Event: New Hope Services announces 2023 results report. Throughout 2023, the company achieved operating income of 1.26 billion yuan (yoy +10.7%); achieved net profit of 220 million yuan (yoy +5.9%); and paid an annual dividend of 0.158 yuan/share (twice a year) throughout the year, with a dividend rate of 60% and a dividend ratio of 12.6%.
Both revenue and net profit increased, and net cash flow from operating activities increased. In terms of revenue: The company achieved revenue of 1.26 billion yuan (yoy +10.7%) for the full year of 2023, of which property management service revenue was 650 million yuan (yoy +32.5%), accounting for 51.3% of the company's total revenue, contributing to the main revenue growth. The growth in this business scale was mainly due to the continuous expansion of the company's management projects; in terms of profit: The company's rate management rate achieved 13.4% (yoy-0.5pct) in 2023, thanks to the company's lean rate control, The company achieved net profit of 220 million yuan (yoy +5.9%) in 2023; in terms of cash flow: The company's net cash flow from operating activities in 2023 was 330 million yuan (yoy +83.3%), and the company's business achieved high-quality management.
“Deep Regional Cultivation” + “Active Outreach” have achieved remarkable results, and the company's property management/contract area has grown steadily.
By the end of 2023, the company had accumulated a total property management area of 32.26 million square meters (yoy +11.9%) and a property contract area of 38.17 million square meters (yoy +5.6%). The steady expansion of the company's scale benefited from: ① The company continued to cultivate the southwest and east China regions. The revenue contribution of the three cities of Chengdu, Kunming and Wenzhou in 2023 accounted for 60.9% of the company's total revenue. At the end of 2023, the company's market externalization contributed 95.8% of the company's total revenue; ② As of 2023, the company's market externalization contributed 95.8% of the company's total revenue With a managed area of 10.25 million square meters (accounting for 31.8% of the total property under management area), the company's market-based expansion contract area is 11.63 million square meters (accounting for 30.5% of the total property contract area), and the company's independent expansion advantages continue to expand.
The dividend rate is as high as 12.6%, which highlights the high dividend value. The board of directors of the company recommended declaring a final dividend of 0.091 yuan/share for the year ended December 31, 2023, with a cumulative annual dividend of 0.158 yuan/share (including an interim dividend of 0.067 yuan/share). The company pays dividends twice a year, with a dividend rate of up to 60% and a dividend rate of up to 12.6%. It is worth embracing the certainty brought by high dividends.
Profit forecasting and valuation: The company's revenue and net profit have both grown. “Deep regional cultivation” + “active outreach” has achieved remarkable results. The dividend rate is as high as 12.6%. The certainty brought about by the steady growth in company size and profit and high dividends is worth paying attention to. We expect the company's 24-26 revenue to be 14.7, 16.5, and 1.79 billion yuan, and net profit of 2.3, 250, and 260 million yuan, corresponding PE of 4.5, 4.2, and 4.1 times, respectively. For the first time, coverage was given a “recommended” rating.
Risk warning: The scale of delivery by related housing enterprises has shrunk; rate control is not effective; business development is slowing down.