Incidents: The company's 2022 revenue was 5.2 billion yuan, +19% year on year; Guimu's net profit was 4.2 billion yuan, compared to 19% year on year. Xincheng Yue Service issued a 2022 performance announcement. Revenue was 5.18 billion yuan, up 19.1% year on year, gross profit was 1.34 billion yuan, down 0.3% year on year; gross margin was 25.8%, down 5 pct from the previous year; Guimu's net profit was 4.2 billion yuan, a decrease of 19.4% year on year, and an annual dividend of 0.16 yuan per share was declared.
Comment: The quality of profits is higher, the ability to expand is enhanced, the cash flow is better, and the dividend ratio is expected to increase steadily 1) Accounts receivable control is better, and profit quality is higher. In 2022, the company's basic property management/community value-added /smart park+developer value-added business revenue was 3.02 billion/1.28 billion/8.7 billion yuan respectively. The customers were of high quality, and the size of accounts receivable was well controlled. The year-end trade receivables (original value) were about 1.4 billion yuan (original value) of about 700 million yuan over the previous year, and the impairment provision ratio was 9.5% (13.5%/12.8%/12.3% in 2019-2021, respectively). The impairment calculation was sufficient, and the company's profit quality was high.
2) The logistics sector is gaining strength, third party expansion capabilities have increased, and community value-added growth has been impressive. The company's market-based expansion capabilities have gradually increased, providing sufficient impetus for the promotion of large-scale logistics strategies. By the end of 2022, the company had an area under management of about 200 million square meters, adding 44.74 million square meters of management area during the year. Third parties accounted for 67%. Compared with 2019-2021, they were 29%/58%/61% respectively. In 2022, revenue from basic property management and community value-added businesses increased 44%/40% year on year, accounting for 83% of total revenue; in community value-added businesses, group meals and facility equipment services were non-cyclical, with impressive growth (group dining/facility equipment business revenue in 2022 was 355 million/243 million yuan respectively, up 334%/54% year-on-year). In 2022, the group meal business entered more than 130 service projects, serving more than 110,000 customers per day; the elevator business managed 33,000 elevators, selling and installing nearly 1,000 units per year, two items The business grew rapidly and with strong certainty, helping the company steadily overcome the period of industry adjustment.
3) SAP has passed the intensive investment period, the cash flow is good, and the dividend ratio is expected to increase steadily. In 2022, the company invested a lot of resources in the construction of information technology. The group-level SAP system brought the company's overall internal management to a new level, speeded up the generation and analysis of all kinds of company data, and the operation management system related to group meals made operating data searchable in real time and accurately grasped the project operation situation. In 2022, when the epidemic impacted business, economic growth slowed, and the real estate industry adjusted, the company's cash flow remained stable, with a dividend ratio of 33%, up 7 pct from 2021. Looking ahead, information technology construction passed the intensive investment period, real estate-related exposure narrowed, the impact of depreciation of US dollar bonds was basically lifted, company growth was back on track, cash flow was stable and abundant, and the dividend ratio is expected to increase steadily.
Profit forecasting, valuation and ratings: The company's non-cyclical business is developing rapidly, the community's value-added performance is impressive, the logistics community strategy continues to advance, third party expansion efforts are increasing, considering the real estate market environment and the company's future development priorities, the profit forecast for real estate-related businesses is lowered, and the company's net profit for 2023-2025 is predicted to be 690 million yuan (down 14%) /830 million yuan (down 16%) /990 million yuan (new), respectively. The corresponding EPS is 0.79/0.95/1.13 yuan, the company, respectively. The basic orientation is positive. The current valuation is attractive, and the “buy” rating is maintained.
Risk warning: Outreach falls short of expectations, real estate-related business continues to be affected, and there is a risk of further depreciation of US dollar bonds.