22H1 performance compared with the same period last year + 33%, in line with expectations, in the tube area + 60%, contract area + 33%. 2022H1 achieved revenue of 3.16 billion yuan, + 53.6% year-on-year; gross profit of 810 million yuan, + 31.9% year-on-year, of which community value-added services accounted for 29%, compared with 21 years-9pct; net profit 440 million yuan, + 35.8%; return to mother net profit 380 million yuan, year-on-year + 33.4%; basic earnings per share 0.22 yuan, year-on-year + 29.4%. Gross profit margin and homing net profit margin were 25.7% and 11.9%, respectively, compared with the same period last year-4.2pct and-1.8 pct; management, sales and financial rates were 6.9%, 1.5% and 0.1%, respectively, compared with the same period last year-0.9pct,-0.6pct and-0.0pct. At the end of 2022H1, the company's management area is 210 million square meters, which is + 60.0% compared with the same period last year; the contract area is 290 million square meters, which is + 33.0 percent year on year; the contract / tube area coverage is 1.40 times, and the subsequent scale growth still has a strong guarantee. The net operating cash flow of 22H1 is 130 million yuan, which is positive for 8 consecutive periods. The cumulative operating cash flow covers the cumulative net profit (2019-2022H1). In addition, the company plans to pay an interim dividend of HK $0.074 per share for the first time, with a dividend ratio of 30 per cent. Since the beginning of January, the company has made 14 buybacks and the management has increased its holdings for 5 times, demonstrating its confidence in development.
Third-party and non-residential expansion continues to accelerate, and multi-format comprehensive and balanced growth. At the end of 22H1, Xuhui and third parties accounted for 17% and 83% of the managed area, respectively, and residential and non-residential accounted for 62% and 38%, respectively, of which the proportion of third-party and non-residential increased 1.5pct and 3.2pct respectively compared with 2021. 22H1 bidding increased by 2081 million square meters, corresponding to 570 million yuan of saturated income, unchanged from the same period last year, and continued to verify the extension ability under the influence of a major epidemic. 22H1 company added Tianshui Hengtong Yuefu, Meituan distributed workplace project, Liming Vocational University, Jiashan County first people's Hospital and other high-quality projects. Housing accounted for 52% of the basic property management income in 2021, compared with the same period last year-4pct. The basic property management, community value-added, non-owner value-added and urban service revenue of 22H1 are 18.9,5.4,5.5,5.5 and 180 million yuan respectively (21H1 has no income), accounting for 60%, 17%, 17% and 6% respectively compared with the same period last year. The gross profit margins were 23.5%, 42.6%, 22.5% and 7.2% respectively, which were the same as the same period last year,-3.9pct and-4.1pct, respectively. The decline in community value-added gross profit margin was mainly due to the decline in the proportion of income from property brokerage services with relatively high gross profit margins.
The platform + ecological strategy is very effective, and the value-added of the community continues to be strengthened under the epidemic. In terms of community value-added, the company adheres to the strategy of platform + ecology, independently expanding the special business into BU, continuously deepening the research on community scenes and service target groups, and establishing a "good things Research Institute" to increase the demand for different property formats and the exploration of potential demand and service methods that may exist among owners and tenants after COVID-19 's epidemic. Among the 22H1 community value-added services, the income from home, parking space management and rental, property brokerage and public area value-added services was 3.3,0.6,1.0 and 60 million yuan respectively, accounting for 60%, 11%, 19% and 10% respectively compared with the same period last year. Among the non-owner value-added services, the income from co-sales, additional special services, pre-regulation, house repair and pre-delivery inspection services is 1.8,2.4,0.4,0.6 and 20 million yuan respectively, which is + 6%, + 72%,-1%, + 106% and + 43%, respectively, accounting for 32%, 45%, 8%, 11% and 4% respectively.
Investment analysis opinions: rapid growth in performance, balanced development, maintain the "buy" rating. Xuhui Yongsheng service relies on Xuhui Group, and will rely on three major advantages to achieve high-quality growth in the future: endogenous completion and delivery, inheriting Xuhui's high growth; outbound development continues to show its edge in bidding, regional real estate-enterprise cooperation and mergers and acquisitions; value-added services are growing rapidly, and gross profit per unit area ranks first. At present, the contract / management area of the company is 1.6x Prida, which is in a high position in the industry, and the company is actively expanding, which will help accelerate the scale in the future. Taking into account that the pressure on real estate sales will affect the completion and delivery, we downgrade the company's earnings per share forecast for 22-24 to 0.42, 0.51, 0.61 (the original 0.49, 0.68, 0.90), and the current price corresponds to 22-year PE only 11x, maintaining the "buy" rating.
Risk hint: business development is not as expected, rising labor costs lead to profit margin downside risk, acquisition progress is not as expected.