UOB Kay Hian
Date of Report: Thursday, 4 September 2025
China Property Management Sector 1H25: Slowed Growth, Cash Flow Concerns, and Top Picks Revealed
Executive Summary: Sector Under Pressure, SOEs Lead, PPS Emerges as Top Pick
The Chinese property management (PM) sector reported slower growth for the first half of 2025, marked by rising cash collection challenges and a continued divergence in performance between state-owned enterprises (SOEs) and private-owned enterprises (POEs). While SOEs outperformed POEs in profitability and cash metrics, the entire sector faces mounting pressure from declining value-added services, weaker operating cash flows, and intensified third-party competition. UOB Kay Hian maintains an UNDERWEIGHT stance on the sector, with Poly Property Development (PPS) named as the top pick due to resilient expansion and superior cash metrics.
Sector Overview: Key Financial Metrics and Trends
The latest half-year results for 10 major listed PM companies underscore a challenging environment:
- Average revenue growth: 3.5% YoY
- Gross margin: down 0.8ppt to 18.5%
- Core net profit: up 5.6% YoY
- Dividend payout ratio: steady at 50%
- Cash on hand: down 3.6% YoY
- Accounts receivable: up 9.1% YoY
- Managed GFA: up 4.6% YoY
- Average net cash/close price ratio: 0.4x
SOEs vs POEs: The Performance Gap Narrows, But Risks Remain
SOEs continue to outperform POEs in revenue growth (3.7% vs. 1.8% YoY), margin stability (0.1ppt vs. -2.6ppt), and core net profit growth (9.0% vs. -17.1% YoY). This is largely due to SOEs’ ability to shed low-margin projects and control SG&A expenses. While the divergence between SOEs and POEs has narrowed slightly since the end of 2024, POEs remain under greater pressure, particularly in lower-tier cities where cash collection is weaker.
Growth Drivers and Sector Headwinds
- Revenue Slowdown: Attributed to declining value-added services (VAS), fierce third-party expansion competition (e.g., CR Mixc’s contracted GFA up just 1.3% YoY, Greentown down 2.9%), and voluntary exits from low-margin contracts (e.g., CMPS down 4.4%, A-living down 10.9%).
- Cash Collection Risks: Sector-wide, cash on hand dropped 3.6% YoY. POEs saw a steeper -15.4%, while SOEs grew by 10%. Notably, CR Mixc and CGS recorded substantial cash declines of 15.5% and 18.9%, respectively.
- Receivables: Grew at a faster pace than revenue, heightening working capital risk.
- Operating Cash Flow: OCF/Net Profit ratio worsened from -0.4x in 1H24 to -0.6x in 1H25 (SOEs: 0.0x, POEs: -2.3x), underscoring deteriorating cash conversion especially among POEs.
2025 Outlook and Sector Strategy
All covered companies reaffirmed their 2025 guidance, with a focus on margin improvement and profit growth outpacing revenue. Despite stable dividend payout ratios in 1H25, ongoing concerns about third-party competition and cash collection persist. UOB Kay Hian maintains an UNDERWEIGHT sector call, shifting its top pick from CR Mixc to PPS for its robust third-party business, strong cash ratios, and expected dividend upside.
Peer Comparison: Valuation, Growth, and Yield Metrics
| Company |
Ticker |
Rec |
Share Price (HK\$) |
Target Price (HK\$) |
Upside (%) |
Market Cap (HK\$ m) |
PE 2026F |
PE 2027F |
P/B 2026F |
P/B 2027F |
Yield 2026F (%) |
Yield 2027F (%) |
| CR Mixc Lifestyle |
1209 HK |
HOLD |
38.38 |
41.05 |
7.0 |
87,602.4 |
17.0 |
15.3 |
4.7 |
4.7 |
5.9 |
6.6 |
| China Overseas Property Holding |
2669 HK |
BUY |
5.20 |
7.00 |
34.6 |
17,076.6 |
9.6 |
9.5 |
2.2 |
1.9 |
3.8 |
3.8 |
| Poly Property Development (PPS) |
6049 HK |
BUY |
34.44 |
42.60 |
23.7 |
19,056.8 |
10.8 |
10.4 |
1.5 |
1.4 |
4.7 |
4.8 |
| Country Garden Services |
6098 HK |
HOLD |
6.42 |
5.74 |
-10.6 |
21,464.5 |
7.1 |
7.6 |
0.5 |
0.5 |
4.3 |
3.9 |
Company-by-Company Analysis
CR Mixc Lifestyle (1209 HK): Margin Stability Amid Slowing Growth
- Managed GFA: 420m sqm in June 2025 (+5.5% YoY)
- Contracted GFA: 452m sqm (+1.3% YoY)
- Revenue growth: 6.5% in 1H25 (down from 17.8% in 1H24), 2025E: 11.0%
- Core net profit growth: 15.0% in 1H25 (down from 24.2% in 1H24), 2025E: 17.0%
- Dividend payout ratio: 100% in 1H25, 2025E: 100%
- Dividend yield: 2025E: 5.1%, 2026E: 5.9%
- Cash on hand: RMB 13,042m (-15.5% YoY)
- Net cash/close price ratio: 0.16x
CR Mixc maintains a HOLD recommendation due to stable margins but faces slower growth and weaker cash metrics.
