Main points of investment
Maintain the "buy" rating with a target price of HK $53.00: the company's area under management has grown rapidly, the penetration of value-added services has further increased, urban services and commercial operations have increased, and all businesses have maintained rapid growth. the strategy of large property + large community is actively promoted. The company's accounts receivable and intangible assets grew rapidly in 2021. At present, 73% of the 10.6 billion accounts receivable are due in 0180 days. It is recommended to focus on the recovery of receivables and the progress of goodwill impairment. We estimate that the operating income of the company in 2022, 2023, and 2024 will be 435, 76.3 billion yuan respectively, an increase of 50.7%, 35.1%, 29.8%, and a year-on-year increase of 43.4%, 33.1%, 26.7%, respectively. Maintain the "buy" rating, with a target price of HK $53.00, corresponding to 2022 PE in 2023, which is still 38 per cent higher than the current share price.
Net profit from ownership maintained rapid growth: the company's operating income in 2021 was 28.8 billion yuan, an increase of 84.9% over the same period last year. Property management, community value-added, non-owner value-added, other services, three supply and one industry, urban services and commercial operations accounted for 47.8%, 11.5%, 9.3%, 0.5%, 12.9%, 15.7% and 2.3%, respectively. A year-on-year decline of 7.3, 0.4, 0.5, 1.5, 4.4, 10.0 and 2.3 percentage points.
The net profit of homing was 4 billion yuan, an increase of 50.2% over the same period last year. The net interest rate was 14.0%, down 3.2 percentage points from the same period last year.
The comprehensive gross profit margin decreased compared with the same period last year: 2021A comprehensive gross profit margin was 30.7%, down 3.3 percentage points from the same period last year, mainly due to the increase in the proportion of services in cities with lower gross profit margin, the cancellation of social security deductions and other reasons. According to the split of the company's gross profit margin, the gross profit margins of property management, community value-added, non-owner value-added, other services, three supply and one industry, urban services and commercial operation are 30.3%, 60.5%, 40.9%, 24.7%, 11.2%, 17.6% and 50.3%, respectively. Year-on-year decline of 4.3%, 4.6%, 4.6%, 0.7%, 3.5%, 14.9% (2020A has no commercial operation segment).
In the tube area to maintain rapid expansion, the proportion of third-party property increased: the company by the end of 2021 in the tube area of 766 million square meters, double year-on-year, the contract area of 1.438 billion square meters. In 2021, the company successively acquired Blu-ray Garbo business, Fuliang Global and Neighbourhood Lok, greatly expanding the management area. Among the new tube areas in 2021, those from Country Garden Holdings, brand development and acquisition accounted for 19%, 10% and 72%, respectively. By the end of 2021, properties from third parties accounted for 55% of the managed area.
Basic property management diversion, community value-added services to maintain a high growth: in 2021, the company realized community value-added service income of 3.33 billion yuan, an increase of 92.2% over the same period last year, of which community media income and local life service income accounted for a relatively high rate of growth, achieving income of 9.8 yuan and 1.11 billion yuan respectively, an increase of 179.1% and 107.1% respectively.
Risk tips: business expansion is not as expected; property management satisfaction is reduced; property management fee collection rate is reduced; property management fee increase is blocked.