Company Reports

Greentown Service Group was established in 1998 in Hangzhou mainly for the provision of property management services to Greentown China. GSG operates in three major business segments: (1) property management services; (2) community value-added services; and (3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

Greentown Service Group's first-half revenue and operating profit rose 6% and 16% year on year, respectively, driven by improved cost efficiency and margin expansion. While property service revenue grew 10%, community living service revenue dropped 7% on sluggish demand.

Major Chinese property developers, including state-owned China Overseas Land and Investment and China Resources Land, have had 15%-25% gains in share prices since April 28. That said, the sales value of the top 100 developers slid by 19% year on year in January-April 2026, per third-party data.

Greentown Service Group's revenue rose 7% year on year in 2025, driven by strong growth in property management fee income. The firm's recurring operating margin expanded to 9.8% in 2025 from 8.4% in 2024, supported by operating leverage and improved labor cost efficiency.

Greentown Service Group, or GSG, was established in 1998 in Hangzhou mainly for the provision of property management services, or PMS, to Greentown China. GSG operates in three major business segments: 1) property management services; 2) community value-added services, or VAS, and 3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

According to the National Bureau of Statistics, China's new home sales value declined by 11% year on year in January-November 2025. At the recent Central Economic Work Conference, the government reiterated its commitment to stabilizing the property market and clearing excess housing inventory.

Greentown Service Group, or GSG, was established in 1998 in Hangzhou mainly for the provision of property management services, or PMS, to Greentown China. GSG operates in three major business segments: 1) property management services; 2) community value-added services, or VAS, and 3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

Greentown Service Group, or GSG, delivered 6% and 25% year-on-year growth in revenue and operating profit, respectively, for the first half of 2025. Margin expansion was driven by operating cost optimization and improved profitability in its property management business.

Country Garden Services and Greentown Service Group posted 11.8 million and 15.7 million square meters of new floor area under management in the first half of 2025, respectively, as per China Index Academy. This implies a 1% year-on-year growth for CGS and 2% growth for GSG.

Greentown Service Group, or GSG, was established in 1998 in Hangzhou mainly for the provision of property management services, or PMS, to Greentown China. GSG operates in three major business segments: 1) property management services; 2) community value-added services, or VAS, and 3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

Country Garden Services, or CGS, reported a CNY 1.8 billion net profit for 2024, in line with its profit alert. Meanwhile, Greentown Service Group's, or GSG's, 13% year-on-year net profit growth for 2024 beat our estimate due to stronger revenue expansion and better cost management.

Country Garden Services, or CGS, has incurred a CNY 0.8 billion-CNY 1.1 billion impairment of goodwill and intangible assets in 2024, mainly due to the unfavorable outcome of prior expansion and extended receivable days on its subsidiary, Manguo Environmental Technology.

China’s Ministry of Housing and Urban-Rural Development, along with the Ministry of Finance and other authorities, announced new measures on Oct. 17 to stabilize the property market. We think the most significant directive pertains to upsized credit support to stalled projects, as overall funding will increase to over CNY 4 trillion by the end of 2024 (CNY 2.2 trillion loans approved as of Oct. 17). We expect an acceleration in loan disbursement with distressed developers receiving more funds, which should prop up homebuyers’ confidence, in our view. However, the market may be disappointed by the lack of new incremental stimulus, except reiteration of local governments’ autonomy to relax buying curbs. Despite 5%-17% share price declines in property names following the conference, our longer-term thesis is unchanged: We expect new-home sale prices to bottom around mid-2025 with a mild rebound thereafter. This is supported by easing on borrowing costs, absorption of excess inventory, and further fiscal support on property buying.

We think the recent buying frenzy in China real estate names was induced by incremental policy easing and investors’ reignited sentiment, rather than a rebound in durable home demand. While policy relief has lifted home sales in select key cities, this may be short-lived as home price weakness will likely persist amid oversupply. We also believe that new directives will pose a limited impact on less wealthy cities, given their already loosened homebuying curbs. As such, we reiterate our view that nationwide new home sales value and prices should stabilize in mid-2025 as excess inventory is absorbed, and maintain our fair value estimates for our China property sector coverage.

