CICC released a research report stating that state-owned enterprises and non-defaulted private enterprise-affiliated companies achieved 7.1% year-over-year revenue growth and 10.1% year-over-year core net profit growth in 1H25, which broadly aligned with the firm's expectations. However, performance trends among defaulted private enterprise-affiliated companies showed divergence. The industry's overall interim dividend distribution situation showed slight differentiation while generally meeting expectations. In the long term, the firm remains optimistic about leading enterprises with high-quality project portfolios, strong market-oriented operations, and robust capabilities to capture additional market share. Regarding defaulted private enterprise-affiliated companies, while associated company risks are being released in stages, the firm believes that property management companies' own business operations will still face quality differentiation in development, advising value investors to pay attention to related risks.

CICC's main viewpoints are as follows:

Industry Growth Enters Steady Phase Covered state-owned enterprises and non-defaulted private enterprise-affiliated companies primarily rely on basic property management services to drive overall growth, with this segment accounting for an average of 77% of revenue and achieving an average year-over-year growth of 10% in 1H25. Most companies' other business segments acted as growth drags. In terms of new contract acquisitions, related enterprises maintained roughly flat year-over-year performance on average, while project withdrawal ratios showed slight increases overall, implying that future growth rates will continue to remain moderate. Regarding profitability, related enterprises' core/net profit margins remained stable or showed slight improvements year-over-year, primarily reflecting the impact of internal quality enhancement and efficiency improvements.

Internal and External Factors Catalyze Industry Ecosystem Improvement In recent years, the industry's collection rates have faced certain marginal pressures, combined with price volatility impacts, labor cost uncertainties, and other external factors, as well as the natural aging of managed project portfolios. The firm believes that bilateral selection between property management companies and served property owners will accelerate. On one hand, owners will increasingly organize themselves to advocate for services that match quality with pricing and premium pricing for premium services. On the other hand, companies will more proactively eliminate underperforming projects and enhance asset portfolio quality to achieve more sustainable long-term development. In the long term, as this bilateral selection deepens and property management companies continuously optimize their managed portfolios, enterprise development models are expected to gradually transform from "volume growth with flat pricing and pressured profitability" toward "sustainable profit growth led by reasonable and moderate price changes."

Active Shareholder Returns Increasingly Become Consensus Among Listed Companies Collection rates and accounts receivable turnover days indicate that industry cash collection conditions face slight marginal pressure but remain relatively manageable, with companies maintaining full-year cash flow targets. The firm believes that companies' dividend and share buyback activities will continue to maintain an overall positive stance on a full-year basis.

Risks Internal and external industry pressures may be stronger than expected in certain periods.