The material management faucet rooted in the central region, with high-density coverage of the project.
The company is a comprehensive property service provider mainly rooted in the Central Plains. Its business is divided into three parts: property management and value-added services, life services, commercial asset management and consulting services. The company's property management and value-added services cover 18 prefecture-level cities in Henan Province (and 97 county-level cities in 104 county-level cities), serving more than 1.5 million owners and households. The high-density coverage of the company's projects in Henan enables the company to link more life service resources based on property management services, create a shared service center, and constantly improve customer satisfaction. In terms of area under management and total income, the company is the largest property management service provider in the central region. As of December 31, 2020, the contracted and managed area of the company is 187 million and 100 million square meters respectively, and the certainty of growth in the next three years is relatively high.
The performance was beautiful, and the number of registered users of Jianye + platform grew rapidly. as of December 31, 2020, the company's operating income was 2.655 billion yuan and its net profit was 427 million yuan, up 51.3% and 82.3% respectively over the same period last year. Among the company's main business lines, the income from property management services and value-added services is about 2.2 billion yuan, an increase of 63.9% over the same period in 2019, accounting for about 82.8% of the total income. The income from living services was about 370 million yuan, an increase of 19.4 percent over the same period last year, and the total income accounted for about 13.9 percent, of which the income from Jianye + platform was 290 million yuan, accounting for 78.4 percent, an increase of 81.3 percent over the same period last year. The number of registered users on the platform has increased by 68.0% from last year to 3.672 million, and has successfully covered more than 2 million users except in the managed community.
Jianye Real Estate maintains rapid contract sales growth in 2016 / 2020. Jianye Group has been working in Henan Province for more than 20 years. At present, the related listed companies of Jianye New Life (9983.HK) include Jianye Real Estate (0832.HK), Central Plains Construction (9982.HK) and Zhouyou Intelligent Manufacturing Technology (0726.HK). Among them, the contract sales area of Jianye Real Estate (0832.HK) increased from 2.76 million square meters at the end of 2016 to 14.5971 million square meters at the end of 2020, with a four-year compound growth rate of 51.64 percent. As of December 31, 2020, the land reserve construction area of Jianye Real Estate is about 54.11 million square meters, of which the equity construction area is about 40.29 million square meters. The rapid development of Jianye Real Estate and other related enterprises provides a solid guarantee for the steady growth of Jianye's new life in the future.
Investment advice and profit forecast
As of December 31, 2020, the contract area of Jianye's new life is about 187 million square meters, which is 1.87 times the area under management, and the land reserve construction area of Jianye property will reach 54.11 million square meters at the end of 2010. coupled with the company's excellent third-party expansion capability in the central region, the company's contract and managed area growth in the next three years is highly deterministic and predictable.
We estimate that the company's operating income in 2021 will be 3.982 billion yuan, 5.973 billion yuan and 8.959 billion yuan respectively, and its net profit will be 597 million yuan, 838 million yuan and 1.184 billion yuan respectively, and the corresponding EPS will be 0.47 yuan, 0.67 yuan and 0.94 yuan respectively, and the performance will maintain a trend of rapid growth in the next three years. Give the company a target price of HK $11, corresponding to the average price-to-earnings ratio of the industry's leading companies by PE19.4X, in 2021, the company is significantly undervalued and maintains a "buy" investment rating.
Risk hint
The higher-than-expected adjustment in the real estate industry led to a slowdown in performance growth and a sharp rise in staff costs.