In 2022, the scale of the property service sector in the capital market will further expand. According to the research data recently released by China Index Research Institute, as of May 13, a total of 59 property service enterprises have landed in the capital market, and another 6 have submitted their statements and are in the process of listing, which is in the sprint stage.
Under the background of market fluctuations, the influence of related parties, the continuous increase of performance pressure, increasingly fierce competition and enterprise development differentiation, excellent property listed companies continue to grasp the development opportunities of the industry, expand their own scale and expand service boundaries with the help of the capital market, and lead the rapid development of the industry, which contains rich potential.
early market overheating property sector valuation callback
According to the data released by the China Index Institute, as of May 13, there were 59 main board listed companies in the property service industry, including 55 in Hong Kong and 4 A shares. The total market value of the property service sector of Hong Kong stocks soared all the way in the fourth quarter of 2020, remained high after 2021, and exceeded HK $trillion at the end of June. But then there was a significant adjustment, which fell to HK $446.49 billion by May 13, 2022.
It is worth mentioning that the property service sector of Hong Kong stocks developed at a high level in the first half of 2021. The share price increase in the second quarter of 2021 continued to be higher than the overall level of Hang Seng Index. It has achieved rapid growth for a long time and accumulated a large number of profit taking, which means there is great callback pressure on itself. Under the influence of multiple factors, the property service sector has entered a downward channel driven by the overall market.
From the price earnings ratio level, from January to June 2021, the overall valuation level of Hong Kong stock property service sector is still high, reaching 41.3 times at the beginning of the year. However, the valuation level dropped significantly next, and entered a relatively stable state only in early January 2022. On May 13, 2022, the average p / E ratio of the property service sector of Hong Kong stocks was 13.0 times, which was higher than the average level of Hang Seng Index (9.1 times). The capital market still paid attention to the property service sector.
According to the analysis of the China Index Academy, with the slowdown of sales growth in the real estate industry and the tightening of financing channels, the operating pressure of real estate enterprises has increased significantly. In order to alleviate the crisis, some real estate enterprises control the "blood transfusion" of property service listed companies, and even take desperate measures to bring business hidden dangers to property service listed companies. At the same time, it has hit the confidence of investors to a certain extent, and the panic has spread, Accelerate the bottom of the property service sector.
Referring to previous data, the current P / E ratio of Hong Kong stock property sector is equivalent to the level in November 2018. Looking back at the end of 2018, there were only 13 listed companies in property services, with an average operating revenue of 2.21 billion yuan, an average net profit of 280 million yuan, an average net profit margin of 11.4% and an earnings per share of 0.2 yuan, all lower than the current level.
The China Index Institute believes that due to the internal adjustment demand, market environment and related real estate enterprises, the performance of the Hong Kong stock property service sector has deviated from the company's fundamentals and there is an oversold phenomenon. The current overreaction of the capital market breeds the motivation for the upward return of future value. With the easing of the situation in the real estate industry, the introduction of industry support and economic stimulus policies, and the gradual improvement of the external environment, the Hong Kong stock property service sector is also expected to enter the valuation repair cycle.
last year, the area under management of the property increased by 40% year-on-year
Although the property service sector as a whole has entered the downward channel, there are still excellent property service listed companies that have withstood the test of the capital market. High level of enterprise operation and high-quality performance growth are the cornerstone for excellent listed companies to win the attention of the capital market; The stable operation of affiliated real estate enterprises is a powerful guarantee for the development of listed companies; Excellent listed companies enhance their development potential by developing diversified business.
According to the data of China Index Institute, by the end of 2021, the average area under management of listed property service companies was 110 million square meters, a year-on-year increase of 44.3%, and the average contract area was 160 million square meters, a year-on-year increase of 37.6%. In 2021, the third-party expansion area of property service listed companies accounted for an average of 57.1% of the area under management, an increase of 10.3 percentage points over 2020.
