As the real estate policy side continues to release multiple positive news, various signals indicate that the most difficult time for real estate is over.

However, as an important link in the real estate industry chain, after going through this round of fluctuating market cycles, property has also changed from extensive previous growth to high-quality development.

As the saying goes, it is only when there is a big wave that scavenges the sand before one sees the truth. At a time when the industry landscape is evolving, how to improve healthy development is probably a problem facing all property companies today.

On December 20, Kangqiao YueLife (hereinafter referred to as “Happy Life” or the “Company”, stock code: 02205) issued an announcement stating that it will officially resume trading at 9 a.m. on December 21. Obviously, this resumption of trading also means that the company has gradually overcome the adverse reactions brought about by the related trading turmoil.

However, it is not a coincidence that Happy Life was able to overcome this fluctuation safely, but due to the positive effects of the company's long-term accumulation. Next, you might as well use this as an observation sample. Through the company's reopening of trading, you can explore in depth what “plotting actions” Happy Life has made.

Drive high-quality growth with “three product lines”

As mentioned earlier, the property industry has experienced a profound transformation along with fluctuations in the real estate industry, that is, from extensive growth driven by scale to high-quality development driven by content.

Among these, the business focus of almost the entire industry has also invariably changed.

According to Kerry's incomplete statistics, in the first half of 2023, nearly 60% of listed property companies have carried out organizational adjustments of varying degrees, mainly focusing on the three keywords “more streamlined, flatter, and more professional.” In addition to reducing costs and increasing efficiency, property companies are also targeting various business formats other than the residential sector, such as commercial properties, public construction, and urban services.

At this time, Happy Life is also continuing, striving to expand horizontally from traditional residential property formats to non-residential properties and urban service product lines.

Specifically, the Zhitong Finance App learned that Happy Life has formed three product lines: “Happy Life,” “Happy Business Management,” and “Yuecheng Service,” and has built an ecological value system where people, communities, industrial cities, and cities are interconnected and supported. Different product lines implement different levels of brand classification. For example, under the residential product line “Happy Life”, there are “Happy Service, Happy Service, and Happy Service” for different levels of housing business and case service.

In the process of rapid development, YueLife anchors various aspects of development benefits through insight into customer needs. Specifically, on the one hand, YueLife focuses on the asset operations and product premiums of “big owners” to solve the product planning and sales of their new homes, parking spaces and stores, and enhances its product premium capabilities through case sites, advance agencies, consulting and technology services; on the other hand, it strives to enhance owners' needs for a better life through asset management and community life around “small owners”, and provides second-hand housing sales, asset custody and loan services. It also meets the needs of different owners through explosive group purchases, domestic home improvement, smart parking and smart charging.

Through the above layout, up to now, the Happy Life business covers a variety of property types, including residential properties, non-residential properties (such as commercial, office buildings, industrial parks, etc.) and urban services (such as rail transit sanitation, urban sanitation, hospitals, schools, and other public infrastructure services). Each business has developed in a balanced manner in many rounds.

Of course, these diverse business formats and quality services not only promote YueLife to have strong competitive barriers to cope with industry changes, but also make its performance extremely resilient.

In the first half of 2023, YueLife's core financial data all achieved steady growth. It recorded revenue of 445 million yuan, an increase of 19.6% over the previous year, and net profit of about 60 million yuan, an increase of 4.9% over the previous year.

Among them, the scale of Yuexi Life Property Management continued to maintain a growth trend, laying a solid foundation for the company's future growth and development — during the period, the number of projects under management reached 252, and the company's contracted construction area was about 65.5 million square meters, an increase of 7.2% over the previous year, of which about 52.7 million square meters came from third-party property developers, accounting for 80.5%. The construction area under management was about 36.9 million square meters, an increase of 25.1% over the previous year, of which about 29.4 million square meters came from third-party property developers, accounting for 79.6%. In addition, the construction area under management of non-residential properties was about 6.1 million square meters, an increase of 57.6% over the previous year. Judging from public data, in 2021, 2022, and the first half of 2023, YueLife's related transactions accounted for 32.7%, 13.9%, and 9.3% respectively, showing a downward trend year by year, while the proportion of construction area under management from third parties was 73.4%, 78.7%, and 79.6%, respectively, showing a steady upward trend. These not only demonstrated YueLife's strong market-based expansion capabilities, but also meant that YueLife had basically broken away from its dependence on related parties' businesses.

More specifically, in the first half of the year, with the gradual recovery of the economy, demand in the field of value-added services for the Happy Life Community was also greatly released. During this period, it recorded revenue of 74.264 million yuan, an increase of 25.4% over the previous year, accounting for about 16.7% of total revenue. This shows that YueLife has better met customer needs with high-quality services, thus attracting more owners and residents to choose the company's community value-added services, which in turn promoted resilient performance growth.

