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招商积余(001914):主业稳健增长 降负债将进一步提振盈利

Investment balance (001914): Steady growth in the main business and reduced debt will further boost profits

長江證券 ·  Mar 25, 2024 07:16

Description of the event

In 2023, the company achieved revenue of 15.63 billion yuan (+20.0%), net profit attributable to mother of 740 million (+24.0%), and net profit of non-return to mother of 660 million (+32.1%).

Incident comments

Property management owners are growing steadily in the industry, and profit margins are under slight pressure. The company's overall revenue in 2023 achieved steady growth ($15.63 billion, +20.0%), reached the revenue target of $15.6 billion at the beginning of the year, and the property management and asset management divisions developed collaboratively. By the end of 2023, the company's management area was 345 million square meters (+10.7%), and the scale continued to rise; the post-investment integration of the superimposed acquisition targets provided incremental growth (4 acquisition targets contributed 1.42 billion in revenue in 2023), and the steady development of value-added services, the annual revenue growth of the company's property management division was steady (14.76 billion yuan, +18.0%), of which revenue from basic property management/platform value-added and professional value-added services was +20.4%/+10.2%, respectively. The increase in the scale of commercial operations combined with a lower base due to annual rent reduction, the company's asset management division achieved revenue of 70 billion dollars (+50.1%) in 2023. The gross margin was under pressure. The gross margin of the residential/non-residential sector was affected by increased market competition, etc. The gross margin of basic property management fell by -1.2/-1.0pct to 7.9%/9.1% year on year, and the company's overall gross margin of basic property management decreased by 1.0 pct to 8.8% year on year. Even though the increase in profitability of value-added services counterbalanced it, the overall gross margin of the company's basic property management division declined slightly (-0.6 pct to 10.0%); although the increase in the share of high-margin asset management revenue was driven by the overall gross margin ratio, the company's overall gross margin decreased slightly by 0.3 pcts year on year. 11.6% The decline in interest-bearing liabilities led to a reduction in financial expenses, and the tax ratio declined. The company ultimately achieved net profit of 740 million yuan (+24.0%) and net profit of 660 million yuan (+32.1%) after deducting net income from the mother. In addition to steady internal growth in the main industry, mergers and acquisitions and rent relief contributed to a high performance growth rate last year.

The amount of newly signed contracts has increased steadily, and the dominant position has been consolidated. By the end of 2023, the company had 345 million square meters of management, of which the residential/non-residential scale accounted for 38.1%/61.9% respectively. The company signed a new annual contract amount of 4.04 billion yuan (+22.0%), of which the new non-residential business signed +28.7% year-on-year. The growth rate of dominant businesses such as universities and finance was high, and the dominant position of non-resident companies continued to be consolidated. Third-party expansion is still the absolute main force (accounting for 87.5% of the annual contract amount signed), and projects above 10 million account for more than half. Multi-path integration continues to expand, and has achieved results in both general and joint venture cooperation models; post-investment integration was effective, and the four acquisition targets signed a new annual contract amount of 193 million yuan. Deeply involved in core regions, with the top five revenue advantages, accounting for 54.2% of revenue.

Cash flow improved markedly, and the dividend ratio increased steadily. The structure was actively adjusted to achieve high-quality growth, the enterprise mall voluntarily abandoned low-margin business, professional value-added services were also steady, moderate and positive, and the scale of investment management was steadily increasing. The decline in interest-bearing liabilities and financial expenses due to the separation of responsibilities in the early period, as well as the effects of consolidation after mergers, acquisitions, and investment, have been positively fed back into the report. Cash flow improved significantly, with a net operating cash flow inflow of $1.82 billion (+82.5%); accounts receivable decreased year-on-year due to strengthened accounts receivable management, with cash in hand +37.3% year-on-year to $4.35 billion. Take the initiative to increase the dividend ratio, accounting for 24.5% in 2023 (20.7%/21.4% in 2021/2022, respectively), and it is planned that the 2024-2026 cash dividend ratio will not be less than 25%. Considering that the company has plenty of cash on hand, it is worth looking forward to subsequent mergers and acquisitions and an increase in the dividend ratio.

Actively expand the market and the steady growth of the main business, and the decline in interest-bearing debt will further boost profits. In addition to the parent company's support, the company is actively expanding its market, and its non-residential advantage is expected to grow steadily. The main property management business is expected to grow steadily. Interest-bearing debt will decline further this year, continuing to boost profits; emphasis is placed on cash flow control, and sufficient cash on hand provides hidden options for subsequent development. The estimated net profit for 2024-2026 is 8.7/10.1/1.17 billion yuan, and the corresponding valuation is 13.0/11.2/9.7X, maintaining the “buy” rating.

Risk warning

1. The company's property management profit margin repair progress fell short of expectations;

2. The progress of the separation of priorities fell short of expectations.

The translation is provided by third-party software.


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