SWS Research Co.Ltd is a subsidiary of Shenwan Hongyuan Securities.99 East Nanjing Road,Shanghai +8621 23297818SWSwww.swsresearch.comRESEARCHIndustry ResearchBringing China to the World6June 2016Overweight传统物业新蓝海打造智慧社区Initiation of coverage物业管理行业由于今年将至少有两家物业管理公司在香港市场新上市，我们预计物业管理行业在未来将迎来更多区域或者全国范围内的行业整合。具体来看，2014年6月，总部位Analyst于深圳的彩生活服务集团(1778：HK,买入)于2014年6月成为第一家在香港上市Kris Li的物业管理公司：2015年10月，中海物业集团(2669：HK)作为中国海外发展A0230511040076(688:HK,买入)旗下从事物业管理业务的全资子公司，在香港主板以实物分派方ARG379式成功独立上市，合资格股东每持有三股中国海外发展可获得分配一股中海物业lihong@swsresearch.com(中海物业和中国海外发展享有相同的股权结构，即由央企中国建筑工程总公司作(+86)2123297223为母公司持有约61%股份)：随后，2015年11月，总部位于广州的独立物业管理公司-中奥到家集团(1538HK)也顺利实现上市。此外，总部位于杭州的开发商绿Research assistant城中国(3900：HK)旗下的绿城服务集团，和总部位于广州的开发商祈福集团旗下Zoe Zhang的祈福生活服务均已在港交所拔露上市计划。A0230115080012BGZ938物管市场高度分散。中国指数研究院2014年数据显示，中国物业管理行业中合计zhangbb@swsresearch.com有超过70,000家公司，但仅有不到20家公司的合约管理面积超过5,000万方。具(+86)2123297450体来看，物业管理公司可主要分为两类，一类具有房地产开发商背景，并在很大程度上受益于母公司充足的物业资源，占总数比例约为80%：另一类则为独立的物业管理公司，占比约20%。从合约管理面积的项目来源来看，中海物业约90%来自于中海自身开发物业，仅有10%来自外部项目，而万科(2202：HK)旗下的万科物业则有高达95%来自于万科自建物业，仅有5%为外部项目。与此形成鲜明对比的是，中奥到家几乎100%在管面积均来自于其他独立开发商发展的项目。酬金制5.包干制。我们注意到，整个行业利润率存在着显著的差异，其中彩生活15年毛利率为55%，而同期中奥到家仅为33.3%。需要强调的是，利润率的差异主要来源于物业管理费的两种不同收取方式一一酬金制和包干制。当按照酬金制收取时，可将物业费按一个预先厘定的百分比率（通常为10%）记作收益，并以余下管理费用支付开支，因此毛利率通常接近100%：若以包干制进行收取时，则需要将收取的物业费全颜记作收益，并将从中支付的开支作为直接经营开支，因此毛利率水平取决于公司的议价能力和成本控制能力。在实践中，我们注意到绝大多数公司倾向于采用包干制收费，其中，绿城服务和中奥到家高达98%的在管面积均实行包干制，万科物业和中海物业约60%的管理面积也以包干制方式进行收取：而彩生活高达90%的管理面积则选择以酬金制方式收取物业管理费用。增值服务意加多元。在已上市三家物业管理公司中，彩生活截至2015年末总合约管理面积达3.22亿方，在行业内位居第一，同期中海物业和中奥到家的在管面积分别为8300万方和3400万方。平均来看，2015年物业管理服务业务的收入占公司总收入的平均比例高达80%，同期除彩生活之外的公司毛利率平均约为24%。需要强调的是，为提供更为多元化的增值服务，几乎所有公司都推出了自有的020平台，其中，彩生活推出的彩之云平台截至2015年末注册用户和活跃用户分别达200万和85.5万，为业内第一，与此同时，中奥到家旗下爱到家则是唯一一个成功覆盖至第三方社区的平台，截至2016年3月末合计覆盖2,870个社区。首次覆盖给予超配评级。目前板块平均估值为13.3倍16年PE,2.6倍16年PB。基于稳步增长的管理面积，有放成本控制下逐步改善的毛利率，以及O20增值业务提供的多元化服务，我们首次覆盖物业管理行业，并给予超配评级。与此同时，我们推出了彩生活(1778：HK)首次覆盖报告并给予买入评级，也建议投资者重点关注另两家已上市公司-中海物业(2669：HK)和中奥到家(1538：HK)，并提醒投资者关注近期即将上市的绿城服务集团。6 June 2016With at least two property management companies to list on the H-share market in2016,we expect the industry to consolidate in the near future as players obtainsufficient funding through the stock market.In June 2014,Shenzhen-based ColourLife Services Group(1778:HK,BUY)became the first property management companyto achieve listing in Hong Kong,followed by China Overseas Property Holdings(COPL,2669:HK,N-R),which was spun-off from the developer China Overseas LandInvestment (COLl,688:HK,BUY)and listed in October 2015,and Guangzhou-basedindependent property management company Zhong Ao Home Group(1538:HK,N-R)in November 2015.Recently,Greentown Service Group,a subsidiary of Hongzhou-based developer Greentown China Holdings (3900:HK,N-R)and Clifford ModernLiving Holdings,a subsidiary of Guangzhou-based developer Clifford Group,disclosedtheir listing plans.Fragmented market is dominated by developers.According to the China IndexAcademy,China's property management industry encompasses over 70,000companies.However,fewer than 20 companies managed a gross floor area (GFA)above 50m sqm in 14A.Property management companies that have a real estatedevelopment background,and thus benefit from the resources of parent companies,account for approximately 80%of the total;the remainder of the industry iscomprised of independent companies.For instance,external