The valuation is very attractive, and the service has entered a period of rapid growth.

Core profit increased by 49.2% to 2.55 million yuan, in line with the market forecast: by 2020, the company's operating income increased by 37.1% to 1.73 billion yuan, of which property management income increased by 41.9% to 790 million (dry income is about 740 million, fee income is about 50 million), and pre-delivery and customer service income increased by 33.3% to 6.2 million yuan. The value-added service income of the community increased by 11.4% to 135 million, and the smart solution service increased by 56% to 180 million yuan. The gross profit of the company is about 5.3 yuan, and the gross profit margin is about 31%, of which the gross profit margin of pre-delivery and premium services is 31.3%, and the gross profit margin of community value-added services is 49.6%. The board is stable (specific: property management services 26.6%, smart solution services 31%). Thanks to strict cost control, the company's operating rate has dropped to 11.8%, with an income rate of 26.57%. The company recorded a parent profit of about 222 million yuan, an increase of 35.4% over the same period last year. Excluding share-based payment costs, the company's core profit after restructuring is about 255 million, an increase of 49.2% over the same period last year, which is in line with the market forecast.

It is expected to exceed 100 million square meters in 2021: by the end of 2020, the company will manage a total of 435 projects, covering a total of 7730 square meters (and has not yet included about 8 million square meters of urban renewal items), with a total of 5750 square meters on the management surface, with an annual increase of 1129 square meters. The examination will collect 1093 square meters of the project at the end of December 20. It is estimated that by now, the company's management area has exceeded 6800 square meters at least. It is expected that with the face-to-face delivery of the parent company and the acceleration of negotiation, the company is expected to reach more than 1 square meter in the management area in 2021 (of which the parent company delivery area is not less than 500,000 square meters, and the increase area is not less than 3000-4000 square meters, the expansion area is not less than 7.5 million square meters), it is expected to achieve great-leap-forward development on the management side, with the increase of the support of the parent company in the future and the acceleration of negotiation outside development. It is expected that the total cost of management in 2023 is expected to exceed 240 million square meters. with the rapid promotion of the company's management model, the company's turnover will continue to grow.

Non-residential business continued to expand: by 2020, the company's non-residential area has increased to 1499 square meters, accounting for 26.1% of the total management area, accounting for 53% of the total property management income. Non-residential service has always been one of the company's bright spots. On the one hand, after years of hardship, the company has gradually established its own non-residential service brand, and began to actively expand abroad. At the same time, with the parent company holding a large number of reform resources in the core cities, it is expected that the reform projects will be released step by step, of which the proportion of commercial and commercial materials will gradually increase. We believe that the company is expected to occupy a certain position in the field of business and property in the future, considering that the profits of non-residential projects are much higher than those of the housing industry, further raising the level of profitability of the company in management and driving the growth of income. In addition, the company actively builds a full-quality service system, carries out government-enterprise cooperation, undertakes the functions of the property city, and creates an urban integrated service model, of which the company has served 13 projects by 2020. It is estimated that the company can manage 27 projects in 2022 and continue to expand the company's unique brand characteristics.

With a target of HK $47.6, we believe that the company is a property management company with relatively low valuation in the property management board, but it is not weak after development. considering the company's outstanding ability to expand outside the market and the gradual improvement of parent company sales, the support for residential projects or commercial property projects will be gradually strengthened. We expect that from 2021 to 2023, the company will realize a mother profit of 358 million, 607 million and 1.05 billion, an increase of 62%, 69% and 72% over the same period last year. We are trading at a price-to-earnings ratio of 17 times earnings in 2021, with a target of about HK $47.6.