Focusing on resilient growth, improving quality and efficiency, Kangqiao Yue Life (02205) is poised to enter a new cycle of development

At a time when the real estate industry is undergoing deep adjustments, the investment logic of the Hong Kong stock property management sector has been completely restructured. Once upon a time, the market sought a growth model of scale expansion and reliance on deliveries from housing companies' parent companies, but now capital places more emphasis on new directions such as profit quality, market-based outreach capabilities, and level of corporate governance.

On August 26, Kang Qiaoyue Life (02205) announced its 2026 interim results. In the first half of the year, the company achieved revenue of about 470 million yuan, an increase of 3.2% over the previous year, gross profit of about 106 million yuan, an increase of 8.0% over the previous year, and the overall gross margin increased to 22.6%, an increase of 1 percentage point over the previous year. Against the backdrop of a slowdown in the overall growth rate of the industry, the hidden structural changes behind this questionnaire have become a focus worth examining.

Looking at Kang Qiaoyue Life's revenue trajectory over a longer period of time. From the first half of 2021 to the present, the company's revenue has gone through a complete cycle of rapid growth to a smooth transition. From 2021 to 2024, when the property industry was still in a large-scale expansion phase, Kang Qiaoyue Life's median revenue growth rate of nearly 20% once achieved a remarkable growth rate of nearly 20%. Since entering 2024, with the release of downstream real estate risks, the overall revenue growth rate of the industry has declined markedly. In this context, Kangqiao Yue Life was able to achieve a revenue growth rate of 3.2%, which is already very steady.

What is more noteworthy is that this growth rate is based on improved business quality — Kang Qiaoyue Life did not drive the scale through price cuts or credit policy relaxation, but was achieved by steady growth in the core business property management services. The sector's revenue during the period was about 380 million yuan, accounting for about 80.8% of total revenue, an increase of 7.4% over the previous year. The contrarian growth in core businesses has effectively hedged the risk of industry fluctuations and firmly established a basic operating market.

The performance of gross profit and gross margin further revealed substantial improvements in the quality of the company's operations. With revenue growing by only 3.2%, gross profit grew by 8.0%, which is significantly ahead of revenue growth. Overall gross margin bucked the trend and rose to 22.6%, an increase of 1 percentage point over the previous year.

Looking at the horizontal comparison, according to data from the China Index Research Institute, the average gross margin of listed property companies in 2025 was only 17.84%, and it continues to decline in the context of overall pressure on the industry. Kang Qiaoyue Life bucked the trend and climbed to 22.6%, nearly 5 percentage points higher than the industry average, verifying the company's deep efforts in cost control and project optimization. During the period, the company's sales costs increased by only 1.9% year on year, far below the revenue growth rate. It can be seen that cost reduction measures such as energy-saving transformation and smart operation are gradually being implemented.

By sector, the gross margin of the four major businesses increased or remained flat across the board. The gross profit margin for property management services was 21.9%, an increase of 0.7 percentage points over the previous year, and the gross profit margin for non-landlords value-added services was 29.3%, a sharp increase of 3.8 percentage points, reflecting the structural optimization results of the company actively shrinking low gross profit and poor payback businesses.

As the industry shifts from “competing for scale” to “competing for quality,” the continuous improvement in business gross margin is more persuasive than simple scale growth — it means that enterprises no longer rely on inefficient expansion and accumulation figures, but actually have the ability to increase unit output through refined operations.

If performance restoration answers the question of “how now”, then the structural optimization of Kangqiao Yue Life responds to the deep logic of “why is it possible.” In this financial report, Kang Qiaoyue Life's core focus is its highly market-based business structure, which is also an important moat that distinguishes it from most Hong Kong stock real estate companies. As of the first half of 2026, the company's contract area was about 70 million square meters, and third-party developers accounted for 82.0%; with a managed area of 47.9 million square meters, third parties accounted for 78.2%, and related parties only accounted for 0.7% of revenue. The significance of these figures is even more prominent when examined in the industry coordinate system.

In the past few years of deep adjustments in the real estate industry, a large number of property management companies that rely on blood transfusions from related parties have fallen into the dilemma of “not daring to lose the parent company's projects and not being able to obtain external projects.” However, Kang Qiaoyue Life relied on structural adjustments to actively reduce low gross profit and poor payback businesses in the early years, but instead gained a window of opportunity to seize high-quality third-party projects during the industry clean-up process.

According to Kerui Property Management data, the average management ratio of listed real estate company contracts in 2025 was 1.2, while Kang Qiaoyue Life's index was 1.46, which is superior to the industry average. This means that the company not only has the ability to acquire customers independently, but also has sufficient room for stock conversion.

This kind of “independence dividend” is a compound benefit effect: during periods of industry turmoil, independent marketability can be transformed into a competitive advantage for projects; and the acquisition of more high-quality third-party projects further strengthens the company's independence and forms a positive cycle. When the industry entered the era of “fighting for power,” Kang Qiaoyue's early life seemed to “suffer losses” and actively decoupled; instead, it became its most valuable asset.

Furthermore, in the first half of the year, the company successfully completed a board change. The new board of directors faced up to issues with an honest and pragmatic attitude, comprehensively strengthened the internal control system, and built a strong line of defense for compliant management. Facing the future, the new board of directors will lead the company through the cycle and move steadily and far-reaching with a more professional and independent governance attitude.