Incident: On May 13, Beijing I Love My Family, a wholly-owned subsidiary of I Love My Family, signed a “Strategic Cooperation Agreement” with Jingbangda, a company under the JD Logistics Group. The two sides plan to carry out in-depth cooperation in the fields of community services, production industrial belts, commodity supply chains, service supply chains, and smart logistics.
The scale of the asset management business increased steadily, and we joined hands with JD to provide new momentum for growth. By the end of '23, the number of properties managed by the company (shared apartment) reached 271,000 units (yoy +6.7%). In 2023, the average number of days left for the company's asset management business was 8.3 days, a significant decrease of 11.7% compared to 2022, and the asset management business rental rate reached 96.4% (yoy+2.3 pct). Thanks to the increase in the scale of the company's asset management and the improvement of operating capacity, in 2023, the company's asset management business achieved GTV of 16.9 billion yuan (yoy +2.6%), and achieved operating income of 5.76 billion yuan (yoy +1.9%). 2024Q1, the company's leasing business continued to grow steadily. By the end of 24Q1, the company's Xiangyu business managed 279,000 units, an increase of 80,000 units compared to the beginning of the year. This time, we have launched all-round cooperation with JD in the field of commodity supply chain and service supply chain to effectively empower the company and continuously enhance the long-term competitiveness of the company's asset management and other businesses.
Build a complete social service ecosystem and enhance the living experience of community customers. The agreement stipulates that through “JD Service+”'s leading one-stop service platform capabilities, it helps I Love My Family to build a complete community service ecosystem, around the layout of more than 10,000 communities and nearly 3,000 stores across the country, and works with more than 30,000 agents to provide high-quality services such as installation, repair, cleaning, maintenance, and recycling of related items in the house for new, shared, and second-hand housing module customers. Using the concept of “good 4 services, adding points to life”, the community service ecosystem enhances the happy living experience guarantee for community family customers. Quality service at your fingertips.
Empower the supply chain to reduce costs and improve efficiency at the source. The agreement stipulates that, based on the capacity and resources of JD logistics services covering more than 1,000 production zones across the country, it provides an integrated supply chain solution that includes but is not limited to warehousing, transportation, delivery, product selection, quality control, etc., to create an end-to-end, one-stop, and light operation service, to provide users of I Love My Family with good quality products, shorten the time from source to consumer, ensure product freshness, and reduce operating costs for the community supply chain. At the same time, it will use the express logistics network coverage capabilities of JD Logistics to help residents easily and efficiently dispose of used clothing around more than 10,000 communities across the country, make positive contributions to the community's environmental protection and economic income growth, and achieve recycling and reuse of resources.
A variety of value-added service support opens up new quality space for asset management business. The agreement stipulates that during the cooperation period, JD Logistics will cooperate to actively connect with and introduce other resources of the JD Group, such as connecting with JD's own brands to provide customized production and quality control capabilities in the supply chain; focusing on the “construction of a home” with the Xiang Yu rental scenario: home building materials, hardware building materials, large household appliances, etc.; “Family Life”: small household appliances, daily necessities, etc., to help improve the quality of shared housing. Connect with JD Health to help My Love My Family establish community online and offline health activities to provide health consultation and services to community residents. Enhance the interaction between I love my family and residents, and form continuous business development. Connect with JD Innovative Retail to jointly build community offline activities to bring a more convenient living experience to community residents.
Profit forecasting and valuation. The company signed a strategic cooperation agreement with Jingbangda. The company's asset management and other businesses are expected to improve quality and efficiency with the help of the JD logistics supply chain, opening up room for long-term growth and imagination. We expect the company's revenue for 2024-2026 to be RMB 1333, RMB 149.5 and RMB 16.89 billion, respectively, and net profit to mother of RMB 0.7, 130, and 160 million yuan respectively. The corresponding PE is 69.0x, 40.6x, and 32.6x respectively, maintaining the “recommended” rating.
Risk warning: Strategy implementation is not effective, asset management scale expansion is not smooth, brokerage business development falls short of expectations