Based on the home, achieved at home
The company initially formed three business patterns of real estate marketing, finance, and leasing. Transactional capabilities based on Internet data are gradually increasing, there is broad scope for collaboration between credit business and existing business, and prospects for involvement in the entire long-term rental apartment industry chain are promising. It is predicted that the company's 2018-2020 EPS will be 0.57, 0.69, and 0.85 yuan/share, covering the first time, giving it a “increase in holdings” rating.
Increased data monetization capabilities to make up for the slowdown in the real estate e-commerce business
The company's 365 housing acquisition business direct management outlets have covered about 40 key cities across the country, providing online real estate marketing services with the Yangtze River Delta as the core. In 2017, the company upgraded 365 Taohouse and repositioned it as a data-centered Anjia Real Estate transaction service platform, focusing on building data acquisition capabilities based on platform influence and transaction monetization capabilities based on platform data. The distribution, underwriting, and agency business with online data monetization as the core is growing rapidly. It already accounted for 28% of real estate network service revenue in 2017 and further reached 46% in the first half of 2018, further compensating for the decline in e-commerce business revenue.
Microfinance is developing rapidly, and Premium Leasing is in line with the long-term rental apartment business
The company has been in the field of real estate financial services since 2015, and its products are all centered on real estate development, transactions, and post-transaction services to carry out related lending and collated lending services. Past products revolved around the entire real estate business chain and were closely linked to the original real estate internet marketing business. Currently, the main product is “Premium Rental Loan,” a rental instalment product launched in September 2017, which is closely integrated with the company's optimism and investment in long-term rental apartments. According to data from the 2017 annual report, the cumulative amount of loans for 365 small loans and home loans in 2017 (including loans from small loan companies and matching loans for home loans) reached 1.8 billion yuan, ranking first in the amount of Internet microfinance loans in Jiangsu Province.
Investment and financing+platform+housing acquisition, pointing to the integration of the housing rental industry
The leasing business is the company's future focus on cultivating the business direction. The company does not directly participate in the operation of rental housing, but instead uses “equity/financing+platform+housing acquisition/asset management” as a starting point of cooperation to connect long-term rental apartment operators/landlords (supply side), tenants (demand side) and housing (asset side), and open up the entire housing rental market chain. In 2017, the company used its own capital to acquire 20% of the shares in Becker Apartments, and successively established long-term rental apartment industry equity and bond investment funds with the Bank of Nanjing, China Reading Capital, and Tianfeng Securities. The total investment scale is planned to reach 5.56 billion yuan.
The leading Internet home service provider in China has been covered for the first time and given a “increase in holdings” rating
The company was given a profit forecast of 0.57, 0.69, and 0.85 yuan/share for EPS in 2018-2020. Considering that the company's business scope covers various fields such as e-commerce services, agency transactions, internet finance, long-term rental apartments, etc., there are few comparable company targets, and in the Wind and Shenwan first-level industry categories, they are respectively in the information technology and media sectors, and are also highly correlated with the real estate service industry. The average PE valuation for the three major sectors in 2018 was 16 times. Given the room for increase in the market share of the company's agent sales business and the growth expectations of the long-term rental apartment business, a valuation premium of about 40% was given, the company was given 21-22 times the PE valuation in 2018. The target price was 11.97-12.54 yuan, covering the “increase in holdings” rating for the first time.
Risk warning: Business layout is concentrated; real estate transaction boom is declining; long-term rental apartment investment return cycle is long; internet financial regulation remains under high pressure.