＜Research＞JPM: Homeowners in Chongqing Demand Mgmt Fee Cut; Spread of Action to More Cities Will Pressure Profits of Property Managers

　　JPMorgan highlighted in a research report that since June, homeowners in several districts of Chongqing have demanded to lower their management fees, and the trend is on the rise. Most of the requests have been unsuccessful so far, and the broker has not seen similar requests in other parts of the country.

　　JPM believed that the impact was still under control. However, if the situation spreads to other cities, it may indeed put pressure on the profitability of property management companies.

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　　The broker also pointed out that the process of lowering management fees is not easy, and that there is not much room for adjustment as the gross margins of most property managers are already in the low mid-single digit range. The broker said the move could be one of the means by which the industry seeks to improve service standards, but it would keep a close eye on the situation.

　　Among the major players, JINKE SERVICES (09666.HK) -0.080 (-1.090%) has the biggest presence in Chongqing, and if the situation were to spread nationwide, CHINA RES MIXC (01209.HK) -0.550 (-2.386%) Short selling $24.45M; Ratio 23.871% would be the least affected, while GREENTOWN SER (02869.HK) -0.030 (-0.882%) Short selling $1.43M; Ratio 21.911% would be the most affected, the broker said.

　　The broker said it wouldn't be surprised to see some short-term pressure from these fee cut demands, but considered the state of the residential property market to remain a bigger driver of the stock price. The broker still favoured POLY PPT SER (06049.HK) -0.200 (-0.755%) Short selling $1.17M; Ratio 6.094% .

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　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-23 16:25.)

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