listing, and it has been close to 100 billion since the beginning of this year, ranking first in the market value list of listed property companies. In addition, the current price-to-earnings ratio of CR Vientiane Life is basically stable at more than 20 times, and it is still a star stock in the eyes of investors.
Top 10 capital performance of the property management industry, data**: choice (statistics on December 8, 2023**).
In less than one year since its listing, CR Mixc Life was included as a constituent stock of the Hong Kong Hang Seng Composite Index and the Hang Seng Real Industry Services and Management IndexIn 2022, CR Mixc Life was included in the Hong Kong Hang Seng Index Constituent Stocks, the HSI ESG Enhanced Index and the HSI ESG Enhanced Select Index, demonstrating excellent growth and long-term investment value.
Although the valuation model of capital for property stocks has changed, the industry attributes of weak cycle, low risk and good growth have not changed, and the value of high-quality targets has been further demonstrated. While many property management companies are dragged down by real estate parent companies, CR Vientiane Life maintains good fundamentals with a two-wheel drive operation model.
Since its listing, the performance of CR Vientiane Life has grown rapidly and entered the camp of 10 billion yuan in revenue. According to the statistics of Times Finance, in the past three years, the average annual compound growth rate of operating income and core net profit of China Resources Vientiane Life is about %. For investors, under the new evaluation system, the valuation of CR Vientiane Life is not "discounted", and the certainty of its revenue growth and the sustainability of model development still exist.
In addition, as the capital market gradually incorporates sustainable development into investment decision-making, CR Vientiane Life has long integrated ESG concepts into its corporate strategy.
Since the beginning of this year, CR Vientiane Life has continued to promote the systematic, systematic and standardized development of ESG work, and integrate the concept of sustainability into its business. In March, the Board of Directors of CR Mixc Life established a Sustainable Development Committee to promote the improvement of corporate governance capabilities in terms of organizational structure. In terms of specific actions, the "dual carbon strategy" of CR Mixc Life has been implemented in shopping malls and office buildings, such as Rizhao Mixc, Zhengzhou Mixc, Nanchang Mixc, etc., have started photovoltaic construction, and Wuxi MixC has also started project approval. If the construction of the above-mentioned photovoltaic system is completed, it is expected that a total of 9 million kWh of green power will be added to create a real low-carbon and energy-saving benchmark project.
Ballast 100 shopping malls to output stable cash flow
The valuation given by the capital market to CR Vientiane Life is closely related to its excellent profitability, brand influence and leading business model of commercial complexes.
CR Vientiane Life is not simply a property management company, it is also the No. 1 brand of commercial operation and management in China. Since the opening of the first MixC in Shenzhen in 2004 and the first shopping mall membership service system, CR Mixc Life has opened the era of high-end commercial shopping malls in China, and gradually incubated the three core brands of "The Mixc", "The Mixc" and "The Mixc".
Since its listing, despite the complex and profound changes in the domestic economic consumption environment, the commercial operation business territory of CR Vientiane Life has maintained rapid expansion, with a total of 43 new shopping malls opened in the past three years, with an average of nearly 14 new malls opened every year.
With the opening of Kunming MixC on December 24, the largest urban renewal project in the region has been renewed, and the number of shopping malls operated by CR Mixc has also reached the milestone of 100.
Among them, the number of luxury shopping malls has increased to 13, ranking first in the industry, expanding the leading edge of the commercial high-end market.
Lanzhou MixC is one of the luxury shopping malls that will land in 2023, and it is the first high-end commercial complex in Gansu Province that integrates first-line luxury brands, trendy fashion brands, multi-scene restaurants, and high-end boutique supermarkets. Affected by the epidemic, the consumer market in Lanzhou faced great challenges during the incubation of the project, but with the strong brand appeal of CR Mixc Life, 88 brands landed in Lanzhou for the first time, which not only promoted the upgrading of the business district where the project is located, but also met the diversified consumption needs of local citizens.
A good business is enough to change a city. Since the opening of Lanzhou MixC, the traffic and popularity have refreshed the northwest business. Up to now, the passenger flow of Lanzhou MixC has exceeded 12 million, the retail sales have exceeded 1.3 billion yuan, and the number of members has exceeded 300,000. Among them, July and August ushered in the peak of summer consumption, during which the passenger flow reached 3.5 million, and the sales during the period exceeded 3400 million yuan. In addition, on the opening day of Lanzhou MixC Metro Line 1 ushered in the peak traffic since its opening, effectively revitalizing the subway connection business in the region.
