Author | Cao Anxun
Editor | Zhou Zhiyu
When it comes to star players in the property management industry, Wanwu Cloud, which originated from the leading real estate company Vanke and achieved the largest IPO on the Hong Kong Stock Exchange last year, is definitely well-known.
However, the deep adjustment in the real estate industry over the past two years has caused property stocks, which were once hot in the capital market, to fall from grace, and Wanwu Cloud is no exception. However, when we set aside the filter of capital, we can actually see the true value and efforts of a company, which are highlighted by Wanwu Cloud in a weak market.
Wanwu Cloud has long since freed itself from its reliance on its parent company, Vanke Group, with nearly 70% of its projects coming from external sources. With innovations based on big data, the breaking of community barriers, and the &#34;Butterfly City&#34; regional service network within a 3-kilometer radius, Wanwu Cloud has made more substantial breakthroughs and contributed more to its performance.
Wanwu Cloud is revolutionizing the traditional property management industry and embarking on an immeasurable path as a technology company.
On August 25th, Zhu Baoquan, Chairman of Wanwu Cloud, said at the interim performance conference, &#34;A good appearance is inherited from one's parents, good character is inherited, but a good physique is achieved through one's own efforts,&#34; which vividly reveals the competitive strength of Wanwu Cloud along the way.
In the first half of 2023, when the market was weak, Wanwu Cloud achieved growth in both revenue and net profit against the trend.
The interim report shows that Wanwu Cloud achieved operating income of 16.02 billion yuan in the first half of the year, a year-on-year increase of 12.5%, ranking second among listed property companies, second only to Country Garden Services; net profit was 1.05 billion yuan, a year-on-year increase of 15.7%, and the gross profit margin increased by one percentage point to 15.1% compared to the end of last year; cash and cash equivalents reached 12.34 billion yuan, with no bank loans or borrowings.
Looking at the business segments, revenue from residential consumer services in community spaces was 9.04 billion yuan, a year-on-year increase of 13.0%; revenue from comprehensive services for commercial enterprises and urban spaces was 5.67 billion yuan, a year-on-year increase of 11.3%; revenue from AIoT and BPaaS solutions and services was 1.32 billion yuan, a year-on-year increase of 13.9%.
The increase in profit is attributed to the smooth progress of the Butterfly City strategy. Wanwu Cloud is no longer floating in the clouds but is down-to-earth, exploring the future of the industry. This is particularly rare in the current weak market.
In Zhu Baoquan's view, after six months of development, the Butterfly City strategy, which is seen as the core strategy of Wanwu Cloud for the next 10 years, has been successfully implemented. In the first half of the year, under the empowerment of the Butterfly City strategy, the gross profit of Vanke's residential property service business improved, with a year-on-year increase of 34.3%, and the overall gross profit margin increased by 2.1 percentage points compared to the same period last year.
Yang Guanghui, Chief Customer Officer of Wanwu Cloud, revealed that as of the end of June, the total number of Butterfly Cities in Wanwu Cloud has increased to 601, with an increase of 17 Butterfly Cities in the first half of the year; a total of three batches and 150 Butterfly Cities have undergone process transformation, covering over 1,000 residential projects.
Yang Guanghui disclosed that the overall operational efficiency and benefits can be improved by 4 percentage points through the transformation of Butterfly City processes. In the first half of this year, the overall gross profit increase from the efficiency improvement of Butterfly Cities reached 104 million yuan.
The ecological overlay of Diecheng has also contributed to the performance of Wanwu Cloud. The interim report shows that Wanwu Cloud has carried out house renovation business in 40 Diechengs, with a contract amount of 160 million yuan, a year-on-year increase of 70.5%.
Wanwu Cloud revealed that since the promotion of the Diecheng strategy, it has invested a total of 300 million yuan in the process transformation of Diecheng, which has increased the gross profit margin of basic residential properties in the transformed Diecheng by more than 4 percentage points, with an efficiency improvement amount of 100 million yuan in the first half of the year. Southwest Securities stated that in the first half of the year, the Diecheng strategy accelerated its implementation, and the effect of improving quality and efficiency was verified, which helped improve the company's profitability.
This also gives Wanwu Cloud the confidence to explore new territories in the stock market. Yang Guanghui said, &#34;The realization of the Diecheng model and the gradual release of Diecheng's benefits have provided us with an operational foundation and greater confidence in expanding in the stock market.&#34;
Under the empowerment of the Diecheng strategy, Wanwu Cloud is increasingly showing its ambition to break away from its reliance on developers and traditional physical enterprises and hopes to open up more diversified and efficient profit models and tap into the second half of the game.
&#34;If we only accept projects developed by Vanke Real Estate for residential properties, it would be relatively easy, but it is not so easy to enter the stock market, which is why we have the Diecheng renovation project. Whether it is Diecheng renovation, Wanwu Liangxing, or technological investment, these are all aimed at paving our own path of self-development,&#34; said Zhu Baoquan.
This also enables Wanwu Cloud to have the ability to develop independently.
Currently, 69% of Wanwu Cloud's projects come from third parties; the proportion of related transactions with Vanke has gradually decreased to 13.6%. In the first half of the year, the income contributed by third parties accounted for 85.5% of the property and facility management service revenue.
Zhu Baoquan emphasized that the relationship between Vanke and Wanwu Cloud is complementary, and Wanwu Cloud will provide services for projects developed by Vanke in sync. &#34;Parents raise you to enable you to grow independently in society, while carrying the good genes and traditions of the family.&#34;
Looking ahead, Shenwan Securities stated that Wanwu Cloud, backed by Vanke, has significant advantages in technological empowerment, residential expansion, deep cultivation of Diecheng, and expansion of commercial and enterprise city services. Against the backdrop of increasingly refined management in the property management industry, it is expected that Wanwu Cloud's performance will enter a growth period. Southwest Securities predicts that the scale effect of Wanwu Cloud's &#34;Diecheng&#34; will gradually become apparent, and profits are expected to continue to improve in the next two to three years.
As a property management industry closely related to real estate, when the real estate industry was booming, the property management industry once experienced a frenzy of listing and soaring business. However, in the overall downturn of the real estate industry, it has also been significantly affected, with most property enterprises experiencing a decline in revenue and facing severe challenges to their independence.
However, in the old normal where one should prosper together and suffer together, top property enterprises like Wanwu Cloud have still managed to forge their own path against the trend. This is the &#34;awakening era&#34; of the property management industry and a new gold mine for top developers outside of real estate. At that time, property enterprises will continue to break through the bottlenecks brought by the traditional real estate industry and move towards a broader world.
This will be a brand new story. The curtain of the trillion-dollar property management market has been raised, waiting for the leaders of various property enterprises to compete and write their own chapters.
Everything in the cloud will also show its strength in the new world after building a strong foundation.

Cloud Weak Market "Building Muscles"