The company has crossed the dormant period after the transformation, and the revenue has accelerated under the transformation strategy with "light asset operation" as the core. The company's 21-year homing net profit is impacted by prudent impairment, but does not affect long-term value.
We forecast that the company's annual EPS in 2021-22-23 will be-0.06,0.12,0.13 Hong Kong dollars per share respectively. Give the target price HK $2.16, cover for the first time, and give a "buy" investment rating.
Iron ore industry giant after the transformation of light acceleration "running". Since 2017, Shoucheng Holdings has anchored its transformed business in parking asset investment operation and domestic private equity fund management through a series of asset divestitures, mergers and acquisitions. After the transformation, the company's business structure has been transformed from a typical cyclical industry to a parking business and infrastructure real estate fund business that spans the economic cycle, has good cash flow, and operates stably and healthily.
In 2020, revenue from the parking asset management business rose rapidly to HK $481 million, a year-on-year growth rate of 172 per cent.
The company's fund management business grew steadily in 2020, with revenue of HK $213 million, an increase of 18% over the same period last year.
With the increase of policy, the parking industry has ushered in a "golden age". We conservatively estimate that by 2020, the national demand for parking spaces will reach 281 million, and the gap of parking spaces is estimated to be about 80 million. With the introduction of relevant guiding policies, we believe that the market of the parking industry will usher in a "golden period" of rapid development. The overall market size will expand rapidly.
Fund management cut into the "Urban Renewal" track, full-chain operation to create benchmarking projects. With the dredging of industries that do not meet the latest positioning in key cities, and the accelerated aging of old urban areas, urban comprehensive services around urban renewal have broad market prospects. the first holding advantage of sitting on core projects such as "Beijing Shougang Park" and heavyweight investors such as social security funds is obvious.
Light asset operation to reduce the leverage burden, through the underlying asset investment and financial management and withdrawal. On the asset side, the first course Holdings absorbs many high-quality long-term investors, and invests the funds mainly in management rights and income rights, which significantly reduces the asset-liability ratio; on the income side, the company relies on innovative formats and intelligent management systems to pry the operating lever, improve the capital operation efficiency, and achieve the improvement of gross profit margin.
Risk tips: 1, the company's parking business accounts receivable bad debt risk; 2, parking business expansion bidding is fierce, the expansion speed is not as fast as expected risk
The company is a rare integrated operator of infrastructure assets. The company has crossed the dormant period after the transformation, and the revenue has accelerated under the transformation strategy with "light asset operation" as the core. 2021 homing net profit is impacted by prudent impairment, but does not affect subsequent performance. We forecast that the company's annual EPS in 2021-22-23 will be-0.06,0.12,0.13 Hong Kong dollars per share respectively. With reference to the valuation of light asset companies, the company is valued at 18 times PE in 2022, corresponding to the target price of HK $2.16. Cover for the first time and give a "buy" investment rating.