GREENTOWN SERVICE(02869.HK):COUNTER-CYCLICAL GROWTH AND IMPROVED PROFITABILITY IN 1H2024 MAINTAIN "BUY"
GREENTOWN SERVICE(02869.HK):COUNTER-CYCLICAL GROWTH AND IMPROVED PROFITABILITY IN 1H2024 MAINTAIN "BUY"
Attractive share scheme for employees and higher 2024 profit guidance. On 26 Jun. 2024, the Company announced to grant share options to the management and employees tied to certain performance targets, such as 2024/ 2025/ 2026 core operating profit should grow not less than 20%/ 40%/ 60% of that in 2023. Considering that the Company's core operating profit achieved over 25% YoY growth in 1H2024, we believe the profit target for the year of 2024 is not hard to achieve. Furthermore, considering its continuous improvement in profitability, we also expect the Company to achieve its 2025 and 2026 profit targets.We maintain "Buy" investment rating and revise up our TP to HK$4.00. For the next few years, we believe the Company will continuously benefit from 1) solid third-party expansion; and 2) its efficiency improvement. We revise up Greentown Service's (the "Company") 2024F-2026F EPS forecasts to RMB0.232, RMB0.271 and RMB0.321, respectively, at a CAGR of 19.4% during 2023-2026F. We revise up our TP to HK$4.00, by applying 16.0x 2024F PER.
我們維持 "買入" 的投資評級，並將目標價上調至HK$4.00。在未來幾年中，我們認爲公司將持續受益於：1）實力第三方擴張；和2）效率提升。我們將綠城服務（以下簡稱 "公司"）2024F-2026F的每股收益預測分別修訂至RMB0.232、RMB0.271和RMB0.321，預計2023-2026F年間複合年增長率爲19.4%。我們將目標價上調至HK$4.00，根據2024F年度市盈率16.0倍進行估值。
1H2024 results beat market and our expectations. The Company delivered outstanding 1H2024 results among its peers. In 1H2024, the Company's total revenue recorded steady growth of 10.6% YoY to RMB9,068 mn. Among the total revenue, property services continued to be the largest revenue contributor, which recorded stronger growth at 14.6% YoY. Thanks to its effective cost reduction, in 1H2024, the Company's core operating profit increased by 25.8% YoY to RMB893 mn. 1H2024 shareholders' net profit also recorded consistent growth, reaching RMB505 mn, up by 21.5% YoY. The management declared no interim dividend for this year.
2024年上半年業績超出市場和我們的預期。公司在同行業中表現出色，2024年上半年總收入同比增長10.6%，達到RMB9,068 mn。其中，物業服務繼續成爲最大的收入貢獻者，實現了14.6%的同比增長。得益於有效的成本降低，在2024年上半年，公司的核心營業利潤同比增長25.8%，達到RMB893 mn。2024年上半年股東淨利潤也實現了持續增長，達到RMB505 mn，同比增長21.5%。管理層宣佈今年不派發中期股息。
Profitability has achieved some results by effective cost control. Although the property sector is facing continuous profitability pressure, the Company improved its gross profit margin and further lowered its SG&A ratio. In 1H2024, the Company's gross profit margin in property services improved by 1.1 ppts YoY to 14.9%, while the SG&A ratio declined by 0.6 ppts YoY to 7.6%. The increase in the number of employees also reflected the Company's improved labor efficiency per capita. The total number of employees only increased by 6.3% YoY by mid-2024. Meanwhile, revenue grew by 10.6% YoY in 1H2024.
通過有效的成本控制，公司的盈利能力取得了一些成果。儘管房地產行業面臨持續的盈利壓力，公司改善了物業服務的毛利率，並進一步降低了銷售和行政費用率。2024年上半年，公司物業服務部門的毛利率同比提高1.1個百分點，達到14.9%，銷售和行政費用率同比下降0.6個百分點，達到7.6%。員工數量的增加也反映了公司每人勞動效率的提高。到2024年中期，員工總數同比僅增長了6.3%。同時，2024年上半年收入同比增長10.6%。
Attractive share scheme for employees and higher 2024 profit guidance. On 26 Jun. 2024, the Company announced to grant share options to the management and employees tied to certain performance targets, such as 2024/ 2025/ 2026 core operating profit should grow not less than 20%/ 40%/ 60% of that in 2023. Considering that the Company's core operating profit achieved over 25% YoY growth in 1H2024, we believe the profit target for the year of 2024 is not hard to achieve. Furthermore, considering its continuous improvement in profitability, we also expect the Company to achieve its 2025 and 2026 profit targets.
員工享有具有吸引力的股權計劃和更高的2024年盈利指引。2024年6月26日，公司宣佈向管理層和員工授予與業績目標相關的期權，例如2024/2025/2026年核心營業利潤應至少增長乘以2023年核心營業利潤的20%/40%/60%。考慮到公司2024年上半年核心營業利潤同比增長超過25%，我們認爲2024年的利潤目標並不難以實現。此外，考慮到公司持續改善的盈利能力，我們也預計公司將實現其2025年和2026年的盈利目標。
Catalysts: 1) Market share gains; 2) fast growth from the development of the Company's VAS; and 3) more cooperation with local governments and SOEs.
催化劑：1）市場份額增長；2）從公司的增值服務的快速增長；和3）與地方政府和國有企業的更多合作。
Downside risks: 1) Real estate market slump worsens; 2) hurdles in raising property management fee; and 3) impairment risk from account receivables.
下行風險：1）房地產市場下滑惡化；2）提高物業管理費的障礙；和3）應收賬款的減值風險。
譯文內容由第三人軟體翻譯。
