Main points of investment:
Events. The company publishes its semi-annual report for 2020. During the reporting period, the company realized operating income of 741.0 million yuan, an increase of about 32.7% over the same period last year, and the company realized a net profit of 119.1 million yuan, an increase of about 31.4% over the same period last year.
In the first half of 2020, the company's revenue growth mainly came from property management services, and the business income during the reporting period was about 364.8 million yuan, an increase of about 56.2%. The increase is mainly due to the increase in total floor area under management through internal growth and the completion of the acquisition of business expansion of third-party property management companies.
As of June 30, 2020, the income from property management services was about 364.8 million yuan, an increase of about 56.2%.
Over the same period, revenue from pre-delivery and consultancy services was about $243.9, an increase of about 12.5%. In the same period, the revenue from community value-added services was about 59.3 million yuan, an increase of about 5.0%. Over the same period, revenue from smart solution services was about 73.0 million yuan, an increase of about 41.6%.
According to the 2020 semi-annual report, by the first half of 2020, the company's property management services had covered 44 cities in 15 provinces, municipalities and autonomous regions in China, with a total construction area of 48.8 million square meters and a total of 323 property managements. including 170 residential areas and 153 non-residential properties. In June 2020, the company entered into an agreement to acquire a 60% stake in Ningbo Langtong property Services Co., Ltd., which will increase the area under management by more than 4.0 million square meters at the time of delivery after the medium term.
Investment advice: the country's leading supplier of integrated property management services, maintaining a "better than the market" rating. The company focuses on mid-and high-end properties, especially high-quality projects located in Guangdong-Hong Kong-Macau Greater Bay Area and the Yangtze River Delta region with great economic growth potential. The company's existing four major business lines include property management services, pre-delivery and consulting services, community value-added services and intelligent solution services, which fully cover the entire property management value chain, forming an integrated service category running through the upstream and downstream. We estimate that the EPS of the company from 2020 to 2022 is 1.38,1.88 and 2.54 yuan respectively. With reference to the valuation of similar comparable companies, the company is given a dynamic price-to-earnings ratio of 30-35 times in 2020, corresponding to a reasonable value range of HK $46.32-54.04. the midpoint of the Hong Kong dollar exchange rate is 0.89385 RMB / HK $), which is rated as "better than the big market".
Risk hint. The risk of rising labor cost; the risk of excessive concentration in the region; the risk of value-added business expansion is not as expected.