In the transformation of China Minsheng Investment Group (CMIG), what is the current development condition of CMIG Futurelife Holding Group Co. Ltd. (hereinafter referred to as CMIG Futurelife) as its “pillar” sector? Recently, President Sun Zhefeng of CMIG Futurelife was interviewed by the reporter from Shanghai Securities News, disclosing for the first time their business layout and progress of community commercial platform to the outside world.
Property Investor Platform Taking Shape
CMIG Futurelife was founded closely following CMIG, both in 2014. As a first-level subsidiary of CMIG, CMIG Futurelife is an important platform for CMIG in their layout of community consumption upgrade.
In just five years, CMIG Futurelife has already made preparations and take actions in the field of community commerce.
Sun Zhefeng told the reporter that this platform was positioned mainly as “the builder of intelligent community and the guardian of family wealth”. In short, it is to transform communities with Internet technology and provide services in community, inclusive finance and home-based elderly care for residents.
Recalling the development path of CMIG Futurelife over the past five years, the entry point for building the above platform is anchored in the community. The specific approach is to merge and integrate the mature and high-quality property management companies in the first and second tiered cities of China, operate them in a fine manner by endowing them with capitals, capabilities and intelligence through funds, management and information technology, hoping to build a huge offline community flow system and provide services in inclusive finance and home-based care.
Over the past few years, CMIG Futurelife has held and shared nearly 20 property companies across the country, of which more than 50% are non-residential properties, including government-funded office buildings, universities and rail transits, commercially-operated office buildings, and the rest are residential properties. “Macro Home, the leading public property management company in China, manages properties like Chinese Art Museum and Shanghai Hongqiao Junction West Transport Center, which are also our assets.” Sun Zhefeng introduced that CMIG Futurelife, currently the largest property investor in comprehensive industry forms in China, mainly focused on investment in the first stage, gradually turned into operation since last year, and would start the listing of property companies at an opportune moment in the next stage.
Data show that there are about 120,000 property management companies nationwide and 13 listed in Hong Kong Stock Exchange. However, most of them generally lack funds to expand the scale, which, on the contrary, are often small and scattered with extensive management. Therefore, CMIG Futurelife will continue to expand in this field, export technology and management, and speed up development in larger scale.
As for the inclusive financial service sector, CMIG Futurelife has obtained the licenses for private equity funds, fund sales, insurance broker, and micro-loans through applications and acquisitions, and the layout of offline branches began to take shape. In September 2017, the company further added a business sector in home-based care services, and carried out related layout in the capital market.
Making Profits in Community Business
There is a series of commercialized layout aiming at the community by CMIG Futurelife, which is one of the main development directions of CMIG. Lv Benxian, President of CMIG, first stated to the outside world in August last year that CMIG was undergoing strategic transformation: investing in others’ innovative business model and cultivating their own (urban community service sharing platform and rural revitalization service sharing platform) based on current industrial resources and application scenarios. He also revealed that it was precisely based on this direction of transformation that CMIG had already begun to sell part of their assets.
In Lv Benxian’s view, it is a service entrance and platform of great value to provide high-quality services to tens of millions of community residents by the labor force through property companies.
For the construction of this entrance and platform, a clear business logic can be concluded from the above-mentioned business sector of CMIG Futurelife, which is to build new business forms, such as health management, home-based care for the aged, intelligent travel mainly about shared parking and environmentally-friendly car washing, modern community services and community inclusive finance, based on existing community property as the fundamental assets and focusing on consumption upgrade.
As a matter of fact, in the last kilometer to residents, community commerce has not been deeply excavated in the process of consumption upgrading compared with neighboring countries such as Japan and Korea, and has a huge profitability. In recent years, this field has attracted large real estates, Internet giants and retailers to join the “food robbing games”.
Comparatively speaking, CMIG Futurelife has chosen a distinctive route. “Investing in property companies, taking root in the community, building a platform on our own soil to attract leading enterprises in the field of new retail and service to the community and providing fine services.” Sun Zhefeng said that the core was basic property and value-added services aiming at C-end, including entrepreneurial plans for employees of property companies.
However, will the rapid acquisition and integration of property companies with capital, which just entered the operational stage last year, lead to excessive debt for CMIG Futurelife? In this regard, Sun Zhefeng said that these property companies were very good interest-bearing assets, especially non-residential properties. The annual cash flow was very good every year, and the net profit could maintain a growth of over 10% approximately.
Lv Benxian mentioned earlier that after several years of cultivation, CMIG were gradually entering the period of investment return in business sectors like community life services.
By the end of June 2018, the business income of CMIG Futurelife has reached 3.525 billion yuan. It is reported that in the next three years, CMIG Futurelife will further increase investment, striving to double the area managed by CMIG holding property companies, and the direct service population is expected to reach 50 million people. “We hope that in China, the first thing people come up with when mentioning community, is CMIG Futurelife.” Sun Zhefeng said.