Greentown Service Group, or GSG, was established in 1998 in Hangzhou mainly for the provision of property management services, or PMS, to Greentown China. GSG operates in three major business segments: 1) property management services; 2) community value-added services, or VAS, and 3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

We keep our fair value estimate for Greentown Service Group at HKD 4.20 but cut Country Garden Services’ to HKD 6.60 from HKD 9.00, given the latter’s underperformance in earnings growth for first half 2024. While GSG delivered a robust 31.0% year-on-year operating profit growth, CGS’ operating profit saw a 22.3% drop due to more headwinds in margins of property management and developer-related services. CGS’ receivable days in the first half also rose to 206 from 185 as of December 2023, but GSG’s days remained lower at 127, given its higher-quality developer clients. We raise our 2024 operating profit estimate for GSG by 12% while maintaining most of our long-term assumptions. Conversely, we cut our midcycle operating margin forecast on CGS by 180 basis points to 6.0% as we do not foresee a major turnaround in its profitability. Given the prolonged liquidity strains on most developers, we also revised our steady-state receivable days assumption on CGS up to 260 days from 240.

We view the recent favorable measures for the China real estate sector, including the scrapping of buying curbs in wealthy cities and the unwinding of the mortgage rates floor, as encouraging to homebuyers and investors. That said, we caution that potential buyers may remain on the sidelines amid falling home prices, and policy tailwinds will likely require a longer time to translate into a pickup in home sales. Additionally, although the CNY 500 billion in loans—backed by a relending facility from China’s central bank—to local state-owned enterprises for converting completed but unsold properties to affordable units should help clear excess inventory, execution risks remain, in our view. While the policy-induced rally has reflected the market sentiment shift, we maintain the valuations of stocks under our coverage, given industry fundamentals that are still weak. Despite a more demanding sector valuation, we think shares of state-owned developers such as China Overseas Land & Investment and China Resources Land remain attractive. We continue to prefer both names, given their more resilient contracted sales and better financial strength.

We lower our fair value estimates for Country Garden Services, or CGS, to HKD 9.00 per share from HKD 17.50, and for Greentown Service Group, or GSG, to HKD 4.20 from HKD 5.20, given a more conservative outlook for their margins and revenue growth. CGS reported an 85% net profit decline for 2023 due to compressed gross profit and a write-off on receivables. While GSG outperformed with 11% bottom-line growth, operating margin also contracted amid provisions for financial assets. Given the slower cash collection from developers, we lift our receivable days assumptions for both firms. We also cut our midcycle operating margin forecasts on CGS to 7.8% from 12.2%, and on GSG to 7.7% from 8.0% ,amid rising competition and labor cost.

Greentown Service Group, or GSG, was established in 1998 in Hangzhou mainly for the provision of property management services, or PMS, to Greentown China. GSG operates in three major business segments: 1) property management services; 2) community value-added services, or VAS, and 3) property consulting services and VAS to nonproperty owners. We consider GSG one of the leading property management and VAS providers in China, with business strength in the Yangtze River Delta.

We published our inaugural China real estate industry pulse for the first quarter of 2024 with the view that housing demand should gradually recover through 2026, supported by ongoing policy tailwinds. While new home sales in China remained sluggish in 2023, the nationwide average price was steadier due to a continuing mix shift to wealthier regions with more resilient prices. Moreover, we like the ramping-up of supportive measures since the second half of 2023 and expect further easing in buying restrictions and mortgage rate cuts in large cities. While share price performances could remain volatile in the near term, we see an improving risk/reward profile at the current valuation as the market may be missing key developers' improving sales outlooks. As such, we prefer top state-owned builders, China Overseas Land & Investment and China Resources Land, as both have seen better sales growth, higher asset quality, and healthier gearing ratios versus their peers.