projects account for10%of COPL's business;for Vanke Property,a subsidiary of China Vanke(2202:HK,N-R),extemal projects total just 5%.Meanwhile,Zhong Ao Home Group acquired nearly100%of its projects from external developers.Commission vs lump sum fees.We note a striking difference in margins across theindustry.While Colour Life Services recorded a gross margin of 55%in 15A,Zhong AoHome posted 33.3%.However,this is due to the fact that firms can generate revenueeither through commissions,when the company retains a pre-determined percentage(typically 10%),or lump sum payments.The companies that employ a commission-based system feature stable gross margins for the segment,at c.100%,as no directcosts are incurred.For lump sum payments,however,the full amount of receivedfees,as well as expenses,are recognised,resulting in gross margins that are subjectto bargaining power and cost control abilities.We note that the majority of firms tendto opt for lump sum fees.Greentown Service charges lump sum fees for 98%of itsmanaged GFA,similarly as Zhong Ao Home Group.Meanwhile,Vanke Property andCOPL employ the system for 60%of their business.Colour Life Services,however,favours commissions,which accounted for roughly 90%of its total contracted GFA.Increasing focus on value-added services.Colour Life Services is the largest companyin terms of contracted GFA,at c.322m sqm as of end-2015.COPL's business entails aGFA of 83m sqm,while that for Zhong Ao Home reaches 34m sqm.On averagerevenue from property management services accounted for c.80%of companies'total revenue in 2015.Gross margins for companies other than Colour Life Servicesaveraged at c.24%.In addition,in a bid to provide value-added services,all majorcompanies launched mobile applications.Colour Life Services succeeded in achievingthe largest number of registered (2m)and active users (858,000)as of end-2015.Nonetheless,Aidaojia,developed by Zhong Ao Home,was the only platform thatcovered third-party properties,which represented almost all of its 2,870 properties asof March 2016.Initiate with Overweight.The sector currently trades at 13.3x 16E PE and 2.6x 16E PB.Given steady growth of total GFA under management,improved margins on the backof effective cost control,and the promising development of online-to-offline (020)value-added services,we initiate the sector with Overweight.Please refer to the last page for important disclosuresPage 16 June 2016Smarter communitiesChina's first property movement company,Shenzhen Property Management,asubsidiary of Shenzhen Properties Group(000029:CH)was founded in 1981.Since then,the country's property management industry has developed to encompass over 70,000companies according to the China Index Academy,which ranked companies based onoperation scale,business performance,service quality,future development and socialresponsibility.The average GFA under management by the top 100 players in the sectortotaled 17.5m sqm in 2014,representing a Cagr of c.17%from 2008,when average GFAtotaled 6.7m sqm.The average number of managed properties per company increasedfrom 43 to 94 for the period,while the number of cities covered also increased from 11to24.Properties under management are mostly located in tier-2 cities,which account for 42%of total projects,while 35%are located in tier-1 cities and 23%in tier-3 and tier-4 cities.Given