Text/Leju Finance Xu Jiumian
This autumn, the IPO of the property company seems a little cold.
In the past two days, the prospectuses of Helenburg Property and R&F Property have been invalidated. As of the end of this month, Mingyu Commercial Services, Zhongliang Baiyue Zhijia, and Dongyuan Renzhi Service, if the three property companies cannot wait for the notice of hearing on the Hong Kong Stock Exchange, the first prospectus materials submitted will face the situation of expiration and "invalidity".
The timeline is elongated, and the listing of property companies is "more out, less in", and at the same time, in the second half of the year when there are not many tables, the pass rate is also decreasing. Since the beginning of July, only Lushang Service, Suxin Life Service, Jinmao Property, Shui On Xintiandi, and Wanda Commercial Management have delivered the table.
And since July 16 Kangqiao Yue Life (02205. AFTER HK) successfully landed on the Hong Kong Stock Exchange, some people returned to the sea to terminate the listing, some people lurked in Hong Kong companies for many years without illness, some people repeatedly lost battles and submitted tables many times, and only one property company in Beijing Jiaye received the hong Kong Stock Exchange pass.
Looking back at the first half of this year, there have been 21 small and medium-sized property companies intensively handing over the table, as well as the results of 5 successful listings and 6 completed meetings, which also made the market shout out that "small businesses also have spring".
According to leju finance statistics, since 2021, a total of 11 property service enterprises have newly landed on the capital market. Among them, Songdu Service (09608. HK), Xingsheng Commercial (06668. HK), and Rongxin Services (02207. HK), the 3 property companies are only ushered in the final bell ringing moment after the second time of handing over the watch.
As of now, there are still 21 property companies in line, waiting for Godot, waiting for a "hope". Among them, Yujia Life Service, Century Jinyuan Service, and Zhongnan Service, 3 property companies have already handed over the table for the second time during the year.
Is it difficult for small things to pass?
Previously, the first prospectus materials of Xinli Service and Tianyu Zhilian Service were invalidated at the beginning of September and the end of September respectively.
Among them, Xinli Property has said that the invalidation of the application materials will not affect the company's existing plans, and it will be resubmitted in a timely manner after updating the materials. However, at present, the second time the table has not yet been waited, and the news of contacting potential buyers has been flying all over the world, involving objects including Longhu Property and Jinke Service (09666. HK）。
Xinli Property, Tianyue Zhilian Service, and Haiyue Life, whether the 3 "expired" will still wait for the second time to submit the table is not yet known; Mingyu Commercial Service, Zhongliang Baiyue Zhijia, and Dongyuan Renzhi Service, 3 property companies that are about to expire within a month, can they rush again at the last moment?
Mingyu Commercial Service, Zhongliang Baiyue Zhijia, and Dongyuan Renzhi Service, the three property companies are all "mini" property enterprises with strong regional strength. Mingyu Commercial Service and Dongyuan Renzhi service heavy southwest, a base camp in Chengdu, one in Chongqing; Zhongliang Baiyue Zhijia layout in the Yangtze River Delta.
From the perspective of management scale, the 2.9 million square meters of management scale of Mingyu Commercial Services has refreshed the record of the lowest area under management of the IPO of the property enterprise; Zhongliang Baiyue Zhijia and Dongyuan Renzhi Service have similar area under management, but the latter has more room for growth in the scale under management, with the contract in-management ratio of 3 and the latter 1.68.
From the perspective of performance profitability, the gross profit margin and net profit margin of Mingyu Commercial Services, which are mainly managed by commercial management, are leading, 44.1% and 30.4% respectively, but limited by the scale, and the revenue of 105 million yuan is quite different from the other two.
The gap between Zhongliang Baiyue Zhijia and Dongyuan Renzhi Service is not large in terms of revenue, gross profit margin and net profit margin. However, the timeline will be extended, in the past three years of revenue growth, Zhongliang Baiyue Zhijia is better, and Dongyuan Renzhi Service has won back a city in terms of net profit growth in the past three years.
From this point of view, the probability of Zhongliang Baiyue Zhijia and Dongyuan Renzhi Service stepping on the meeting may be relatively larger than that of Mingyu Commercial Service.
Pure dwellings are not fragrant?
Without scale advantages, many small and medium-sized property companies are choosing to take a different path in order to impact the capital market, jumping out of the traditional business development barriers and focusing on non-residential properties other than residential.
At the beginning of the year, Rong Wanjia, Songdu Service and Xingsheng Commercial successively knocked on the door of the capital market; in May and June, New Hope Service and Yuexiu Service successfully landed on the Hong Kong Stock Exchange; in July, China SCE Commercial Management, Landsea Green Life, Lingyue Service, DXN Service Group, Rongxin Service and Kangqiao Yue Life concentrated on banging the gong. Combing these 11 property enterprises, the scale under management is mostly concentrated in 10-30 million square meters, which is not large.
