Main points of investment
The company's 2020 performance exceeded market expectations: the company's operating income in 2020 was 960 million yuan, up 36.8% from the same period last year; the core net profit was 220 million yuan, up 75.1% from the same period last year; and the company paid a generous dividend of HK $0.564 per share, with a dividend payout rate of 60%. The company's annual performance exceeded market expectations.
Reducing cost and increasing efficiency, and improving gross profit margin: in 2020, the proportion of income from the company's property management services, non-owner value-added services and owner value-added services was 58%, 32% and 10% respectively, and the contribution of gross profit was 35%, 48% and 17% respectively. There is still room for business structure optimization. Benefiting from cost reduction and efficiency measures and the development of value-added services for high gross margin owners, the consolidated gross profit margin increased by 2.9 percentage points to 31.0% in 2020 compared with 2019.
Multi-channel expansion to the quality tree benchmark: by the end of 2020, the company's management and contract area were 1966 and 3549 million square meters respectively, an increase of 38.9% and 32.4% respectively over the same period last year. In addition to strengthening the cooperation of Binjiang Group, the company has actively expanded and formed strategic cooperation with 10 small developers. In 2020, 27% of the new contract area came from direct extension of the market, 18% from strategic partners, and 55% from Binjiang Group. While growing in scale, the company insists on high-quality service, with an average property management fee of 4.26 yuan per square meter per month in 2020, maintaining a leading level in the industry. In the future, on the basis of standardization and classification of products and services, the company will set up benchmarking projects through high-end buildings, strengthen the expansion of the scale of ordinary buildings, and continue to carry out community value-added services on the basis of expanding the customer base and doing a good job of satisfaction. it is expected to bring new performance growth points for the development of the company.
Our point of view: the company cooperates with Binjiang Group to ensure its scale growth, and at the same time, relying on the brand effect of "Binjiang", actively expand the market, and the size of the company is expected to maintain steady growth. The company focuses on Hangzhou, ploughs and grows the triangle, develops value-added services on the basis of high density, and actively builds a value-added service system centered on 5S, which is expected to become a new profit growth point of the company. Investors are advised to pay attention to it.
Risk tips: business expansion is not as expected; property management satisfaction is reduced; property management fee collection rate is reduced; property management fee increase is blocked.