The rapidly expanding management scale helps property service enterprises to land in the capital market, and the financing of property service enterprises is mostly used for market acquisition and M & a related businesses, so as to speed up the scale expansion and form a virtuous circle. According to the data of China Index Institute, in 2021, the average operating revenue of listed property service companies reached 3.37 billion yuan, an increase of 1.11 billion yuan over the previous year. There are four listed property service companies with an operating income of more than 10 billion yuan, including country garden service, ya life service, green city service and poly property. Among them, the operating income of country garden service ranks first, with a total of 28.84 billion yuan.
In 2021, the average gross profit of listed property service companies was 910 million yuan, a year-on-year increase of 44.1%, and the average net profit was 450 million yuan, a year-on-year increase of 50.1%. Country garden service, elegant life service and China Resources Vientiane life are the leading industries, with 4.35 billion yuan, 2.57 billion yuan and 1.73 billion yuan respectively. In 2021, the average gross profit margin and net profit margin of listed property service companies were 29.1% and 13.2% respectively, realizing sustained and steady development. From the perspective of income composition, the main body of income of listed companies of property services is still basic property services. In 2021, the average income of basic property services of listed companies was 2.18 billion yuan, a year-on-year increase of 37.0%, an increase of 7.7 percentage points over 2020. The average income from diversified operation was 1.4 billion yuan, a substantial increase of 55.5% year-on-year. Diversified operation has increasingly become an important track for property service listed companies to expand their profit space.
In 2021, the average reserve area of listed property service companies was 58 million square meters, a year-on-year increase of 24.0%, an increase of 13.6 percentage points over 2020, and the reserve area accounted for 53% of the average area under management. In 2021, the average operating revenue, average gross profit and average net profit of property service listed companies increased by 49.0%, 44.1% and 50.1% year-on-year respectively. Compared with 2020, the average growth rate of operating revenue further increased. However, affected by the reduction of epidemic subsidies and the low level of gross profit margin of M & A projects and some new businesses, the average growth rate of gross profit and net profit decreased. The net profit of 8 listed companies decreased to varying degrees, and the pressure on operating performance increased. The Chinese Academy pointed out that with the digestion and absorption of new projects and the application and promotion of digital means, there is still room for growth in the average gross profit and net profit in the future.
property listed companies' value-added services leapfrog growth
Under the development requirements of scale expansion, community value-added services of property service listed companies have achieved leapfrog growth, mainly focusing on community life services, real estate brokerage, community retail, home decoration services and other fields. From the perspective of service space extension, property service listed companies go out of the community and into the vast space of the city. According to the Research Report of China Index Institute, in 2021, the urban service revenue of country garden service was 4.53 billion yuan, accounting for 15.7% of the operating revenue, with a year-on-year increase of 412.3%; Poly property invested 97.5 million yuan and Pubang Landscape Architecture Co.Ltd(002663) jointly established poly environmental service company. Through the implementation of the strategic layout of "one body and two wings", poly property quickly cut into the sanitation track based on the sanitation service and the two wings of "garbage classification + recycling of renewable resources" and "Landscaping maintenance + municipal infrastructure maintenance".
In 2021, EBIT (profit before interest and tax) of listed property service companies reached 540 million yuan, an increase of 47.1% over the previous year. In the future, with the continuous expansion of the company's scale and the continuous improvement of operating efficiency, the wealth creation level of listed property service companies will be further improved. At the same time, the ROIC (return on invested capital) of listed property service companies has shown a downward trend in recent three years, from 26.4% to 20.0% in 2021, but it still maintains an excellent level higher than 15% and is significantly higher than the average level of the Hong Kong market. China Index Academy believes that after years of development, the scale of listed property service companies has expanded rapidly and their profitability has been continuously improved. In 2021, the main indicators have made rapid progress. At the same time, there is broad space in business fields such as platform economy, non residential and urban services, which is expected to lead the industry to break through the development boundary.
