Group 1 - The core business segment of the company, the asset management business (Xiangyu), has maintained both scale and efficiency, managing 319,000 rental units, a year-on-year increase of 9% [1] - The average rental turnover days have decreased to 8.8 days, a reduction of 0.7 days compared to the same period in 2024, with a stable rental rate at 95.2% [1] - Despite a 17.41% year-on-year decline in revenue due to the new product "Xiangyu Preferred" adopting net accounting, the adjusted gross profit margin reached 14.05%, an increase of 2.22 percentage points, indicating strong profitability [1] Group 2 - The company has innovatively launched a "dual-commuting rental" tool utilizing digital means to enhance user experience, allowing users to input work location, preferred transportation, and acceptable commuting time to quickly match suitable rental options [1] - The company has partnered with JD Logistics to create an integrated solution covering product selection, quality control, and logistics, reducing user waiting times [2] - The rental market in China is approaching a scale of 2 trillion yuan, with expectations to exceed 3 trillion yuan by 2030, showing an annual compound growth rate of 5% to 10% [2] - As a leading long-term rental apartment brand with 24 years of experience, the company has served over 2 million homeowners and 5 million tenants, positioning itself for steady growth through digital capabilities and continuous service innovation [2]

Core Viewpoint - The real estate market is gradually stabilizing and recovering under continuous policy optimization, with I Love My Home Group showing significant growth in its mid-year financial report, indicating a promising future for the company as a leading player in the industry [1][12]. Financial Performance - In the first half of the year, I Love My Home Group achieved a net profit attributable to shareholders of 38.4 million yuan, a year-on-year increase of 30.8%, and a non-recurring net profit of 49.9 million yuan, a substantial increase of 213.89% compared to the same period last year [1]. Business Model Stability - The residential service industry operates on a "light asset, heavy operation" model, providing inherent cash flow advantages and business resilience against market cycles [3][5]. - I Love My Home's revenue primarily comes from transaction commissions and asset management service fees, which mitigates risks associated with land value fluctuations and inventory depreciation [5]. Revenue Structure - The company has diversified its revenue sources across brokerage, asset management, and new housing, with brokerage business GTV growing by 10.5%, asset management GTV increasing by 0.2%, and new housing GTV rising by 32.6% in the first half of the year [5][10]. Operational Efficiency - I Love My Home has established standardized service processes and training systems nationwide, enhancing operational efficiency and reducing marginal costs of business expansion [6]. - The company has a well-defined governance structure and effective internal control systems to manage risks and ensure stable operations [6]. Brand Strength - With 25 years of market presence, I Love My Home has a strong brand recognition and influence, which attracts customers and talent, reinforcing market confidence [7]. Competitive Advantage in the Stock Market - The Chinese real estate market is transitioning from incremental development to stock operation, with the stock market expected to reach 7-8 trillion yuan by 2024 and surpass 10 trillion yuan by 2030 [8]. - I Love My Home's brokerage business generated 2.032 billion yuan in revenue, a year-on-year increase of 13.57%, supported by its deep market penetration in core cities [8][9]. Asset Management Business - The asset management segment, represented by the rental brand "Xiangyu," manages 319,000 units, a 9% increase from the previous year, providing stable cash flow and service income [9][10]. - The synergy between the asset management and brokerage businesses allows for comprehensive customer value extraction throughout the customer lifecycle [10]. Future Outlook - The current policy environment is favorable for real estate, with the government aiming to stabilize the market, which presents both short-term recovery opportunities and long-term growth potential for leading companies like I Love My Home [12][13]. - The ongoing structural transformation in the residential service industry is expected to enhance the competitive advantages of leading firms, with I Love My Home benefiting from its extensive network and digital platform investments [13][14]. Strategic Expansion - I Love My Home is expanding its service boundaries by collaborating with major companies to create a comprehensive living service ecosystem, enhancing customer loyalty and diversifying revenue streams [11][14].

Investment Rating - The report initiates coverage with a "Buy" rating for the company, setting a target price of 3.49 CNY per share based on a 40.0x PE valuation for 2026 [3]. Core Insights - The company is positioned to benefit from the ongoing recovery in the real estate market, with expectations of steady growth in net profit from 150 million CNY in 2025 to 262 million CNY in 2027, reflecting year-on-year growth rates of 105.0%, 36.7%, and 27.4% respectively [3]. - The report highlights the favorable industry trends, including a shift towards the secondary housing market and an expanding rental market driven by demographic changes and increasing institutionalization [2][3]. Summary by Sections Company Overview - The company operates as a leading digital residential service platform, focusing on housing transaction services and asset management, with a strong emphasis on user value and community engagement [12][17]. Industry Trends - The real estate market is experiencing a transition to a "stock housing" era, with secondary housing transactions expected to increase from 30% in 2021 to 46% by 2024, driven by declining new housing supply and consumer preferences for established properties [2][49]. - The rental market is anticipated to grow significantly due to the influx of mobile populations and a low current institutionalization rate of 4.5% compared to over 50% in developed countries [2][59]. Company Advantages - The company has a strong market presence in key cities such as Beijing, Shanghai, and Hangzhou, with over 20,000 agents, representing more than 70% of its workforce [2][64]. - The company has demonstrated superior performance in secondary housing transactions, with year-on-year increases in major cities significantly outpacing national averages [2][66]. Short-term Trading Opportunities - The report identifies potential short-term trading opportunities linked to favorable real estate policies, noting that the company's stock typically outperforms the market within 5-10 trading days following policy announcements [2][4]. Profit Forecast and Valuation - The company is projected to achieve a net profit of 1.5 billion CNY in 2025, with a robust growth trajectory expected through 2027, supported by a stable increase in revenue and a recovery in the housing market [3][26].