As the first third-party luxury project of CR Mixc Life, the successful landing of Lanzhou MixC also represents a new level of light asset management capability of CR Mixc Life.
Since 2021, CR Vientiane Life has opened the door to business management and business expansion, expanding from "serving the parent company" to "serving external owners", and exporting the business management capabilities that have been accumulated for many years. In the three years since its listing, CR Mixc has acquired a total of 39 commercial expansion projects, of which 14 new asset-light expansion projects have been signed in 2023, all of which are large-scale TOD projects in first- and second-tier cities.
CR Mixc's excellent operation and management capabilities have attracted a number of partners who are interested in business.
Generally speaking, the owner wants us to make the project beautiful and delicious, that is, both quality and income. Wang Xiaohu, general manager of the commercial investment and development department of China Resources Vientiane Life, believes that this comes from the company's more than 20 years of business management experience, mature and standardized business process system and full-chain capabilities, deep brand and member resource reserves, and rigorous and professional business management team.
At present, CR Vientiane Life has signed contracts with nearly 6,000 international and domestic high-quality tenants and more than 115 international luxury brands. Taking the French luxury brand Hermès as an example, the brand has only 17 stores in China, of which 6 stores are located in the shopping center of CR Vientiane Life, accounting for 35%.while Hong Kong-funded shopping malls such as Hang Lung and Swire have 3 or less.
After China Resources Vientiane Life took over, the business outlook of many existing projects has also been significantly improved. For example, after the renovation of Zhongshan Shiqi Vientiane City, the average monthly rent and monthly retail sales have increased by %.The Zhuhai Utehui project achieved a 15% increase in rent efficiency and a 22% increase in average monthly membership, and its performance stopped falling and stabilizedOne year after Xiamen Panji Center took over the full operation of CR Mixc Life, the membership scale increased by 35% and the number of member consumers increased by 124% year-on-year.
This year, CR Vientiane Life also reached a strategic cooperation with Western Airport Group to lock in the commercial operation project of Xi'an Airport and open up a new track for commercial asset-light output.
Among the more than 250 airports in the country, none of the airports are operated by external professional business management teams, but in fact, the airport business has a lot to offer. Wang Xiaohu believes that the airport scene has the characteristics of large passenger flow, strong customer consumption power and high brand level, which has a certain match with the commercial capabilities of China Resources Vientiane Life, "I hope to build Xi'an Airport business into an industry model." ”
Despite the remarkable results, CR Mixc Life has maintained a cautious attitude towards the expansion of commercial asset-light projects and insisted on quality scale expansion. "We gave up a lot more projects in a year than we signed up. What we practice is to do and become one. Wang Xiaohu said frankly to Times Finance.
Performance of NOI-related indicators in the past three years, data**: corporate financial reports.
Since the first year of listing, the annual retail sales of CR Vientiane Life Operation Shopping Center have stood at the level of 100 billion yuan. Today, the retail sales of 74 projects in CR Vientiane Life Camp projects rank among the top three in the local market, accounting for 841%；The average occupancy rate of all projects in operation remained at a high level of 96%.
The performance of all aspects of the project has improved, and the owners are more willing to "pay" for the management of lean operations. Times Finance combed through the financial report and learned that even in the case of rent reduction and exemption for tenants during the epidemic, the average annual compound growth rate of revenue of China Resources Vientiane Life Shopping Center in the past three years still reached 11%. In the first half of this year, the gross profit margin of this segment reached 718%, which is an important support for the company's profitabilityAmong the key indicators to measure the quality of business operations, CR Vientiane Life recorded a growth of nearly 80% in NOI to 7.1 billion yuan, and the NOI margin increased by 9%.4 percent to 672%。
Commercial property has always been characterized by fast revenue growth, high profits and strong stability. In 2023, the domestic consumer market will recover significantly, and the high growth of CR Vientiane's life and commercial management sector is expected to continue to be released.
The scale ranks among the first echelon, and it is also necessary to be the "housekeeper" of the city
According to the China Property Management Association, it is expected that by the end of 2023, the revenue of China's property management industry will reach 169 trillion yuan, the total management area will reach about 39.1 billion square meters, and the scale is still the driving force for the development of property service enterprises.
In the past three years, CR Vientiane Life has grown rapidly in terms of scale under management and ranked among the first echelon of the industry. As of mid-2023, the total contracted area of CR Vientiane Life is 3800 million square meters, with a total area under management of 32.5 billion sq m, an increase of 153% and 189% respectively from the end of 2020 when it was listed.
