Green property management co., Ltd.
Lansi Green Life has a management scale of about 1780 square meters as of June 2021 (according to third-party statistics, the area has increased to 2500 square meters by the end of 2021), which is mainly located in the Yangtze River Delta region, accounting for about 85 per cent of the total area under management. Following the group's green development strategy, the company is one of the leading enterprises in China's green property management subdivision track.
Langshi Group is very concerned about risk control. In its early years, it did not increase leverage significantly to increase its scale, and its net leverage ratio has remained below 65% in the past five years. As a result, Langshi Green Life, as the group's property management business platform, has also benefited. We give the company a target valuation of 10 times 2022 price-to-earnings ratio, which is equivalent to the average valuation of medium-sized property management companies in the industry in the past, with a target price of HK $3.9 per share, with a buy rating for the first time.
Summary of the report
Green property Management Company. Lansi Green Life has a management scale of about 1780 square meters as of June 2021 (according to third-party statistics, the area has increased to 2500 square meters by the end of 2021), which is mainly located in the Yangtze River Delta region, accounting for about 85 per cent of the total area under management. Longshi Group was established in early 2001, has been deep ploughing long triangle, and in 2004 began to implement the focus on green technology differentiation development strategy, brand awareness continues to improve. Lansi Green Life was established in 2005, following the group's green development strategy, according to the data of the middle finger academy, according to the proportion of green buildings certified by two stars or more, the company ranks third among the top 100 property service enterprises in China.
The project structure has been further improved. In terms of the distribution of project sources, the proportion of related housing enterprises has gradually declined. Projects from third-party developers accounted for about 42% of the total managed area and 39% of the revenue of the basic property management services division in the first half of 2021, which were 16.6% and 16.6% respectively in 2018. After listing, the company has a budget of about 140 million yuan on mergers and acquisitions, and is determined to acquire SHKP indirectly at the end of 2021 with an area of 6.39 million square meters. In terms of the format of the project, it is mainly residential projects, accounting for about 87.8% of the income of the basic property management service division. However, the company will further develop the diversification of the property management portfolio of non-residential properties. The ability of multi-industry property management will make Lansi Green Life become a comprehensive property management service provider.
The parent company group is sound. Longshi Group is very concerned about risk control. In the early years, there was no significant increase in leverage to offset the scale. The net leverage ratio of real estate companies has remained below 65% since 2017, and real estate companies have expanded their market share through low-risk small-share trading. According to Corey data, Longshi Real Estate ranked 60th with trading sales of about 46.5 billion yuan in 2021. Although the growth rate of sales scale is slower than that of other medium-sized housing enterprises, it shows that the Group attaches importance to sustained and stable operation, which also benefits Lansi Green Life, which is the group's property management business platform.
First buy rating. First buy rating. Although Lansi Green Life accounts for a relatively low share of community value-added services, with the deployment of multi-industry formats of the group, it is expected to improve gradually in the future. The company plans to further enrich the existing value-added services and add innovative services such as home economics, home care for the aged, beauty housing and other services. The company is currently valued at about 12 / 8 times the 2021 / 22 price-to-earnings ratio, which is lower than other medium-sized property management companies. Taking into account the sound development of Lansi Green Life and its group, we give the company a target valuation of 10 times 2022 P / E, which is equivalent to the past average valuation of medium-sized property management companies in the industry, with a target price of HK $3.9 per share.
Risk hint: the competition in the outbound market of M & An is becoming more and more fierce; profitability needs to be improved.