In addition, in the first half of this year, Happy Life City's service revenue also reached 284.02 million yuan, an increase of 192.9% over the previous year. This strong growth trend also means that the company has successfully expanded in the field of urban services, which in turn has also opened up new growth space for the company.

Based on the above, it can be seen that at a time when the property industry is undergoing profound adjustments, YueLife has promoted high-quality growth through better services and more diversified business formats.

Using “smart technology” to promote quality and efficiency

If “Yue Service” provides a solid foundation for the certainty of Happy Life's performance, then “Smart Technology” has increased the company's profit margin from another dimension.

As we all know, property management services are labor-intensive industries. They require a large amount of labor to provide various services such as security, cleaning, gardening, and maintenance. In turn, labor costs have also become one of the biggest costs and expenses among asset-light property companies. According to data from the Central Index Institute, the proportion of labor costs of the top 100 property management companies in average operating costs rose from 53.4% in 2016 to 58.4% in 2021. As of 2022, many property management companies' employee costs and expenses remain high. In the face of rising labor costs, digital transformation is an effective means of helping management companies reduce costs and increase efficiency.

Furthermore, with the continuous development of digital technology, the use of digitalization to improve the level of scientific refinement of community governance has also gradually become the consensus for industry development. Earlier, “Opinions on Further Promoting the Construction of Smart Communities” issued by nine departments including the Ministry of Civil Affairs, the Ministry of Housing, Urban-Rural Development, and the Ministry of Agriculture and Rural Affairs launched an “important shot” of policies to promote the digital transformation of the property management industry. Since then, various regions have responded and introduced policies related to the construction of smart communities. It can be said that smart communities are becoming one of the main trends in the future development of the industry.

In view of this development trend, Happy Life also closely revolves around the company's business in digital construction, which has prompted the company to break away from the traditional management model that requires a large amount of manpower, and has achieved the effects of reducing costs and increasing efficiency and increasing profits.

Specifically, on the one hand, the company uses technological means to improve overall business operation efficiency and further build a core competitive advantage.

For example, in the field of online customer service support, YueLife has further optimized the Group's 400 centralized call system and Kangyun Youjia applet, providing richer and more convenient touchpoint tools. In the field of improving internal operating efficiency, YueLife combines the continuous expansion of business formats and scenarios to comprehensively restructure and optimize the quality management system to provide a more lightweight, efficient and data-based management system. However, through the positive effects brought about by the above technological means, the per capita management area, net profit per capita, and personnel cost rate of Yuexiu all increased significantly compared with the data for the same period in 2022.

On the other hand, YueLife has also further enriched the company's business format through multi-faceted exploration of cutting-edge application scenarios such as the Internet of Things.

After the basic framework for the smart community was built, Happy Life also closely followed cutting-edge application scenarios such as the Internet of Things and artificial intelligence to fully meet the living needs of customers. Among them, there is no shortage of fields including smart parking and community e-commerce. For example, YueLife continues to promote the deployment and implementation of various systems such as parking, pedestrian traffic, sky eye, and elevator control, making every effort to ensure the safety of behavior in customer parks. While enriching the company's business format, it has also broadened the company's growth curve.

Furthermore, from the perspective of management efficiency, the act of actively building a smart community will obviously also bring more dimensional significance to a pleasant life.

On the one hand, smart property management systems can achieve information-based management and implement comprehensive, real-time monitoring of management areas. Compared to relying only on manual management, smart networks can centrally process and transmit information and data, promote coordination and quality of communication between departments, and effectively improve management efficiency. On the other hand, using smart platforms to connect people, equipment, and services not only saves manpower working hours and makes service processes more simplified, but also reduces expenses in various areas, bringing better economic management benefits to property enterprises.

Judging from the various layouts described above, in the context of the development of the property management industry to digital transformation, Happy Life follows industry trends to build a smart community. In addition to increasing the company's technical barriers, it is clear that it is also further opening up the company's profit margins through improving quality and efficiency.

epilogue

Continued persistence in the dimensions of quality service and smart technology has clearly enabled Happy Life to build its own strong brand effect.

On December 6, Happy Life won the “Most Socially Responsible Listed Company” award at the “8th Zhitong Financial Capital Market Annual Conference and Listed Company Award Ceremony”. The award honors Hong Kong and US listed companies that have made positive contributions to precise poverty alleviation, ecological protection, and charitable donations for their efforts to implement social responsibilities, actively fulfill their responsibilities to consumers, communities and the environment. And the fact that Happy Life won this award also further highlights the attention and recognition of the industry and investors for actively fulfilling its responsibilities to consumers, communities, and the environment.

Seen from this perspective, the high-quality growth characteristics presented by Happy Life through various business formats, quality services, and technological empowerment have undoubtedly made its development quite meaningful in the current market environment. In the short term, Happy Life can deal with the uncertainty of the external environment with internal certainty; in the medium to long term, high-quality demand and high-quality supply are like precision cogs, becoming a long-term driving force for continued high-quality growth in Happy Life.