The valuation of listed property management companies has dropped by about 70% in four years, and their growth is gradually reaching its peak.

Recently, there are two things worth noting in the property management industry.

First, on the evening of May 6th, Country Garden Services (06098.HK) announced that it had entered into a loan contract with a company controlled by its major shareholder, Yang Huiyan, lending the latter a revolving loan of 1 billion yuan for ensuring the completion and delivery of buildings.

This loan is secured by 16.26% of the shares of Country Garden Services held by Yang Huiyan, with an annual interest rate of 5%. In the future, either the major shareholder will directly repay the loan, or it will be deducted from the dividends of Country Garden Services.

Judging from Country Garden's current financial situation, it is highly likely that the loan will be gradually deducted from the dividends.

Last year, the net profit of Country Garden Services was approximately 1.87 billion yuan, and the dividend payout was about 990 million yuan. If the loan is repaid with the dividend money, calculated proportionally based on the 16.26% shares held by the major shareholder's Yang family, it will take 7 years to pay off the loan.

Second, recently, the China Index Academy released the newly added contracted area of property service enterprises in April 2025. The top 50 enterprises added a total of 52.25 million square meters.

In the same period of 2024, this figure was 90.13 million square meters; in the same period of 2023, it was 86.83 million square meters; and in the same period of 2022, it was 91.61 million square meters.

From 2022 to the end of 2024, the annual increment of the newly added contracted area of the top 50 property management companies decreased from 2.392 billion square meters to 1.15 billion square meters, a decrease of 52%.

In 2022, there were 7 property enterprises with newly added contracted areas exceeding 100 million square meters, but there was none last year. It seems that the growth of the industry scale is reaching its peak.

Now, some leading property management companies are preparing to expand into the property market of low - cost and old communities. However, this is a hard nut to crack. Not only is the profit low, but there are also complex interest entanglements behind many communities, including various interest groups, conspiracies, and opaque bad debts. It is not a high - quality fuel for the growth of property management companies.

After the real - estate development companies defaulted, the affiliated property management companies either sold off their assets or provided financial support. However, the money of property management companies can only relieve the urgent need, not save the day.

Now, property management companies are facing growth challenges themselves, and their primary goal has become to save themselves. Therefore, in the past two years, several listed property management companies have desperately tried to distance themselves from the group's real - estate development business to show their independence.

Let you die on your own. Refuse to die together.

01 

Before 2021, real - estate development companies looked down on the scale of property management companies.

Previously, although real - estate enterprises also pursued diversification and told the story of the "second growth point", it was more for the capital market.

It is said that during a group meeting of a real - estate enterprise that once entered the first echelon, representatives from various regions and business lines reported in turn. The property management business was often arranged last. When it was their turn to speak, the boss would go out and transfer to a dinner party.

In the first half of 2021, the average profit of listed property management companies was only 280 million yuan, and the highest profit was only about 1 billion yuan.

The profit of property management companies was nothing in the eyes of the headquarters of real - estate enterprise groups with hundreds of billions in scale. After a round of soaring housing prices, the profit from developing a large - scale project could exceed the annual profit of an entire property management company.

At that time, real - estate development enterprises desperately provided financial support to property management companies to achieve high growth and high valuation.

In 2021, well - known merger and acquisition cases included: Country Garden Services successively acquired Bluetown Services, Cailife's Neighborhood Services, and R&F Properties Services; Vanke Property Service (Wanke Yun Wu Ye) acquired Sunshine Smart Services and Boen Property Services; China Resources Mixc Lifestyle acquired Yujia Lifestyle and Zhongnan Property Services; and CIFI Yongsheng Services acquired Macalline Property Services.

Country Garden Services carried out 3 acquisitions, spending approximately 18.7 billion yuan, which brought an increase of about 280 million square meters in the managed area, helping Country Garden Services reach the highest market value since its listing and the highest share price of HK$84.11 per share.

