Matters:
The company announced its 2021 semi-annual report. In the first half of the year, it achieved operating income of 6.13 billion yuan, a year-on-year increase of 55.9%, and net profit of 380 million yuan, an increase of 840.2% over the previous year, corresponding to an EPS of 0.16 yuan, which is at the upper limit of the performance forecast range.
Peace view:
There was a sharp increase in performance due to multiple factors: 2021H1's revenue was 6.13 billion yuan, up 55.9% year on year, and net profit from parent company was 380 million yuan, up 840.2% year on year. Among them, second-hand housing revenue was 3.59 billion yuan, up 71.2% year on year; new housing revenue was 1.1 billion yuan, up 70.8% year on year; and common house revenue was 960 million yuan, up 30.5% year on year. All businesses achieved high-quality development. The reasons for the high performance increase are as follows: 1) the results of the expansion strategy were evident, and operating results continued to improve; 2) the same period last year affected by the COVID-19 pandemic was low; 3) Other earnings increased by 44.72 million yuan year on year, and credit impairment losses decreased by 39.7 million yuan year on year.
All racetracks go hand in hand, and scale expansion continues to accelerate: 2020H1's final business covers 35 cities including Beijing and Hangzhou, has a total of 4,500 stores, and a total of 53,000 employees. The direct management business strengthens the advantageous regional layout of North China and East China, and conducts partnership experiments on the basis of the existing direct management model to further bind interests and stimulate potential. The franchise business accelerated, covering 10 cities at the beginning of the year to 22 cities; the number of stores increased from 1,094 to 1,870 at the beginning of the year, a growth rate of 71%, which had exceeded 2,000 by August. At the end of the year, 2021H1 managed 246,000 units, an increase of about 10,000 units over the beginning of the year. The average number of days left was 8.3 days, and the occupancy rate was 95.7%. It continued to improve and continue its leading edge in the industry. At the same time, Xiangyu is also exploring the output of asset-light management capabilities. The “light hosting model” designed for the Shenzhen apartment market was implemented and put into operation in the first half of the year, and all 3,500 registered properties were rented out.
Digitalization accelerates business transformation and empowers business efficiency: The company has formed three digital product groups for customers, direct management, and franchise. By continuously increasing investment in the official website, integrating customer databases, and intelligently matching transaction targets, we drive traffic conversion at both ends of the tenant. The performance of 2021H1's official website reached 35.1%, up 8.2 percentage points from 2020H2. Use AI to empower integrated management capabilities, guide agents to act positively, and take multiple measures to empower stores and improve personnel efficiency.
Investment suggestions: Maintaining the original forecast, the company's EPS is expected to be 0.26 yuan, 0.3 yuan, and 0.35 yuan respectively from 2021-2023, and the corresponding PE at the current stock price is 13.2 times, 11.3 times, and 9.8 times, respectively. As a leading enterprise in the real estate brokerage and housing rental industry, the company has obvious business synergies, and is expected to fully benefit from the era of deep regional cultivation and management barriers, which are expected to fully benefit from the housing stock era. At the same time, offline store growth goals are clear, online and offline integration and platform-based construction have opened up new momentum for growth and maintained “recommended” ratings.
Risk warning: 1) Changes in the competitive environment and industry sentiment may cause store expansion to fall short of expectations. At the same time, the creation of new stores may face problems such as insufficient collaboration between first-tier and second-tier work and low system support efficiency; 2) If the scale of real estate transactions falls short of expectations due to insufficient resilience in subsequent demand, the company's size growth will be affected; 3) there is a risk that the housing delivery cycle will be lengthened and the occupancy rate will decline.