the wealthier population and presence of more high-end residential properties,companies are able to charge higher fees in tier-1 cities,yet competition is also fiercerand dominated by large developers,represented by their property managementsubsidiaries.Meanwhile,residents in tier-3 and tier-4 cities tend to be more sensitive tomanagement fees.Therefore,tier-2 cities are generally a better choice for propertymanagement companies that intend to expand their business as there are more optionsin terms of cities and properties,as well as enough room for consolidation.Fig 1:Average GFA and number of properties managed by top 100 property management(m sqm)209410085728015601017.515.14013.510.66.77.37.620002008200920102011201220132014Average GFA under management--Average number of properties under management(RHS)Source:China Index Academy,SWS ResearchFig 2:The location of properties under managementTier-3 and Tier-4cities23%Tier-1cities35%Tier-2 cities42%Source:China Index Academy,SWS ResearchPage26 June 2016Ind ustry ResearchGrowing marketSignificant growth in urbanisation rates and per capita disposable income are the majordrivers for the real estate industry.With a sufficient supply of new land and constructionof additional residential properties,we believe the outlook for the property managementmarket is promising.Based on urbanisation rates,living area per urban resident andnatural population growth,we calculated the market size for the property managementindustry.China's urbanisation rate increased steadily from 47%in 2008 to 54.8%in 2014 and weexpect it to continue rising by 0.8ppts per annum,reaching c.60%by 2020.We believeliving area per urban resident will reach 38 sqm by 2020,improving 0.7sqm per annumfrom 32.91 sqm in 2012.Previously,we had estimated an average natural population growth of 0.5%for 2016-2020 based on a birth rate of 1.2%and death rate of 0.7%.However,we revised ourforecasts to 0.7%on the back of a higher birth rate at c.1.4%as China has allowed allfamilies to have two children in late October 2015,while maintaining a death rate of0.7%.According to our calculations,the existing property management market totalledc.26.8bn sqm in 2015 and we expect it to reach 32.8bn sqm by 2020,representing a five-year Cagr of c.4%.Fig3:Urbanisation rate and annual disposable income per capita(Rmb)35,00060%30,00025,00050%20,00015,00040%10,0005,000030%2008200920102011201220132014Annual disposable income per urban resident-Urbanisation rate(RHS)Source:NBS,SWS ResearchFig 4:Steady increase in new residential properties(m sqm)6,0005,0004,0003,0002,0001,0002008200920102011201220132014New land supply(site area)for property useGFA of residential properties under constructionGFA of completed residential propertiesSource:NBS,Ministry of Land and Resources,SWS ResearchPage36 June 2016Fig 5:Urbanisation ratesFig 6:Living space growth(sqm)60%050%3040%30%2020%151010%50%Source:NBS,Wind,SWS ResearchSource:NBS,Wind,SWS ResearchFig 7:Birth,death and natural growth rates4.0%r3.0%3.5%2.5%3.0%2.0%2.5%2.0%1.5%1.5%1.0%1.0%0.5%0.5%0.0%0.0%Birth rateDeath rate-Natural population growth rate (RHS)Source:NBS,Wind,SWS ResearchFig 8:Estimated newborns and birth rates in China(m)4.0%35%2025%152.0%1015%10%0.5%00.0%Birth rateSource:NBS,Wind,SWS ResearchPlease refer to the last page for important disclosuresPage4