This article is edited by Societe Generale Securities "Excellence Business Enterprise: the leading Business property Management Company in Greater Bay area" and Sino-Thai Securities "Excellence Business Enterprise Service Group Co., Ltd."

First, excellent business enterprise, the leading commercial property management company in Greater Bay area.

Excellent Business Enterprise Service is the fourth and second largest business property management service provider in China.。

In 1999, Excellence property Management was established in Shenzhen, Guangdong Province; since 2000, it has provided management services for properties developed by outstanding real estate developers; in 2006, the company began to manage properties developed by independent third parties and entered the field of business services.

From a business point of view, excellent commercial enterprises currently have three main businesses, which areBasic property management service、Value-added service和Other services。

As of May 31, 2020, excellent business enterprises have 331 projects in 34 cities in China, with a management area of 25.82 million square meters and a contract area of 36.81 million square meters.Sufficient reserve area and high visibility of performance growth。

Based on income from the provision of basic property management services to commercial properties2019Excellent commercial enterprises ranked fourth among business property service providers in China and second among business property management service providers in Greater Bay area.。

From the perspective of property under management, excellent commercial enterprises currently account for 53.3% of the area under management.Due to the high threshold and strong professionalism of business property management, the average property management fee is 18.7 yuan per square meter, which is much higher than that of public and industrial properties and residential properties.

2. Endogenous +Extension, excellent growth prospects and certainty of excellent business enterprises

In recent years, through endogenous development and external mergers and acquisitions, the business of Zhuoyue has expanded rapidly and promoted steady growth in performance.。

As of May 31, 2020, 45 projects in the management project of excellent business enterprises came from the excellent Group, with a tube area of 10.73 million square meters, accounting for 41.6%, and 56.8% of the contract area came from the excellent Group. Relying on the excellent group of related parties, the growth of the scale of excellent commercial enterprises is guaranteed.

In addition, through mergers and acquisitions to expand Central China, the Yangtze River Delta region, excellent commercial enterprises to further improve the regional layout. At present, the total administrative area of Zhejiang Harbor, Wuhan Yuyang and Wuhan environmental trade is 3.9 million square meters, accounting for 15.1% of the total managed area.Deep ploughing the Dawan area and expanding the Yangtze River DeltaExcellent commercial enterprises are expected to continue to increase their market share and expand their scale in the target area.

The company's revenue in 2017 was 1.84 billion yuan, with a compound growth rate of 39% from 2019 to 2019, showing good growth.

The basic property management income in 2017 is 1.58 billion yuan, with a compound growth rate of 36% from 2019 to 2019. Among them, commercial property, public and industrial property and residential property accounted for 75.9%, 12.9% and 11.2% respectively.

Among the basic property management services, the commercial property gross profit margin is relatively high. In 2019, the commercial property management service gross profit margin was 25.3%, and contributed 69.9% gross profit. The gross profit margin of value-added services is stable at 25.2%, while the gross profit margin of other businesses is higher, mainly because the gross profit margin of financial services is as high as 78.9%.

Excellent commercial enterprises achieved a net profit of 230 million yuan in 2017, with a compound growth rate of 31% in 2019. It is expected that the company will maintain rapid growth as the 2-3-year contract area is fully converted to in-tube area.

Valuation and purchase proposal

The property sector is an industry with both growth and certainty in recent years. Excellent commercial enterprises as the fourth commercial property management service provider in the country, that is, they have good scale advantages, sufficient reserve area and high visibility of performance growth.Based on the track prospect and certainty, the companyIPOAt present, it has introduced Tencent Mobility, a subsidiary of Tencent., Southern Fund, Orlu Capital and other star cornerstones。

From the valuation analysis, at present, the average valuation of the 15 major property management companies listed in Hong Kong is 21.9 times that of 2020E/2021E, and the corresponding range of PE in 2021 is 8.2-37.1 times.

In 2019, the revenue of excellent commercial enterprises is 1.84 billion yuan and the net profit is 180 million yuan. The net profit of 2020E/2021E is expected to be 3.2 yuan and 520 million yuan respectively. At the offer price of HK $10.68,9.99,9.30 respectively, the total share capital of 1.2 billion shares after the issue will be HK $128.16, HK $119.88 and HK $11.16 billion respectively.Correspondence2021Year PE22.2 respectively.、20.8和19.3倍，Comparable Financial Street property and Baolong BusinessPE17.9 respectively.和34.8倍。

On the whole, the valuation of excellent business enterprises is higher in 2020, but the compound annual growth rates of performance, area under management and contracted management area in the past three years are 30.9%, 43.9% and 59.1% respectively, with excellent growth and certainty in the next 2-3 years. In addition, considering the eye-catching lineup of cornerstone investors and the high market atmosphere, the market is generally optimistic about its post-listing performance.