China Overseas Property Holding (2669 HK): Steady Performer with Attractive Upside
- Managed GFA: 436m sqm (+3.2% YoY)
- Revenue growth: 3.7% in 1H25 (down from 9.0% in 1H24), 2025E: 3.3%
- Core net profit growth: 4.3% in 1H25 (down from 16.0% in 1H24), 2025E: 3.7%
- Dividend payout ratio: 39% in 1H25, 2025E: 39%
- Dividend yield: 2025E: 3.6%, 2026E: 3.8%
- Cash on hand: RMB 5,666m (+13.2% YoY)
- Net cash/close price ratio: 0.38x
With a BUY rating, COPH offers solid upside and dividend yield, supported by healthy cash growth.
Poly Property Development (PPS, 6049 HK): Top Pick for Expansion and Cash Strength
- Managed GFA: 834m sqm (+10.2% YoY)
- Contracted GFA: 996m sqm (+4.9% YoY)
- Revenue growth: 6.6% in 1H25 (down from 10.2% in 1H24), 2025E: 6.8%
- Core net profit growth: 5.3% in 1H25 (down from 10.8% in 1H24), 2025E: 5.4%
- Dividend payout ratio: 0% in 1H25, 2025E: 50%
- Dividend yield: 2025E: 4.5%, 2026E: 4.7%
- Cash on hand: RMB 11,665m (+10.0% YoY)
- Net cash/close price ratio: 0.67x (highest among peers)
As the sector top pick, PPS stands out for its resilient expansion, robust cash position, and potential for dividend growth.
Country Garden Services (CGS, 6098 HK): Impairment Risk and Profit Decline
- Managed GFA: 1,153m sqm (+5.2% YoY)
- Revenue growth: 10.2% in 1H25 (up from 1.5% in 1H24), 2025E: 2.9%
- Core net profit growth: -14.8% in 1H25 (worse than -31.7% in 1H24), 2025E: -4.5%
- Dividend payout ratio: 0% in 1H25, 2025E: 60%
- Dividend yield: 2025E: 4.5%, 2026E: 4.3%
- Cash on hand: RMB 9,723m (-18.9% YoY)
- Net cash/close price ratio: 0.44x
CGS faces high impairment risk, with operating cash flow turning negative YoY and persistent decline in core net profit due to deteriorating efficiency and shrinking margins. The stock is rated HOLD as risks remain elevated.
Key Financial Indicators Table
| Company |
Managed GFA (Jun 24, m sqm) |
Managed GFA (Jun 25, m sqm) |
YoY Change (%) |
Contracted GFA (Jun 23, m sqm) |
Contracted GFA (Jun 24, m sqm) |
YoY Change (%) |
| CR Mixc |
398 |
420 |
5.5% |
446 |
452 |
1.3% |
| COPH |
423 |
436 |
3.2% |
/ |
/ |
/ |
| PPS |
757 |
834 |
10.2% |
950 |
996 |
4.9% |
| CGS |
1,096 |
1,153 |
5.2% |
1,730 |
n.a. |
n.a. |
Dividend, Cash, and Profitability: Key Metrics
| Company |
Revenue Growth 1H24 |
Revenue Growth 1H25 |
2025E |
Core NP Growth 1H24 |
Core NP Growth 1H25 |
2025E |
Payout Ratio 1H24 |
Payout Ratio 1H25 |
2025E |
Div Yield 2025E |
Div Yield 2026E |
Cash on hand 1H24 |
Cash on hand 1H25 |
YoY Change |
Net Cash/Price (3 Sep 25) |
| CR Mixc |
17.8% |
6.5% |
11.0% |
24.2% |
15.0% |
17.0% |
105 |
100 |
100 |
5.1 |
5.9 |
15,430 |
13,042 |
-15.5% |
0.16 |
| COPH |
9.0% |
3.7% |
3.3% |
16.0% |
4.3% |
3.7% |
34 |
39 |
39 |
3.6 |
3.8 |
5,005 |
5,666 |
13.2% |
0.38 |
| PPS |
10.2% |
6.6% |
6.8% |
10.8% |
5.3% |
5.4% |
0 |
0 |
50 |
4.5 |
4.7 |
10,605 |
11,665 |
10.0% |
0.67 |
| CGS |
1.5% |
10.2% |
2.9% |
-31.7% |
-14.8% |
-4.5% |
0 |
0 |
60 |
4.5 |
4.3 |
11,986 |
9,723 |
-18.9% |
0.44 |
Conclusion: Strategic Exits and Quality Focus, but Cautious Outlook
The Chinese property management sector is entering a phase of quality-focused growth, with companies streamlining portfolios and prioritizing margin improvement over aggressive expansion. While SOEs retain an edge and PPS stands out for its resilience, sector-wide risks from cash collection, receivables, and OCF conversion persist. Investors should remain selective, focusing on firms with robust cash positions, prudent project selection, and visible dividend growth potential.
