CMPO(SZ:001914) Haitong Securities International·2025-06-04 07:41Investment Rating - Investment advice: Positive on the long-term value of the property sector, recommending Onewo, China Resources Mixc Lifestyle Services, China Overseas Property Holdings, Poly Property Services, China Merchants Property Operation & Service, ChongQing New DaZheng Property Group [3][91]. Core Insights - The property management industry is facing profit challenges due to multiple adverse factors, leading to a phenomenon of "revenue growth without profit growth" since 2022. Key issues include pressure from parent companies, weakened real estate development investment, weak ability to increase property fees, and significant asset impairment [4][92]. - The industry is shifting from capital logic to operational logic, focusing on cash flows and returning to cyclical business characteristics, emphasizing basic property services [4][93]. - There are new opportunities in long-term revenue and cost management, with China's property fee burden being significantly lower than that of the US and Japan, indicating potential for growth [5][94]. Summary by Sections 1. Industry Challenges - The property management sector is experiencing a profit crisis due to several overlapping adverse factors, including downward pressure from parent companies and a decline in new project scales [4][10]. - The phenomenon of "revenue growth without profit growth" has become prominent among top property companies since 2022, with revenue growth slowing while gross and net profits have shown negative growth [17][92]. 2. Operational Focus - The industry is transitioning to an operational focus, emphasizing cash flow and basic property services, moving away from high-valuation mergers and acquisitions [4][93]. - Companies are optimizing their operational capabilities and focusing on core business models to enhance profitability [38][40]. 3. Market Dynamics - The competitive landscape is stabilizing, with leading companies solidifying their positions. The market is expected to see continued demand for property management services, particularly in non-residential sectors [5][94]. - The introduction of technology and robotics is anticipated to reduce costs and improve service models, providing new growth avenues [66][70]. 4. Financial Performance - The property management business is characterized by low profit margins, with gross margins around 15% and net margins declining, indicating a return to a cash flow-centric business model [50][47]. - The cash flow stability of property management contracts, typically lasting 3-5 years, enhances companies' resilience against market fluctuations [77][78]. 5. Future Outlook - The long-term outlook for the property sector remains positive, with potential for growth in service consumption and technological advancements driving efficiency [60][61]. - The sector is expected to maintain a robust business model, focusing on high cash generation and sustainable growth strategies [94][81].