Financial Performance - In 2024, the company's brokerage business achieved a GTV of approximately 231.5 billion CNY, a year-on-year increase of 4.2%. In Q1 2025, GTV reached about 56.8 billion CNY, up 35.2% year-on-year [2][3] - The company reported a Q1 2025 operating revenue of 2.823 billion CNY, a year-on-year increase of 2.54%, with a gross profit margin of approximately 10.28%, up 1.75 percentage points year-on-year. However, the net profit attributable to shareholders decreased by 75.29% to 6.27 million CNY [2][3] Market Position and Strategy - The company focuses on first-tier and strong second-tier cities, including Beijing, Shanghai, and Hangzhou, where it has maintained a steady market share increase. In Shanghai, the market share rose by 0.8 percentage points year-on-year [2][3] - The average commission rate for buying and selling business slightly decreased in 2024 due to policy adjustments in core cities, but the company continues to provide competitive rates aligned with government guidelines [4] Business Expansion and Innovation - In 2024, the company made progress in business model innovation in areas such as renovation and community e-commerce, with plans for further expansion in 2025 [5] - As of Q1 2025, the company operated approximately 2,636 stores, including 2,134 direct-operated and about 500 franchised stores, with over 30,000 agents [6] Talent Development - The company is enhancing its talent development system, focusing on a tiered training approach and optimizing multi-dimensional incentive systems to improve service quality and market share [7] Digital Transformation - In 2024, the company's app MAU reached 3.47 million, a 10% year-on-year increase, while the mini-program MAU reached 2.13 million, up 1% year-on-year. The website customer entry rate reached 43.3%, an increase of 1.5 percentage points [8][9] Market Outlook - The company anticipates a recovery in the second-hand housing market in 2025, driven by the easing of housing policies and macroeconomic recovery. Key cities like Beijing, Shanghai, and Hangzhou are expected to see increased transaction activity [9][10] - The long-term growth of the housing rental market is expected to continue, with projections indicating that the overall rental market size could exceed 3 trillion CNY by 2030, with an annual compound growth rate of 5-10% [10] Cost Management - The company plans to maintain a downward trend in costs and expenses in 2025 by controlling various operational costs, including rent, renovation, and personnel expenses [9][11]

Core Insights - The report highlights the robust growth in the housing rental sector, with companies focusing on both scale and efficiency, while urban village redevelopment for affordable housing emerges as a new growth opportunity [2][4]. Group 1: Revenue Growth - Six disclosed rental companies reported a combined revenue of 8.87 billion yuan, reflecting a year-on-year increase of 3.65% [2]. - Among these, Boyu contributed 41.76% and Guanyu contributed 29.89% to the total revenue [2]. - Rental companies such as Boyu, Guanyu, and Zhaoshang Yidun achieved revenue growth ranging from 3.92% to 42.11% in 2024, with Boyu, Guanyu, and Zhaoshang Yidun generating revenues of 3.702 billion yuan, 2.65 billion yuan, and 1.234 billion yuan respectively, marking year-on-year growth of 7%, 4%, and 13% [2]. Group 2: Operational Efficiency - Rental companies like Xiangyu, Boyu, and Guanyu reported occupancy rates exceeding 95%, indicating stable operations [3]. - As of the end of the previous year, Guanyu's overall occupancy rate was 95.3%, while Boyu's occupancy rate was 95.6%, with a front-end GOP profit margin of 89.8% and a customer satisfaction rate exceeding 95% [3]. - The report noted a significant increase in new rental projects, with 26 new projects launched, primarily due to multiple openings by Vanke Boyu and Longhu Guanyu [3]. Group 3: Policy and Market Trends - Recent policies have been implemented to support the acquisition of existing residential properties for affordable housing, indicating a clear direction from the national level [4]. - Various cities, including Guangzhou, are promoting urban village redevelopment to enhance the affordable housing supply, mandating that at least 10% of residential land in redevelopment projects be allocated for affordable housing [5]. - Despite downward pressure on rents in key cities, signs of stabilization are emerging, with 35 out of 50 monitored cities experiencing a decline in rents, while 15 cities maintained or increased rents [5][6].

Core Viewpoint - The company reported a revenue of 12.54 billion yuan for the year 2024, marking a 3.7% increase year-on-year, and achieved a net profit of 73.41 million yuan, reversing from a loss in the previous year [1] Group 1: Financial Performance - The company achieved a total transaction value (GTV) of approximately 287.6 billion yuan, reflecting a year-on-year increase of 1.2% [1] - The brokerage business generated revenue of 4.1 billion yuan, with a slight year-on-year increase of 0.2%, and a gross margin of 20.3%, up by 0.1 percentage points [1] - The new housing business reported revenue of 1.15 billion yuan, a year-on-year increase of 3.9%, but the gross margin decreased by approximately 0.7 percentage points to around 12.0% [1] Group 2: Asset Management Business - The "Xiangyu" asset management business covered major cities including Beijing, Shanghai, Hangzhou, Suzhou, and Nanjing, with managed housing resources reaching 303,000 units, an increase of approximately 11.8% year-on-year [2] - The asset management business achieved a GTV of about 18 billion yuan, reflecting a year-on-year increase of 6.5%, and generated revenue of 6.13 billion yuan, also up by 6.5% [2] - The adjusted gross margin for the asset management business is approximately 12.7% when accounting for new leasing standards, despite reporting a gross margin of -5.5% [2] Group 3: Digital Development - The company's mobile app had a monthly active user (MAU) count of 3.47 million, representing a year-on-year growth of 10%, while the mini-program MAU reached 2.13 million, growing by 1% [2] - The proportion of mobile clients increased, with the website client entry rate reaching 43.3%, up by 1.5 percentage points year-on-year [2]