At the beginning of the new year in 2022, Longhu threw a heavy message to the capital market – spin off the “property management + business management” business and go public in Hong Kong.
On January 7, while announcing the spin off of the property sector for listing, Longhu Zhichuang life Co., Ltd. (hereinafter referred to as “Longhu Zhichuang life”) officially submitted the prospectus to the HKEx. On the same day, the official website of Longhu group also announced the launch of the new brand “Longhu Zhichuang life”.
This series of actions are orderly and rapid, which has opened the “opening play” of the listing of property giants, and the property capital market will once again give birth to a new market value “Big Mac”, triggering new changes in the pattern of the property industry.
With a management area of 250 million square meters, it was “horse racing enclosure” before listing
According to the prospectus, the new brand “Longhu Zhichuang life” brings together the core capabilities of the two channels of intelligent service and commercial operation of Longhu group. It is a brand of “intelligent life” and “space service” to provide property management and commercial operation services.
Longhu Zhichuang life’s business is not only in residential property management, but also the layout of “three tracks”, namely “residence + business management + office”. The prospectus states: “property management services for residential space, commercial operation management and services for commercial space, and management and services for industrial office and other urban spaces”.
From the perspective of management scale and structure, according to the disclosure in the prospectus, as of December 28, 2021, Longhu Zhichuang’s living contract and strategic cooperation area was 440 million square meters, and the area under management was 250 million square meters; As of September 30, 2021, the proportion of residential and other non-commercial properties under management from independent third parties was 59.8%, an increase of 21.6 percentage points over 38.2% at the end of 2019. In the commercial operation service sector, as of December 28, 2021, Longhu Zhichuang life provided commercial operation services for 60 shopping centers, with a total area of 5.8 million square meters.
At the beginning of 2022, Longhu chose to spin off the property sector for listing. As two leading real estate enterprises in the property sector that have not yet been listed, Vanke and Longhu property listing have always been concerned by the capital market. Previously, the two leading real estate enterprises have said that “the property has no listing plan for the time being”.
However, in November 2021, everything cloud announced the launch of the listing plan, and Longhu was also reported to have a listing action. At the beginning of 2022, Longhu came from behind and took the lead in everything. It not only announced the spin off plan, but also submitted the prospectus at the same time. “The speed of action” surprised the market.
Behind this series of rapid operations, Longhu has long been premeditated and prepared. In 2021, Longhu made a series of mergers and acquisitions in the property sector, successively acquiring meimeixing property, Yida service, Kailin business service, mainland property management assets under jiulongcang group, etc. now it seems that it is also “enclosure for listing”.
These acquisitions not only help Longhu Zhichuang life improve its area under management, but also make up for the property layout of office buildings, industrial parks, public buildings and other business forms by making efforts to layout the “three major tracks” in advance.
changes in Longhu Zhichuang living contract area and area under management
As for the listing of Longhu Zhichuang life at this time, the China Index Research Institute commented that from the second half of 2021, the depressed market has increased a lot of uncertainty for property service enterprises to participate in the capital market. Longhu Zhichuang life chose to submit a prospectus at this time, indicating that it is full of confidence in the future Hong Kong stock market. Based on the 103 days from the submission of the prospectus to the formal hearing of Yuexiu service, which has the fastest listing process in 2021, Longhu Zhichuang life will also land in Hong Kong stocks three months later. The addition of industry giants not only expanded the overall scale of the whole property sector, but also greatly boosted the confidence in the development of the industry.
“Property management + business management”, what is the starting point of Longhu Zhichuang’s life?
For Longhu Zhichuang life, which is about to join the competition pattern of listed material enterprises, it is facing not only the open competition between “Big Macs”, but also the secret war between “subdivided tracks”.
In terms of the current area under management, Longhu Zhichuang life ranks among the top ten. According to the latest list released by Kerui property management, as of December 31, 2021, in the ranking of management scale of Chinese property service enterprises, country garden service, everything cloud and poly property are in the top three, with the corresponding management scale of 824 million, 700 million and 510 million square meters, and Longhu Zhichuang life is temporarily ranked ninth.
Although the management area is inferior to country garden service and everything cloud, it can be seen from this prospectus that the starting point of Longhu Zhichuang’s life lies in the layout of the whole track.
In particular, in terms of commercial property management track, Longhu Zhichuang life has included commercial operation management services for shopping centers and asset management and services in retail commercial space, so as to provide commercial operation services and property management services for shopping centers including Longhu “Tianjie”, “star mosaic” and other brands and a wider range of customer groups such as tenants, consumers and owners.
According to the disclosure of Longhu Zhichuang life, in 2019, 2020 and the nine months ended September 30, 2021, the passenger flow in the shopping center was 472.2 million, 458.7 million and 504.3 million respectively; The sales of shopping centers under management are about 26.7 billion yuan, 30.5 billion yuan and 44.6 billion yuan respectively.
From the perspective of layout, as of September 30, 2021, Longhu Zhichuang’s first and second tier commercial operation service projects accounted for more than 90%, ranking third among all shopping center operation service providers in China.
Not only that, Longhu Zhichuang life has also incubated asset light business, that is, it is not a simple addition of Longhu intelligent service and Longhu’s commercial operation service and brand, but combines the asset light attributes of the two channels to create a synergistic flagship platform for asset light.
With the core competence of asset light operation, Longhu Zhichuang life provides a full life cycle of asset management services for the shopping center, including asset positioning, design consulting, investment promotion management before the opening, and operation services, tenant management, brand output and consumer services after the opening.
According to the prospectus, as of December 28, 2021, Longhu Zhichuang life has entered into commercial operation service contracts for 128 shopping center projects, with a total contracted construction area of 12.2 million square meters. Among them, 60 shopping centers with a construction area of 5.8 million square meters have been opened, and most of the remaining 68 are expected to be opened from 2022 to 2025.
Emphasize the collaborative consideration behind “one Dragon Lake”
It is worth noting that Longhu Zhichuang life also emphasizes that after the proposed spin off and listing, Longhu Zhichuang life is still a subsidiary of Longhu group. In other words, Longhu Zhichuang life organically integrates the core capabilities of Longhu group’s original intelligent services, business operations and other businesses. It is a new brand grown by Longhu group in the “one Longhu” ecosystem based on the new business connotation and extension.
This also means that Longhu Zhichuang life is still a member of “one Longhu”. Especially at present, in the multi track property layout, office, public construction and other properties have become the “new cake” for material enterprises. Benefiting from the “one Dragon Lake” ecological system, Longhu Zhichuang life will have a wider range of tentacles, covering residential areas, shopping centers, industries, public and other property types, involving consumption, entertainment, catering, life, medical care, education, office, enterprise services, real estate asset management and so on.
At the same time, as a member of the “one Dragon Lake” ecosystem, Longhu Zhichuang life can also cooperate with other main channel businesses of Longhu, such as real estate development, commercial investment, rental housing, house rental and sale, etc.
In addition, Longhu group also helps Longhu Zhichuang life to enable science and technology. For example, support Longhu Zhichuang life to establish a complete, systematic and industry-leading science and technology system to empower business processes, employees and suppliers through artificial intelligence, aiot and intelligent applications.
China Index Research Institute pointed out that Longhu Zhichuang life has established a unique business model, which has established three business segments: residential community management and service, management services for non-commercial forms such as office and Industrial Park, and commercial property operation and management services, and created synergy among various business forms. Under the “one Dragon Lake” ecosystem, it is also conducive to enhance the customer base, explore the growth potential, use science and technology to improve products and services and strengthen their own business.
(source: Beijing News)
