Income and profit are growing rapidly. In 2021, the company's revenue was 3467.1 million yuan, an increase of 37.3% over the same period last year. In 2021, the profit attributable to the company's shareholders was 510.1 million yuan, an increase of 57.0% over the same period last year. The board of directors recommended the payment of a cash dividend of HK17.38 cents per share for the final period of 2021 and HK36.00 cents per share for the full year, an increase of 278.5% year-on-year.
The area in the tube promotes the increase of property management income. In 2021, the revenue from basic property management services was 2630.8 million yuan, accounting for 75.9% of revenue, an increase of 24.6% over the same period last year. At the end of 2021, the company's contract area was 56.8 million square meters, an increase of 26.9 percent over the same period last year. The company's managed area was 41.2 million square meters, up 28.7% from the same period last year, of which commercial properties accounted for 43.5%, public and industrial properties accounted for 22.5%, and residential properties accounted for 34.0%.
The increase in in-tube area was mainly due to: (I) the company continued to take over commercial and residential projects developed by Precious Real Estate Group Co., Ltd., adding 4.5 million square meters in the reporting period; (ii) third-party expansion contribution increased by 4.7 million square meters. At the end of 2021, the area of the project was divided by region, of which 43.1% was located in Guangdong-Hong Kong-Macau Greater Bay Area, 22.8% in the Yangtze River Delta urban agglomeration, and 34.1% in other regions. Business property revenue in 2021 increased by 25.5% compared with the same period last year. Among them, business property revenue from excellent group increased by 22.3% year-on-year, and business property revenue from third-party market expansion increased by 27.4% year-on-year. In 2021, public property revenue increased by 7.1% compared with the same period last year, while residential property revenue increased by 44.6% over the same period.
The performance of value-added services is strong, while that of other businesses is relatively low. In 2021, the revenue from value-added services was about 780.5 million yuan, an increase of about 117.7 percent over the same period last year, accounting for 22.5 percent of revenue, an increase of about 8.3 percentage points over 2020. The growth in value-added services mainly benefited from: (I) increased revenue from real estate co-marketing, pre-introduction and acceptance inspection services; (ii) increased revenue from mechanical and electrical installation services; and (iii) increased provision of high-end business services and corporate administrative welfare platform services. In 2021, other business income increased slightly to 55.8 million yuan, accounting for 1.6% of revenue.
The gross profit margin of the company increased slightly, of which the gross profit margin of value-added services increased. Gross profit margin rose from 26.3% in 2020 to 27.7% in 2021. The gross profit margin of basic property management services was 22.9%, down 1.2 percentage points from 2020, mainly due to the suspension of the regulatory support policy of reducing and reducing social insurance contributions in 2020. The gross profit margin of value-added services was 41.5%, an increase of 6.9% over 2020, mainly due to (I) the increase in the proportion of the company's high gross profit margin value-added business, and (ii) strengthening cost control to form economies of scale and effectively improve gross margins. The gross profit margin of other businesses was 60.7%, up 5.0 percentage points from 2020, mainly because the operation of apartment rental projects has improved compared with 2020.
Investment advice: maintain a "better than the market" rating. We estimate that the company's EPS from 2022 to 2023 will be 0.54,0.65 yuan respectively. We value the company's 2022 target at 11-14XPE, with a reasonable value range of 5.94-7.56 yuan (HK $7.29-9.28) and a "better-than-market" rating.
Risk hint. The expansion of management scale is not as expected, the key customer strategy is not as expected, and labor costs are rising.
The exchange rate is 1 Hong Kong dollar = 0.81472 RMB.