A-LIVING SERVICES CO LTD(3319.HK):STILL IN THE PROCESS OF BALANCING PROFITABILITY AND CASH FLOW
A-LIVING SERVICES CO LTD(3319.HK):STILL IN THE PROCESS OF BALANCING PROFITABILITY AND CASH FLOW
A-Living's 2023 revenue edged up by 0.4% YoY to RMB15.4bn, 0.7% and 3.4% below BOCI and market estimates. All segments grew by single digit, except for extended VAS (to developers) which declined by 46.6% YoY, as related parties face challenges. Gross margin narrowed by 4.9ppts to 17.1%, 2.5ppts and 3.2ppts below BOCI and market estimates, partially due to more expenses related to improving service quality and equipment repairs, and partially due to revenue mix change. SG&A as % of revenue was maintained at 6.1%. A-Living recorded RMB535m impairment on account receivables, 14.9% more than previous year, and RMB428m impairment on goodwill for the first time. As a result, net profit declined by 74.9% YoY to RMB461m. We calculated that excluding one-off items, core net profit attributable to shareholders amounted to RMB1.3bn, down 38.4% YoY, 15.2% and 14.4% below BOCI and market estimates. Operating cash flow amounted to over RMB0.9bn. The company resumed dividend in 2023, and payout ratio on reported net profit was 26.2%. We cut our 2024-25E core EPS by 26.6-31.0%, respectively, factoring in lower margin and drop in extended VAS revenue. We also cut our TP by 53.5% to HK$3.36. On the one hand, OCF improved significantly in 2023, on the other hand, uncertainty remains high regarding profitability and cash collection from related parties. Downgrade to HOLD rating.
A-Living的2023年收入同比增长0.4％，至154亿元人民币，比中银国际和市场预期低0.7％和3.4％。所有细分市场均以个位数增长，但由于关联方面临挑战，扩展增值服务（面向开发商）同比下降46.6％。毛利率缩小了4.9个百分点至17.1％，比中银国际和市场预期低2.5个百分点和3.2个百分点，部分原因是与改善服务质量和设备维修相关的支出增加，部分原因是收入结构的变化。销售和收购占收入的百分比维持在6.1％。A-Living记录了人民币5.35亿元的应收账款减值，比上年增长了14.9％，商誉减值首次出现了4.28亿元人民币。结果，净利润同比下降74.9％至人民币4.61亿元。我们计算，不包括一次性项目，归属于股东的核心净利润为人民币13亿元，同比下降38.4％，比中银国际和市场预期低15.2％和14.4％。运营现金流超过9亿元人民币。该公司于2023年恢复分红，报告的净利润的派息率为26.2％。考虑到利润率下降和扩大增值服务收入的下降，我们将2024-25年度的核心每股收益分别下调了26.6-31.0％。我们还将目标价下调了53.5％，至3.36港元。一方面，OCF在2023年显著改善，另一方面，盈利能力和向关联方收取现金的不确定性仍然很高。降级至 HOLD 评级。
Key Factors for Rating
评级的关键因素
A-Living maintained industry leading market expansion capabilities, with new contracted GFA in 2023 reaching 60m sqm, similar to 2022. However the company also terminated projects with suboptimal profitability or cash flow, therefore total contracted GFA increased by 35.1m sqm to 766.6m sqm. Newly obtained contract value amounted to RMB1.3bn, down 48% YoY. GFA under management increased by 44.7m sqm to 590.5m sqm. Residential, public and commercial projects account for 42.4%, 46.0% and 11.6% of GFA under management, respectively.
A-Living保持了行业领先的市场扩张能力，2023年新签约的总建筑面积达到6000万平方米，与2022年相似。但是，该公司还终止了盈利能力或现金流不佳的项目，因此合同总建筑面积增加了3510万平方米，达到7.666亿平方米。新获得的合同价值为13亿元人民币，同比下降48％。管理的总建筑面积增加了4,470万平方米，达到5.905亿平方米。住宅、公共及商业项目分别占所管理建筑面积的42.4％、46.0％和11.6％。
Community VAS revenue only edged up by 0.6% YoY, with segment gross margin narrowing by 12.8ppts. Part of the reason was a decline of property market related businesses such as home decoration and carpark sales which also had higher margin. A-Living is refocusing on more sustainable businesses with more synergy with property management including group catering, energy-saving and living services.
社区增值税收入仅同比小幅增长0.6％，细分市场毛利率缩小了12.8个百分点。部分原因是房屋装饰和停车场销售等房地产市场相关业务的下滑，这些业务的利润率也有所提高。A-Living正在将重点重新放在更具可持续性的业务上，这些业务与物业管理具有更大的协同作用，包括团体餐饮、节能和生活服务。
Key Risks for Rating
评级的主要风险
Upside: dividend payout ratio has upside if positive cash flow persists
好处：如果现金流持续正值，股息支付率有上行空间
Downside: competition in the public segment may be intensified
缺点：公共领域的竞争可能会加剧
译文内容由第三方软件翻译。