In addition, according to the monthly data of China's property service enterprises of the China Index Research Institute, since the second half of the year, the scale of new contract area in a single month of China Resources Vientiane Life has basically remained in the top four in the industryFrom July to November, a total of 38.54 million square meters were added, which means that the total contract area has exceeded 400 million square meters.
CR Vientiane Life has maintained a leap in scale in the past three years, which is closely related to its precise M&A strategy. In 2022, it acquired Yuzhou Property, Zhongnan Service and Sichuan JiuzhouIn August 2023, we will join hands with Longi Life Services to achieve another high-quality M&A.
At present, CR Vientiane Life has completed the management integration of Zhongnan Service and Yuzhou Property. Due to the further release of the synergistic scale effect of M&A projects and the improvement of the level of refined property management, the management and sales expense ratio of CR Mixc Life Company decreased by 1% year-on-year in the first half of the year1 percentage point to 80%；The gross profit margin of the overall basic property management has also increased significantly from single digits to the current level of 20% after listing.
In addition to mergers and acquisitions, CR Vientiane Life has carried out independent market-oriented external expansion through bidding, direct expansion, joint ventures and cooperation, etc., from the former internal allocation type to market-oriented growth, showing a high degree of independence and growth expectations to the capital.
In the second year of listing, the proportion of third-party area in the total contracted area of CR Vientiane Life Property Management exceeded 50% in one fell swoopIn the first half of 2023, the proportion further increased to 616%, an increase of more than 30 percentage points from the beginning of listing.
Proportion of contract area in the past three years, data**: corporate financial reports.
According to statistics, in the first 11 months of this year, the cumulative new contract area of CR Vientiane Life exceeded 70 million square meters, of which the area from third-party expansion accounted for 80%, and its independence was ahead of its peers.
According to CR Vientiane Life, about 65% of the property management projects expanded this year are from the initiative of partners. "CR Vientiane Life has high-quality, strict service capabilities, and adheres to the red line management in terms of safety production and operation quality, so it has also won the trust of customers, which has always been our greatest advantage. Wan Zihan, deputy general manager of the investment and development department of China Resources Vientiane Life Property, said.
In order to meet the scale expansion, property enterprises are shifting their focus to the stock market on the one hand, and on the other hand, they are also seeking new development opportunities by increasing the diversified customer matrix and expanding the scope of services.
Focusing on the operation of community assets, CR Mixc Life has deepened the community value-added service track and expanded the service boundary to rental and sales, decoration, occupancy, housekeeping, etc. According to statistics, since 2021, the annual revenue growth rate of CR Vientiane Life Community value-added services has reached more than 70%, and its contribution to the property management sector has increased from 388% to double digits.
From the community to the broader urban dimension, CR Vientiane Life has also found another growth pole. In the first half of the year, 84% of the new third-party contract area was from urban public spaceIn addition, according to CRIC data, since the second half of the year, the amount of service in the bidding city of China Resources Vientiane has been among the best.
CR Vientiane Life has also been promoted from a community housekeeper to an urban housekeeper to help the city renew and upgrade. In July this year, China Resources Vientiane Life officially entered the "strongest street in the universe" Shenzhen Yuehai Street, providing operation services for the southern headquarters of Northern Bank, Nanshan Foreign Chinese School (Group) Dachong School, Shenzhen Vientiane Tiandi, Runfu, blocks, etc., realizing 238 square kilometers of property services cover the whole area, rejuvenating the new style of a modern city.
The large-scale events and exhibition service capabilities of CR Vientiane Life have also been verified in important events such as the Chengdu Universiade, the Hangzhou Asian Games, and the Chengdu World Science Fiction Convention.
On October 22, the 81st World Science Fiction Convention came to an end in Chengdu. Behind the scenes of the event is the Vientiane service presented by the only property insurance party, China Resources Vientiane Life, from the dredging of the drainage pipe on the main floor of the venue, the operation of the network data room, to the reception of nearly 40 conferences per day, and the investment of the catering area of the Science Fiction Museum, all of which reflect the quality of service.
Relying on the leading position and high-quality resources of each business, we have been able to quickly expand the depth of the industry, explore business innovation models, and accumulate more diversified and richer experience through undertaking large-scale projects, so as to build a more comprehensive light asset management system and operational capabilities. Wan Zihan said.
CR Vientiane Life is penetrating into every texture and capillary of the city to provide more high-quality services for urban space. Its expansion capabilities, service strength, and brand potential energy will all create space for its high-quality growth.