However, most of the 11 property companies have extended their tentacles to the non-residential sector, marking themselves with special labels. The pure commercial services of Xingsheng Commercial, the people's livelihood property of New Hope Service, the subway business served by Yuexiu, the asset-light characteristics of China SCE Commercial Management, and the green story of Landsea's green life, etc. It can be said that these small and medium-sized property enterprises, which are difficult to narrate from the scale, have greatly increased the chances of winning the capital breakthrough by cutting into the subdivision track and labeling them with characteristic labels.
However, most of them still take basic residential properties as their main business form, but there are also non-owner value-added services with a large proportion of the revenue composition of Rongwanjia, Rongxin Service, Kangqiao Yue Life and other property enterprises. At the same time, after landing on the capital market during the year, the overall performance of its stock market was also weaker. It is not uncommon for breaks, sluggish trading volumes, and shrinking valuations, and valuations have dropped from 40 times in 2020 to 15-20 times.
Looking at Zhongliang Baiyue Zhijia and Dongyuan Renzhi Service, the former is still taking the pure residential route, and although the latter plays "urban operation service", it is not obvious in the business line, and nearly 70% of the management area is still from the residential format.
In addition, behind Zhongliang Baiyue Zhijia stands the service of property giant Country Garden, which may be attractive to investors to some extent. The parent company of Dongyuan Renzhi Service, Dima Shares (600565.SH), has "preemptively" announced the news that its listing in Hong Kong has been approved by the China Securities Regulatory Commission, which may also become an important boost at the last minute.
State-owned enterprises good chanting?
Among the property companies that have completed the listing, they are dragged down by the parent company and have become the ones who have rescued the debt crisis of housing enterprises. The delisted Blu-ray Gerber, Evergrande Properties on the shelves, the colorful life where assets were cut and sold, and the first service rumored to find a buyer...
Among the property companies that have been waiting for the admission ticket, they have "retreated" halfway and voluntarily abandoned the listing. R&F Property and Sunshine Zhibo Service both chose to "retreat from the whole body", a "sell" Country Garden service, directly on the ship of property stocks; a "exchange of shares" of all things cloud, exchanged for a ticket waiting to set sail.
Halfway back, one after another invalidation, selling oneself for a full body retreat, in the IPO of the property enterprise, state-owned enterprises seem to have a better life. In the second half of the year, the "only seedling" who passed the hearing of the Hong Kong Stock Exchange, Beijing Jiaye, in addition to the characteristic label of Hutong property, the most prominent identity is the background of state-owned enterprises.
In the process of preparing for the IPO, the controlling shareholder, Urban Construction Group, introduced Beijing Tianjie Group (hereinafter referred to as "Tianjie Group"), which also has a state-owned enterprise background, as a strategic investor.
At the end of last year, Tianjie Group spent 10 million yuan to buy 1.13% of the shares of Jingcheng Jiaye. Tianjie Group is 100% affiliated to the State-owned Assets Supervision and Administration Commission of the People's Government of Dongcheng District of Beijing (hereinafter referred to as "Beijing Dongcheng District State-owned Assets Supervision and Administration Commission"), in other words, the strategic investor behind Beijing Jiaye is actually the State-owned Assets Supervision and Administration Commission of Beijing Dongcheng District.
Looking closely at the performance of Beijing Jiaye, it is actually not excellent. From 2018 to 2020, the revenue was 918 million yuan, 1.045 billion yuan and 1.09 billion yuan, respectively, and the profit during the year was 41.38 million yuan, 51.12 million yuan and 68.76 million yuan, respectively. Revenue for the first five months of 2021 was $478 million, and profit for the period was $50.04 million.
Earnings are within the standards that the Hong Kong Stock Exchange will implement next year, but compared with peers, net profit margins and gross margins are at a low level. From 2018 to 2020, the net profit margin of Beijing Jiaye was 4.5%, 4.9% and 6.3%, respectively, and the gross profit margin was 20.8%, 19.8% and 20.8%, respectively. In 2020, the net profit margin of the 40 listed property companies on the Hong Kong Stock Exchange was 14.23%, and the beijing good industry was far below the average level.
If calculated according to the average area under management of the top 100 property enterprises in 2020 of 48.7872 million square meters and the average net profit of 105 million yuan, the net profit of the top 100 property enterprises in the area under management is 21,500 yuan. Roughly calculated, if the company reaches the net profit listing standard of HK$35 million, its management scale should be more than 13.45 million square meters.
As of May 31, 2021, Jingcheng Jiaye had an area under management of 30.5 million square meters. Among them, the area under management in the Beijing-Tianjin-Hebei region is 27.3 million square meters, accounting for about 89.4% of the total area under management.
The higher requirements of the Hong Kong Stock Exchange for listing profitability will be implemented early next year. It can be said that if the last two months of the year are missed, small and medium-sized property enterprises that want to be listed on the Hong Kong Stock Exchange may be postponed or will not be able to realize the listing plan.