Against the trend of high growth, maintain the "buy" rating
The company released its semi-annual report on August 25. 22H1 achieved revenue of 3.16 billion yuan, + 54% year-on-year; net profit of 810 million yuan, + 32% year-on-year; and paid interim dividend for the first time, with a dividend yield of 30%. We downgrade our revenue forecast and expect the company's EPS for 22-24 years to be 0.47max 0.64max 0.84 (previous value 0.52 plus 0.74). Although we expect the company to lead the industry in growth, due to the increased operational uncertainty of related housing companies, we narrow the valuation premium and believe that the company has a reasonable 2022E PE of 20 times and a target price of HK $10.75 (previous value of HK $17.90, based on 28 times 2022E PE), maintaining a "buy" rating.
Basic property management revenue is growing rapidly and gross profit margin remains stable.
22H1 company managed area + 60% to 210 million square meters compared with the same period last year, promoting basic material management revenue from + 65% to 1.89 billion yuan compared with the same period last year, of which the company continued to achieve excellent results in non-residential format, with non-residential revenue from + 97% to 910 million yuan. In addition, revenue from non-owner value-added services went against the trend from + 38% to 540 million yuan compared with the same period last year, mainly due to the increase in service items to provide services to more third-party housing enterprises. The company's gross profit margin was from-4.2pct to 25.7% compared with the same period last year, mainly due to the decline in the gross profit margin of value-added services and the low gross profit margin of new urban services, and the gross profit margin of basic property management remained at 23.5%, the same as the same period last year.
Community value-added services wait for recovery and actively safeguard the interests of shareholders
Affected by the epidemic and the real estate downturn, 22H1's revenue from community value-added services is + 5% year-on-year, and the growth rate has slowed down. However, we believe that this is only a short-term phenomenon, and the growth rate of community value-added services is expected to pick up significantly as more business grows into independent business units and the external environment recovers. In addition, the company attaches great importance to the interests of shareholders, paying 30% of its interim profits as dividends for the first time since its listing, 14 buybacks have been carried out so far this year, and management has increased its holdings 5 times.
Lower the profit forecast, but the 22-24 return net profit CAGR is still expected to exceed 30%. We have lowered the company's 22-24 forecast return net profit by 11%, 13%, 17%, mainly because: 1, considering the interference of the real estate market and the market extension, downgrade the delivery of related housing enterprises and the scale of the market development; 2, reduce the revenue of non-owner value-added services; 3, take into account the interference of the epidemic, reduce the revenue of community value-added services. 4. according to the situation of business development, the revenue of urban services should be raised, but the gross profit margin should be reduced. Even so, we expect the company's net profit to grow by 33% year-on-year in 2022 and maintain a CAGR of more than 30% in 22-24, making it the first echelon of the head property management company.
Risk hint: the operational risk brought by the epidemic, the operational risk of related housing enterprises, and the downward risk of profitability.