The property management industry is gradually transitioning toward a more sustainable business model characterized by "moderate volume-price adjustments and relatively stable cash flow," according to a research report by CICC. In the short term, covered companies remain in a growth phase driven by scale expansion, with steady revenue and profit growth, slightly pressured cash collection, and increasing dividend payouts. The firm recommends high-quality stocks with stable performance, strong cash flow, and attractive dividend yields.

**Key Takeaways from CICC:** 1. **Industry Transformation Driven by Internal & External Factors** The report highlights accelerated two-way selection between property management firms and property owners, leading to optimized project portfolios. This shift is expected to transition the sector from "volume-driven growth" to "sustainable development led by reasonable pricing adjustments."

2. **Moderating Growth Phase** CICC forecasts that core property management services—contributing 70%-80% of total revenue—will drive a 10% CAGR for major covered firms in 2025-2026. Growth will primarily rely on stable annualized new contract values, implying sustained moderate expansion. Non-core segments are likely to drag overall revenue growth, with total revenue projected to rise ~7% annually.

3. **Profitability Supported by Efficiency & Tech** Despite mild revenue growth, proactive cost controls and technology adoption may help sustain profitability.

4. **Cash Flow & Shareholder Returns** While cash collection rates dipped by 1.1pp in 2024 and 0.9pp in 1H25, firms maintain robust liquidity—year-end 2024 cash holdings ranged from RMB 4.7–14.1 billion (39%-68% of market cap), with operating cash flow at 1.6x net profit. CICC expects continued shareholder-friendly policies in 2025-26, with some covered stocks offering 5%-6% yields.

**Risks:** Faster-than-expected market contraction or greater pressure on fee collection rates.