Events. The company publishes its semi-annual report for 2021. During the reporting period, the company realized operating income of 1325.0 million yuan, an increase of about 78.8% over the same period last year. The company's net profit increased by about 209.1 million yuan, an increase of 75.6% over the same period last year.
The company's revenue mainly comes from the provision of property management services, pre-delivery and consultancy services, community value-added services and smart solution services. Of this total, revenue from property management services was 565.2 million yuan, an increase of 54.9 percent over the same period last year; revenue from pre-delivery and consulting services was 552.5 yuan, an increase of 126.5 percent; revenue from community value-added services was 97.6 million yuan, an increase of 64.7 percent over the same period last year; revenue from smart solution services was 109.6 million yuan, an increase of 50.2 percent over the same period last year.
The total contracted construction area and total managed construction area of property management are about 120.9 million square meters and 86.3 million square meters respectively, an increase of about 56.4% and 50.1% respectively over the end of 2020. On December 27, 2020, the company entered into a sale and purchase agreement with an independent third party for the acquisition of a 60% stake in Zhejiang Ruiyuan property Management Co., Ltd., whose main business is to provide property management services for residential, commercial and other non-residential properties. In January 2021, the company completed the acquisition of Zhejiang Ruiyuan, which managed a total of 84 projects, with a contract construction area of about 11 million square meters.
According to the 2021 semi-annual report, as of the first half of 2021, the company's property management services have covered 53 cities in 17 provinces, municipalities and autonomous regions in China, with a total construction area of 86.3 million square meters and a total property management quantity of 649, including 278 residential areas and 371 non-residential properties.
Investment advice: the country's leading supplier of integrated property management services, maintaining a "better than the market" rating. The company specializes in providing comprehensive urban integrated services for middle and high-end properties, and focuses on metropolitan areas with high economic development vitality supported by national macro strategic policies. We estimate that the EPS of the company from 2021 to 2023 is 2.00,2.70,3.47 yuan respectively. With reference to the valuation of similar comparable companies, the company is given a dynamic price-to-earnings ratio of 16-20 times in 2021, with a reasonable value range of HK $38.17-47.72 (RMB32.0-40.0, the midpoint of the Hong Kong dollar exchange rate is 0.83826 RMB / HK $) and rated as "better than the market".
Risk hint. The risk of rising labor cost; the risk of excessive concentration in the region; the risk of value-added business expansion is not as expected.
