Real Estate SaaS Ming Yuan Cloud Opens to Public Subscription
Transfering from NEEQ to the Hong Kong Exchange, China’s biggest real estate SaaS company is now available for global investors.
Ming Yuan Cloud (00900:HK) has been approved for an IPO on Hong Kong Exchanges and is available for the public. The 20-year-old company was traded on NEEQ from 2015 to 2019. Offering ERP and SaaS solutions to real estate developers, Ming Yuan Cloud has the largest market share of around 25% in China by its contracted sales value.
Ming Yuan Cloud focuses on the real estate and provides SaaS (Software-as-a-Service) and ERP (Enterprise Resources Planning) services to the industry. Cloud-based services cover from marketing, property management to real estate development. From its statement, over 90 out of China’s top 100 property developers are its clients, contributing 42% of total revenue in 2019. Ming Yuan Cloud’s revenue increased from CNY 580 million in 2017 to CNY 1,264 million in 2019.
For all SaaS companies, retention is a critical index to indicate their capability of making profits. With respect to the top 100 property developers, ERP solutions and SaaS products' revenue retention rates were 149% and 138% respectively in 2019, while the customer account retention rates were 87% and 96%.
Real estate development in China is consolidating as the CR10 increased from 17% in 2015 to 27% in 2018. Ming Yuan Cloud’s revenue retention rates echoed to the consolidating tendency as the revenue retention rate is relatively high with respect to the top 100 property developers; customer account retention is 87%.
China’s real estate industry has been soaring throughout this century. The commercial housing’s GFA (gross floor area) increased by 8,938 km^2, around 11 New York City size. The real estate developer CR4 further expanded in China. For instance, the real estate titan Country Garden (02007:HK) reported revenue growth of 28.18% in 2018-2019 from CNY 379.08 billion to CNY 485.91 billion. Behind developers’ optimistic financial numbers, the increasing commercial housing projects offer a ground for real estate SaaS to grow. Vertical SaaS services providers like Ming Yuan Cloud can benefit from the growing industry.