Event: the nine departments jointly issued the opinions on further promoting the construction of smart communities
On May 20, an article on the official website of the Ministry of Civil Affairs said that the Ministry of civil affairs, the central political and Legal Commission, the central network information office, the development and Reform Commission, the Ministry of industry and information technology, the Ministry of public security, the Ministry of finance, the Ministry of housing and urban rural development and the Ministry of agriculture and rural areas jointly issued the opinions on further promoting the construction of smart communities (hereinafter referred to as the opinions), which defined the overall requirements, key tasks and safeguard measures of the construction of smart communities. According to the opinions, by 2025, we will basically build a smart community service platform with grid management, refined services, information support and open sharing, initially build a new digital community with smart sharing and Harmonious Co governance, and significantly improve the level of community governance and service intelligence; We will improve the government guided and multi-party investment mechanism for smart community construction, encourage social forces to participate in “Internet + community services” and innovate service delivery models and products.
Comments: several central ministries and commissions jointly issued a document to further promote science and technology empowerment, shoulder the role of “grass-roots pillar of community governance” and “key implementation carrier”, further enhance the importance of property management industry, and property management enterprises usher in more development opportunities
1) in our previous report, we proposed that “the property management industry is positioned as the ‘grass-roots pillar of social governance’… The interaction and coordination between the government, enterprises and residents are improved”, “With the popularization of Internet of things, big data and other technologies, the penetration of hardware facilities such as intelligent gate, intelligent access control and intelligent parking lot in the community has increased. Property management enterprises are expected to realize scientific and technological empowerment, reduce labor costs and improve long-term competitiveness… To achieve the goal of cost reduction and efficiency increase”, “At present, the ‘smart’ property only stays at the initial stage of front-end equipment data acquisition and simple matching… With the subsequent data centralization, large-scale application and ‘data contact reconstruction’, it is expected to promote the model reorganization and process innovation of animal management industry and data-driven and efficient collaboration”.
For details, please refer to a series of reports such as 20200303 “building the stage of property management, singing the drama of science and technology – Everbright Securities Company Limited(601788) property management and science and Technology Industry joint report”, 20210105 “2021: basic pillar of social governance, striving for the best mission – real estate (property service) investment strategy report in 2021”.
2) the nine central departments jointly issued a document to further promote the construction of smart communities, and clearly proposed to basically build a smart community platform with grid management, fine service and information support by 2025, preliminarily build a new digital community, and significantly improve the level of community governance and service intelligence; We believe that the importance of the property management industry has been clarified and enhanced again as a “grass-roots pillar of social governance” that goes deep into the community grass-roots level and closely adheres to the needs of residents, as a “grid and information management unit” that improves the scientific and technological capacity and management level of the community, and as a “key implementation carrier” that carries the normalized management of the epidemic situation and the life scene of the digital community. In the follow-up, property management enterprises should seize the rare development opportunities, actively respond to the policy call, continuously empower through science and technology, enrich community management means, improve the level of community governance, assume more responsibilities and obtain more development opportunities in the construction of multi-party smart communities.
Investment suggestion: the property management industry is positioned as the “grass-roots pillar of social governance”, with sustained and friendly policies and broad development space for the industry; This time, the nine central departments jointly issued a document to promote the construction of smart communities, and property management enterprises, as the “key implementation carrier”, won more development opportunities; We believe that the policy, fundamentals and long-term development trend of the property management industry have not changed. In the short term, affected by macro factors such as the interest rate increase of the Federal Reserve and the conflict between Russia and Ukraine, the overall correction of the sector has been obvious since the beginning of the year, and the stock prices of some stocks fluctuate greatly, providing a better allocation opportunity. Investment suggestions focus on three main lines:
1) “valuation repair”: pay attention to the recovery of liquidity in the real estate industry and the decline of risk premium caused by the gradual liquidation of credit risk of private real estate enterprises. It is suggested to pay attention to country garden service, xinchengyue service, Jinke service, Shimao service, rongchuang service, Jianye new life, etc.
2) “independent development”: pay attention to the property management of private enterprises with the third party accounting for more than 80% of the management area and basically having the ability of independent operation and expansion. It is suggested to pay attention to green city service, Xuhui Yongsheng service and elegant life service.
3) “steady state-owned enterprises”: continue to be optimistic about the steady development of state-owned enterprise property management companies and the valuation premium brought by low risk. It is suggested to pay attention to poly property, CNOOC property, China Resources Vientiane life, China Merchants Property Operation & Service Co.Ltd(001914) , ocean services.
Risk analysis: the risk of rapid increase of labor cost, intensified third-party outsourcing competition, value-added service expansion risk, related party dependence risk and outsourcing business quality risk.
