Key points of investment
Performance growth exceeded expectations, and profitability increased. In 2020, the company achieved operating income of 1,109 billion yuan, an increase of 24.4% over the previous year; the net profit returned to the mother was 99.31 million yuan, a sharp increase of 52.01% over the previous year. The consolidated gross profit margin in 2020 was 20.76%, up 2.11 percentage points from 2019. Among them, the gross margin of integrated property management services was 17.99%, an increase of 2.83 percentage points over the previous year; the gross margin for government services was 21.71%, a sharp increase of 6.94 percentage points over the previous year.
The top five major customers are deeply tied. The revenue of the top five major customers was 692 million yuan, an increase of 42.1% over the previous year, accounting for 62.42% of the company's total revenue, an increase of 7.72 percentage points over the previous year. Among them, the revenue contributed by Huawei was 418 million yuan, an increase of 63.5% over the previous year, accounting for 37.66% of the company's total revenue, an increase of 9 percentage points over the previous year; revenue contributed 191 million yuan, an increase of 24.9% over the previous year, accounting for 17.24% of the company's total revenue, the same as the previous year.
New orders are of high quality, and future growth can be expected. During the reporting period, the company won 43 new bids, added 2.55 million square meters of management area, and added 157 million yuan in annual contracts. In 2020, the company successfully won the bid for the Huawei national cloud data center operation and maintenance project and successfully entered the field of data center operation and maintenance. The winning project included 18 sites, distributed in 16 cities across the country, with a total of 25,000 cabinets.
Government services have become a new profit growth point. The number of government service projects managed by the company grew rapidly from 15 in 2016 to 125 at the end of 2020, and the revenue volume increased from 21.96 million in 2016 to 148 million yuan in 2020. The compound annual growth rate of government service revenue in the past five years was 61.2%, and the growth momentum is strong.
State-owned enterprises have sufficient incentives in the background and private sector mechanism. The majority shareholder of the company is Tefa Group, and the actual controller is the Shenzhen State-owned Assets Administration Commission. Management holds a lot of shares, and incentives are flexible. Yinkun Investments covers 72 core cadres and holds a total of 11.25 million shares. When the company went public, core executives participated in the strategic placement, which sold 2.5 million shares.
Investment advice: TEFA Services is deeply involved in the property segmentation circuit of science and technology parks. It has obvious brand advantages and has the best long-term stable customer resources in China. Although the company is a state-owned enterprise background, its mechanism is flexible. The increase in performance exceeded market expectations, and profitability increased. We expect the company's EPS for 2021/2022 to be 1.43 and 1.85 respectively. According to the closing price on April 23, the corresponding PE was 29.7 times and 22.9 times, giving it a “prudent increase” rating for the first time.
Risk warning: Labor costs have risen sharply, and excessive reliance on large customers.