Author | Anjou Cao

Editor | Zhou Zhiyu

Property companies were once the darling of the capital market, but now that the tide of the industry has receded, they also need to start again and find their own breakthrough through the industry cycle.

Zhu Baoquan, chairman of Wanwuyun, believes that now is a good time for property companies to get out of the independent market.

At the annual shareholders' meeting on May 10, Zhu Baoquan said that in the current Chinese real estate market, the gradual shift from basic property operations to deep asset management (AM) is an excellent opportunity for property managers and building managers.

Zhu Baoquan pointed out that an asset-light property enterprise has reached the present day, and its future development will require iterative upgrading.

During his research trip to Japan, Yamato House left a deep impression on him. Yamato Housing switched from apartment operation to helping landowners develop customized, design return on investment, and provide a package of services. “In other words, if late-stage operations can participate with early transformation parties, it will also make these asset-heavy investments more effective with less.”

According to Zhu Baoquan, if property companies can expand upward and reverse order real estate and facility investments, then it will form a completely different pattern. Just like Yamato Housing, it can ensure that rental apartments can achieve 90% of accounts receivable, and it also strengthens one's own investment capacity.

Today, after mastering the most basic property operation and management, how to extend to higher levels of asset management and fund management is what Wanwuyun is thinking and practicing. This is also about whether Wanwuyun can take the lead in breaking through the industry's current difficulties and getting out of the independent market.

Zhu Baoquan proposed that 2023-2025 will be a watershed moment for the industry. If property companies want to overcome the watershed and move from the end of the real estate development industry chain to a new era of consumption based on real estate holdings, they need to get rid of path dependency.

This is also an important way for property companies to get out of the shadow of real estate development cycle adjustments and achieve a return to value.

In 2018-2020, as the real estate industry made great strides over the years, the scale of leading housing enterprises soared, and the value of the property management sector of housing enterprises soared, the property industry also ushered in a boom in listing and mergers and acquisitions.

However, as the real estate development industry enters a downward cycle, the income and gross profit of property companies from related entities have all dropped sharply, and the stock prices of property companies have also fallen.

For today's real estate companies, if they want to survive and live well, it's not enough to simply expand the residential property business, or buy back up their holdings and save stock prices. There is an urgent need to start at the root cause and change the business model so that the capital market can establish a new value evaluation model for them.

The China Index Research Institute points out that in recent years, innovative services such as urban services, IFM (integrated facility management), and commercial operations have risen strongly, opening up more room for imagination in the property management industry. As the independence of listed property companies increases and related party risks are gradually cleared, the value of property stocks is expected to return.

Zhang Hongxi, Secretary General of the Shenzhen Property Management Industry Association, also predicts that in the future, businesses with strong cycles and high levels of real estate development will gradually decline out, favoring businesses with strong sustainability, such as group meals, facility and equipment services, and asset services related to stock housing, etc., and gradually form differentiated competitiveness in market segments.

Only by waking up from the fervent dream of making wealth with capital can we see the true value core of the enterprise, and changes are imperative.

When the property sector is spun off from the parent company of housing enterprises, reducing dependency and growing independently is the proper meaning. It's just that the real estate industry cycle adjustments have accelerated this process.

As a leading real estate company that achieved the first increase in both revenue and core net profit since its listing last year, holding 15.6 billion dollars in cash and without bank loans, Wanwuyun is a good pioneer.

Today, breaking out of the Red Sea of basic property management and jumping into the big blue ocean market of asset management, Wanwuyun wants to boldly break through. This is an unprecedented challenge for the industry. Although it has a long way to go, it has taken the lead and set off this industry transformation.