The company recently announced that as of December 31, 2020, the construction area in management and the contract construction area had reached about 100 million square meters and 186 million square meters, respectively, an increase of 75.5 percent and 62.2 percent compared with the construction area of about 57 million square meters and 115 million square meters at the end of 2019. The construction area under management of third-party property developers accounts for about 43.0% of the company's total construction area, an increase of 11.9 percentage points over the end of 2019.
The growth of contract building area in 2020 is higher than expected, and the scale growth in 2021 will mainly rely on third-party mergers and acquisitions.
Thanks to the company's brand advantage in the central region and excellent market expansion ability, the company's managed area and contract area reached 100 million square meters and 186 million square meters respectively in 2020, an increase of 75.5% and 62.2% over the same period last year. The growth of the contract area slightly exceeded our previous expectations. We estimate that the area of management and contract of the company will reach 170 million square meters and 230 million square meters respectively in 2021. It is estimated that in 2021, the new area will be about 14 million square meters from Jianye affiliated companies, 40 million-50 million square meters from third-party mergers and acquisitions, and about 75% from third-party mergers and acquisitions.
Revenue from Jianye + platform is expected to grow by about 100% year-on-year in 2020. Thanks to the rapid growth in demand for "online" services during the epidemic, we expect the number of Jianye + users to exceed 3.6 million by the end of 2020, GMV will reach about 800 million yuan, and Jianye + platform revenue and total transaction volume will grow by about 100% in 2020. It is estimated that the number of Jianye + users will exceed 5 million in 2021, and the number of Jianye + service groups will grow by millions every year in the next three years. Jianye + platform will become one of the main driving forces of the company's revenue growth.
High density of in-management projects and strong synergistic effect
In the past few years, the company has deeply cultivated the Henan market. At present, more than 95% of the managed projects are located in 18 prefectures and cities in Henan Province, with an average of about 20 projects in each prefecture and city. the synergy brought by high-density project coverage will help companies reduce operating costs, build shared service centers, link more life service resources, and constantly improve customer satisfaction.
Investment suggestion
The company's performance growth in the next three years is determined, and the current stock price corresponds to about 12x of PE in 2021, which is obviously undervalued. We maintain the previous 2020Mel 2022 income and return net profit forecast, the company is expected to 2020Mel 2022 revenue of 2.644 billion yuan, 3.993 billion yuan, 5.59 billion yuan, respectively, home net profit of 389 million yuan, 589 million yuan, 829 million yuan, the corresponding EPS is 0.31,0.47 yuan, 0.66 yuan respectively. We maintain the company's target price of HK $12, corresponding to the 2021 PE21X, and maintain the "buy" investment rating.
Risk hint
The higher-than-expected adjustment of the real estate industry led to a slowdown in performance growth; a sharp rise in costs; lower-than-expected progress in mergers and acquisitions; and lower-than-expected revenue from value-added services.