The company has acquired a total of 60% of Zhejiang Liantianmei's shares. Zhejiang Liantianmei is China's leading medical and aesthetic integrated service group.

It currently operates 2 private medical and aesthetic hospitals in Hangzhou and has 24 registered patents.

The area under management is expected to record strong growth from the second half of 2020 to 2022. The company acquired two third-party property management companies with a total operating area of approximately 25.7 million square meters. We expect the area under management of property management services to surge to around 45 million square meters by the end of 2020 and further increase to about 75 million square meters by the end of 2022.

The “two wings in one” strategy will bear fruit in the future. Currently, the company's main business mainly includes residential property management and commercial operations. Thanks to the acquisition of a third-party property management company and the continuous development of value-added service business, the company's revenue dependence on the parent group will be drastically reduced, and the revenue structure of property management will also be further optimized. After years of development, the company's current layout in the big health sector mainly includes health services, medical and aesthetic services, and traditional Chinese medicine services. The company has also set up an online and offline platform to further integrate several of the company's major business segments. We anticipate that the Big Health business will become the company's new growth engine in the near future.

We raised our target price to HK$10.50 per share and raised our investment rating to “buy”. The target price is equivalent to 26.7 times/15.8 times/11.2 times the price-earnings ratio of 2020-2022, respectively. Risk factors: Lower than expected average management fees per square meter, and there is uncertainty about third party acquisitions and big health businesses.