1）业务发展均衡，收入稳健增长。24H1 公司核心业务稳健开展，物管/园区服务/咨询服务分别实现收入60.2/17.6/11.3 亿元，同比+14.6%/+6.1%/+5.3%，物业服务是公司最大收入和利润来源，截至2024 年6 月30 日，物业管理在管项目3356 个，在管面积4.8 亿平，储备面积3.6 亿平，项目储备丰富，为未来业绩增长提供较强的保障；从地区分布来看，公司17.2%的在管面积集中在大杭州地区，7.0%位于宁波，35.4%位于长三角其他区域，在管项目密度较高。Incident: Greentown Services' 2024H1 revenue +11% YoY, net profit to mother +22% YoY.
Greentown Services announced the 2024H1 results announcement, achieving revenue of 9.1 billion yuan, a year-on-year increase of 10.6%, and gross profit of 1.74 billion yuan, a year-on-year increase of 14.0%, a gross profit margin of 19.2%, an increase of 0.5 pct; core operating profit of 0.89 billion yuan, an increase of 25.8%; and net profit to mother of 0.5 billion yuan, an increase of 21.5% year-on-year.
Comment: Balanced business development, improved operating efficiency, rapid growth in core profits, and increased employee motivation.
1) Balanced business development and steady revenue growth. 24H1's core business is developing steadily, with property management/park services/consulting services respectively achieving revenue of 6.02/1.76/1.13 billion yuan, compared to +14.6%/+6.1%/+5.3%. Property services are the company's largest source of revenue and profit. As of June 30, 2024, there were 3,356 property management projects under management, with a management area of 0.48 billion square meters and a reserve area of 0.36 billion square meters. The project reserves are rich, providing a strong guarantee for future performance growth; distributed by region Looking at it, 17.2% of the company's management area is concentrated in the greater Hangzhou region, 7.0% is located in Ningbo, and 35.4% is located in other regions of the Yangtze River Delta. The density of projects under management is high.
Park services focus on owners' living and asset management needs. The revenue growth rate of the five major businesses of community retail/home life/space services/asset operation/cultural education services was +11.4%/+21.1%/+6.1%/-13.3%/+9.1%. Community retail business is still the largest source of revenue for the sector (accounting for 36.6%). Through small programs, park front warehouses, park markets, etc., it continues to provide high-quality products and services to enhance scale effects.
2) Overall improvement in operating efficiency and rapid growth in core profit. In the first half of the year, the company concentrated on optimizing the system process, reducing the number of processes, improving process efficiency, and achieved a year-on-year reduction in the management fee rate of 0.6 pct. At the same time, it fully implemented expenses to strengthen cost improvements, and promoted the stop-loss of major loss projects, and achieved an overall gross margin increase of 0.5 pct to 19.2% year over year. Among them, the gross margin of property management/park services/consulting services/technology business was 14.9%/23.9%/32.1%/38.7%, respectively, with year-on-year changes of +1.1 pct/-0.4 pct/+2.0pct/+2.1pct.
A series of measures to improve quality and efficiency boosted the company's core profit to achieve a rapid growth of 25.8% in the first half of the year.
3) Abundant cash reserves, motivating employees to increase motivation. As of June 30, 2024, the company had cash and cash equivalents of $3 billion and fixed deposits of 1.3 billion yuan, with sufficient capital reserves; in the first half of the year, the company signed a new contract with annual saturated income of 1.57 billion yuan. On June 26, the company granted a total share purchase rights of about 71.24 million shares to several directors, executives and employees based on the early equity incentive plan, binding employee interests to the company's growth, and fully mobilized against the backdrop of increased competition and complex business environments in the industry Employee motivation and per capita efficiency are expected to continue to increase.
Profit forecast, valuation and rating: The company's core operation is steady, the brand reputation is high, and the company's operating efficiency improved across the board in the first half of 2024. With the granting of equity incentives, the company is expected to further motivate employees and continue to improve quality and efficiency. We maintain the company's net profit forecast for 2024-2026 at 0.75/0.91/1.08 billion yuan. The corresponding forecast PE is 14/12/10 times. The company's performance is growing steadily, focusing on shareholder returns, and maintaining a “buy” rating .
Risk warning: Outreach falls short of expectations, development of value-added services falls short of expectations, and non-operating factors continue to affect profits.
