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年收入同比增長0.4％，至154億元人民幣，比中銀國際和市場預期低0.7％和3.4％。所有細分市場均以個位數增長，但由於關聯方面臨挑戰，擴展增值服務（面向開發商）同比下降46.6％。毛利率縮小了4.9個百分點至17.1％，比中銀國際和市場預期低2.5個百分點和3.2個百分點，部分原因是與改善服務質量和設備維修相關的支出增加，部分原因是收入結構的變化。銷售和收購佔收入的百分比維持在6.1％。A-Living記錄了人民幣5.35億元的應收賬款減值，比上年增長了14.9％，商譽減值首次出現了4.28億元人民幣。結果，淨利潤同比下降74.9％至人民幣4.61億元。我們計算，不包括一次性項目，歸屬於股東的核心淨利潤爲人民幣13億元，同比下降38.4％，比中銀國際和市場預期低15.2％和14.4％。運營現金流超過9億元人民幣。該公司於2023年恢復分紅，報告的淨利潤的派息率爲26.2％。考慮到利潤率下降和擴大增值服務收入的下降，我們將2024-25年度的核心每股收益分別下調了26.6-31.0％。我們還將目標價下調了53.5％，至3.36港元。一方面，OCF在2023年顯著改善，另一方面，盈利能力和向關聯方收取現金的不確定性仍然很高。降級至 HOLD 評級。
Key Factors for Rating
評級的關鍵因素
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保持了行業領先的市場擴張能力，2023年新簽約的總建築面積達到6000萬平方米，與2022年相似。但是，該公司還終止了盈利能力或現金流不佳的項目，因此合同總建築面積增加了3510萬平方米，達到7.666億平方米。新獲得的合同價值爲13億元人民幣，同比下降48％。管理的總建築面積增加了4,470萬平方米，達到5.905億平方米。住宅、公共及商業項目分別佔所管理建築面積的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.
社區增值稅收入僅同比小幅增長0.6％，細分市場毛利率縮小了12.8個百分點。部分原因是房屋裝飾和停車場銷售等房地產市場相關業務的下滑，這些業務的利潤率也有所提高。A-Living正在將重點重新放在更具可持續性的業務上，這些業務與物業管理具有更大的協同作用，包括團體餐飲、節能和生活服務。
Key Risks for Rating
評級的主要風險
Upside: dividend payout ratio has upside if positive cash flow persists
好處：如果現金流持續正值，股息支付率有上行空間
Downside: competition in the public segment may be intensified
缺點：公共領域的競爭可能會加劇
譯文內容由第三人軟體翻譯。