Broker: UOB Kay Hian
Date of Report: 25 July 2025

China Property Management 1H25 Outlook: CR Mixc Takes the Lead Amid Sector Headwinds

Introduction: Sector Update and Strategic Shifts

The first half of 2025 brings mixed prospects for China’s property management (PM) sector. State-owned enterprises (SOEs) maintain stable business performance, while private-owned enterprises (POEs) continue to face heightened operational pressures. UOB Kay Hian maintains an UNDERWEIGHT rating on the sector, citing a lack of major catalysts and limited upside after recent dividend hikes. Notably, CR Mixc emerges as the new top pick, overtaking China Overseas Property Holdings (COPH), reflecting evolving dynamics in residential and commercial contract growth.

CR Mixc (1209 HK): Robust Commercial Momentum, High Dividends

• Commercial Segment: CR Mixc’s malls are expected to deliver tenant sales growth of approximately 15–20% year-on-year in 1H25. Same-store tenant sales are forecast to grow in the high single digits, up from 4.6% in 2024. This solid performance is attributed to economies of scale, driving further improvements in gross profit margin for the commercial management segment.
• Challenges in Property Management: The property management arm faces a slowdown, with value-added services (VAS) weakening and weighing on both revenue growth and gross profit margin.
• Dividend Policy: CR Mixc stands out for its high dividend payout ratio. The company typically announces a one-off special dividend at year-end, but in 2025, this will be split between interim and year-end periods to ensure payout consistency.
• Financials and Valuation: The target price is raised to HK\$42.90, supported by a lower WACC (now 9.0%). For 2026E, revenue is estimated at RMB 21,534 million (+13.7% YoY), with core net profit at RMB 4,682 million (+14.9% YoY). The target 2026 PE ratio is 18.9x, and the dividend yield is forecast at 5.8% for 2026 and 6.5% for 2027.

CR Mixc Key Financials

China Overseas Property Holdings (COPH, 2669 HK): Stability Amid Slower Expansion

• Revenue and Profit: COPH is expected to see slight year-on-year revenue growth in 1H25, with profit growth outpacing revenue due to margin improvements in basic PM and community VAS.
• External Expansion: The pace of new contract wins from third parties is slowing due to rising competition, making it harder to replicate the RMB 1,034 million in contracts signed in 1H24.
• Dividend Outlook: The interim dividend payout ratio for 2025 is not expected to grow significantly. While earnings remain broadly stable, the slower external expansion tempers the potential for more aggressive dividend policies.
• Financials and Valuation: The target price is raised to HK\$7.35 (WACC trimmed to 11.7%). 2026 revenue is estimated at RMB 15,809 million (+5.9% YoY), with core net profit at RMB 1,723 million (+6.4% YoY). The target 2026 PE is 12.7x, and dividend yields are projected at 3.6% for 2026 and 3.8% for 2027.

COPH Key Financials

Poly Property Services (PPS, 6049 HK): Cost Controls and Resilient Growth

• Third-Party Projects: PPS anticipates positive growth in new orders from third-party projects in 1H25, while its core property management business remains stable.
• VAS Contribution: The contribution from value-added services to both revenue and gross profit is expected to decline.
• Cost Management: Further improvements are expected in cost control and the SG&A expense-to-revenue ratio.
• Collection Ratio: The management fee collection ratio is under pressure due to a weak macro environment, yet PPS remains on track to achieve at least 5% growth in revenue and net profit.
• Financials and Valuation: The target price is increased to HK\$42.60 (WACC reduced to 10.6%). 2026 revenue is estimated at RMB 18,707 million (+7.2% YoY), with core net profit at RMB 1,605 million (+3.3% YoY). The target 2026 PE is 13.3x, and dividend yields are forecast at 4.4% for 2026 and 4.6% for 2027.

PPS Key Financials

Country Garden Services (CGS, 6098 HK): Recovery Delayed by Margin Pressure

• Growth Drivers: CGS expects high single-digit total revenue growth in 1H25, up from 3.2% in 2024, with the three supplies and property management businesses serving as key growth drivers.
• Margin and Cost Challenges: Gross profit margins across all segments are set to decline further from 21.2% in 1H24, with worsening cost controls and continued operating cash flow pressure.
• Impairment Risks: The risk of goodwill and receivables impairment remains high, especially given the contraction of the city services segment and potential increases in provisions for accounts receivable. A sustainable recovery will take more time to materialize.
• Financials and Valuation: The target price is raised to HK\$5.74 (WACC sharply reduced to 19%). For 2026E, revenue is projected at RMB 46,220 million (+2.1% YoY), but core net profit is expected to decline to RMB 2,747 million (-5.3% YoY). Target 2026 PE stands at 6.3x, with dividend yields at 3.9% for 2026 and 3.6% for 2027.

CGS Key Financials

Sector-wide Insights and Peer Comparison

• Dividend Payouts: Major PM companies have significantly increased their dividend payout ratios in 2023–24, leaving little room for further hikes. For instance, CR Mixc’s payout ratio is set at 100%, while COPH, PPS, and CGS have ratios of 36%, 50%, and 32% respectively in 2024.
• Strategic Focus: The sector is shifting from rapid, volume-driven expansion to high-quality development, with a focus on operational efficiency.
• Lack of Catalysts: With slowing growth in new residential contracts and resilient retail sales in malls, the industry faces a lack of new drivers at both the company and sector level.
• Valuation Table:

Conclusion: Navigating a Maturing Market

China’s property management sector is transitioning into a phase of quality-driven growth, driven by efficiency rather than expansion. CR Mixc stands out as the sector’s preferred pick, thanks to its robust commercial performance and high dividend payouts, even as value-added services slow. COPH and PPS offer relative stability amid external pressures, while Country Garden Services faces ongoing challenges, especially around margin and impairment risks. With sector-wide catalysts lacking and dividend upside now limited, investors must focus on operational resilience and shareholder returns as the new drivers of value in 2025 and beyond.