Flowing capital is the hottest blood in the stock market. Moreover, property management companies naturally have a cash - rich parent company that provides both money and new projects (newly delivered communities by the major shareholder).

According to data from the China Index Academy, by the middle of 2021, the average price - earnings ratio of the property management sector in the Hong Kong stock market reached 34 times, and the price - earnings ratio of some enterprises even exceeded 100 times. The price - earnings ratio even exceeded that of many Internet companies, showing an independent trend.

After that, the story took another turn. Real - estate development enterprises such as Evergrande siphoned funds from affiliated property management companies. The concern that real - estate development enterprises would drag the property management business into the abyss triggered the first round of valuation adjustment.

When real - estate development enterprises were no longer able to "subsidize" property management companies through funds, mergers and acquisitions, or direct project allocation, the growth rate of the managed area of the latter declined rapidly.

Taking Country Garden Services as an example, its newly added contracted area in 2021 - 2024 was 430 million square meters, 240 million square meters, 120 million square meters, and 60 million square meters respectively. (Data from the China Index Academy)

The rapid decline in the growth rate and the questioned logic of growth brought by value - added services led to the second round of valuation adjustment for listed property management companies.

According to a research report released by Guotai Junan Securities on April 16, 2025, the average PE of the 22 listed property management enterprises it focused on tracking in 2025 was 8.93 times.

It is only about 1/4 of that four years ago.

02

Recently, Zhao Xiao, the deputy general manager of China Merchants Property Operation and Service Co., Ltd., published an article, pointing out that there is a disconnect between the past capital - driven approach (such as pursuing scale and statement data) and the "value - driven" approach that the property management industry really needs in the future.

General Manager Zhao said that the influx of capital once promoted the rapid expansion of the industry. It attracted attention through high profit margins and beautiful financial reports, creating a "fad effect". However, the support of capital also brought two direct problems: First, the competition became extremely fierce. High profits attracted more participants, intensifying market involution. Second, it brought a certain trust crisis. Property management enterprises relied on capital to inflate their financial statements while claiming "losses" to try to raise prices, facing doubts from property owners about cost transparency (for example, if listed property management enterprises have high profits but individual projects claim to be in the red, where are the losses? How can they convince property owners to agree to a price increase?).

The past high growth and high profits of property management companies were based on the premise that real - estate development enterprises directly handed over a large number of newly delivered houses to affiliated property management companies. The market development cost was relatively low, the growth was predictable, and the management and maintenance cost of newly delivered houses was low.

With the continuous aging of houses and the continuous weakening of the support from real - estate parent companies, the living environment of property management enterprises has changed dramatically.

Property management companies need a new story line and also need to regain confidence in the market and themselves.

Some enterprises have chosen the technology narrative, such as Vanke Property Service (Wanke Yun Wu Ye).

Some enterprises have chosen to reduce costs and increase efficiency, such as Poly Property Services.

Property management projects related to the government, large enterprises, and co - construction have also become the focus of competition.

Property management enterprises have shifted from the previous rapid expansion to "returning to the essence of operation and downplaying scale".

However, at the same time, property management companies are still facing huge pressure to retain existing projects.

On Xiaohongshu, a netizen said that their community is planning to replace the currently cooperating Vanke Property Services. The homeowners' committee wants lower prices and better services.

Whether this represents the will of the property owners or the interests of the homeowners' committee, under the public opinion hotspot of "reducing property management fees", the calls from property owners across the country to "replace property management companies" have reached an unprecedented high, which has become a phenomenon worthy of attention.

The performance pressure on property management companies has intensified. There is a game of interests between property management companies and property owners. There is a contradiction between the excessive service provided by enterprises in the early stage and the demand for profit improvement in the later stage. There are also the intensity of the follow - up work for affiliated real - estate development enterprises and the negative impact. A large number of contradictions are showing signs of breaking out.

As the halo fades, the fragile side of this ecosystem is revealed. There is a wobbling balance in front of property management companies.