\u3000\u30001. Business management research framework
1) revenue composition: business management usually includes two stages of management: preliminary preparation period and operation period. Rent commission + management fee is the main source of revenue of business management company. Thanks to the main service for b-end customers, the service rate of business management is more market-oriented than that of residential property management, and the price increase depends on the operation and management effect of shopping malls.
2) core logic of commercial operation: the purpose of commercial operation is to generate stable and growing rental income. Business management companies need to maintain the lasting attraction of commercial assets, and constantly attract high-quality merchants + consumers to enter and consume, so as to realize a virtuous circle. Experiential consumption has become an important means of drainage for business management companies. Ingenious operation replaces simple replication to achieve differentiated breakthrough under stock competition.
3) there are structural growth opportunities in the industry, and the industry concentration is expected to continue to improve: 1 Under the total amount logic, the double cycle strategy + the weakening of the epidemic will bring opportunities for the growth of total consumption, and the commercial real estate as a consumption carrier will develop well in the long term. 2. The online impact is weakened, while the functionality of offline shopping centers in terms of experience and social interaction is difficult to replace. 3. Different cities play in different ways. Strong demand in core cities + urban expansion – constantly deriving new business demand – closely following the consumption trend; Limited demand in non core cities – seize the first mover advantage and take the lead in blocking. At present, the Cr5 of the business management market is only 12.7%. We believe that the head business management company will benefit from the development dividend brought by the improvement of industry concentration by building a wide moat in terms of management scale, brand awareness and fine management.
\u3000\u30002. Commonalities of excellent business management companies: horizontally compare Wanda business management, China Resources Vientiane life, Longhu Zhichuang and Baolong business, and further split the influencing factors at both ends of income and cost. We believe that excellent business management companies have the following commonalities:
Commonality 1: affiliated companies + third-party external expansion jointly contribute to the steady improvement of management scale + high contract to management ratio, strong certainty of subsequent growth and continuous consolidation of scale effect.
Commonality 2: it can achieve stable high rental rate + rent growth, which is difficult to replicate in the short term.
Commonality 3: rich brand resources + continuous operation and maintenance of customer resources, forming a competitive barrier in terms of investment attraction ability and customer stickiness.
Commonality 4: Science and technology empowerment management, reduce costs and increase efficiency, continue to use a certain proportion of the funds raised from the listing for continuous science and technology R & D and investment, and realize the continuous iterative upgrading of scientific and technological strength.
\u3000\u30003. Financial analysis: the steady growth of the management scale brings higher income scale and growth expectation; Price increase and effective cost control have led to continuous improvement of profitability; The management of accounts receivable is efficient and the collection rate is high; Under light assets, the scale of liabilities is small and the cash on hand is abundant.
\u3000\u30004. Investment suggestion: in 2022, the two sessions mentioned promoting the deep integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consumption, promoting the recovery of life service consumption and developing new consumption formats and models. We believe that the current business management industry has structural growth opportunities, and the recovery of consumption is conducive to the growth of passenger flow and sales in shopping centers, thus thickening the growth rate of revenue and profit of business management companies. It is recommended to pay attention to Baolong business, which has room for improvement in the life and operating performance of China Resources Vientiane, a leading central state-owned enterprise business management company, and to Longhu Zhichuang and Wanda business management, which are about to be listed.
\u3000\u30005. Risk warning: the intensified competition in the external expansion market leads to higher acquisition price and higher risk of goodwill impairment; Repeated outbreaks have led to lower than expected rental growth in shopping centers; The decline of economic prosperity has led to the decline of residents’ disposable income.
