Shoucheng Holdings's revenue for the first half of 2022 rose 44.4% year on year to 922 million yuan. Among them, revenue from the parking and travel sector increased 76.2% year on year, and revenue from the infrastructure real estate asset management sector increased 23.9% year on year. Gross margin increased 15.8 percentage points to 70.8% year on year, operating profit increased 117.5% year on year to 794 million yuan, and profitability increased. The increase in profitability was mainly driven by a sharp increase in fund excess income and investment income from unlisted equity securities over the same period last year. Its gross margin was far higher than that of the parking business. The company's asset management sector will advance steadily, and the official launch of the China Life Insurance Fund marks the successful construction of a pre-REITS investment platform to assist in the distribution of public REITs and the expansion of pre-REITs projects in the fields of rail transit, photovoltaics, and guaranteed housing. Maintain a “buy” rating.
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Revenue growth is strong. Shoucheng Holdings' revenue for the first half of 2022 increased by 44.4% year on year to $922 million (same in HKD, unless otherwise specified). Among them, revenue from the parking and travel sector rose 76.2% year on year to 480 million yuan, and revenue from the infrastructure real estate asset management sector rose 23.9% year on year to 442 million yuan. By breakdown, parking revenue fell 18% year on year to 171 million yuan; service franchise arrangement revenue rose 92.3% year on year to 65.75 million yuan; rental revenue increased 22.2% year on year to 36.66 million yuan; fund management service revenue was about 100 million yuan, which remained stable compared to the same period last year; excess return on investment funds rose 28.5% year on year to 332 million yuan. Among them, funds managed by fund management companies investing in parking and travel businesses allocated excess income of about 200 million yuan in the current period, and some strategic equity investment funds entered the exit The excess return brought about by the distribution period was approximately 133 million yuan. Also, in the first half of the year, the company brought in revenue of 220 million yuan due to the disposal of investments in unlisted equity securities, and a loss of 1 million yuan in the same period last year.
Increased profit levels. In the first half of 2022, Shoucheng Holdings' gross margin increased 15.8 percentage points to 70.8% year on year, gross profit increased 85.8% year on year to 653 million yuan in the first half of 2022, and operating profit increased 117.5% year on year to 794 million yuan. Profitability increased. By sector, the pre-tax profit of the parking and travel segment surged 249.5% year on year to 112 million yuan. It mainly benefited from the company's “key city+core location+high-quality assets” layout concept, operating parking assets with a full-industry chain approach, and focusing on building a full-industry chain business ecosystem, including capital raising, parking facility design and construction, parking management system support, and parking asset operation and management. The fund management company, which focuses on investing in the parking and travel business, received excess revenue of about 200 million yuan in the first half of the year. This portion has a high gross margin, so the profitability of the parking and travel sector has increased.
The asset management sector is progressing steadily. The pre-tax profit of the fund management sector increased 38.7% year on year to 389 million yuan. Through the “fund+base+industry” real estate finance model, the company participates in the development, management, operation and exit of industrial carriers, uses fund investment to radiate industrial resources, and effectively enhances the value of assets. The “Six Gonghui” project invested by the Real Estate Fund officially opened and operated in 2022. In terms of REITs, the company has established a first-mover advantage, and has achieved full coverage of high-quality REITs assets such as publicly funded REITs industrial parks, warehousing and logistics, and highways. Furthermore, the official launch of the China Life Insurance Fund marks the successful construction of a pre-REITs investment platform. In the first half of the year, the company focused on key areas of public REITs to assist in the distribution of public REITs and pre-REITs projects in the fields of rail transit, photovoltaics, and guaranteed housing. Maintain a “buy” rating.
Risk Warning: Fluctuations in fund management returns and the impact of the pandemic on business development