\u3000\u3000 New Dazheng Property Group Co.Ltd(002968) (002968)
The company released the performance forecast for 2021. In 2021, the annual revenue is expected to reach 2.09-2.1 billion yuan, with a year-on-year increase of 58.5% – 59.3%, the net profit attributable to the parent company is 164-168 million yuan, with a year-on-year increase of 25.0% – 28.0%, and the net profit after deduction is 149-153 million yuan, with a year-on-year increase of 31.0% – 34.5%.
The rapid development of outward expansion has helped the revenue increase significantly. The company announced that the revenue growth center was 58.9%, achieving a substantial growth, mainly due to the implementation of projects brought by market expansion and M & A, as well as the continuous improvement of extended services and value-added services. In 2021, the total bid winning amount of new expansion projects was about 1.7 billion yuan, and the saturated annualized contract revenue was about 800 million yuan, an increase of about 74% over 2020. From the perspective of outward expansion amount, we expect that the revenue growth will continue to maintain rapid growth.
The nationwide layout was accelerated, and there was a breakthrough in value-added services. The expansion volume of the company’s new expansion projects outside Chongqing accounts for about 80%, and the national expansion ability has been tested by the market. While maintaining high-speed expansion, the company’s project renewal rate remains at a high level of 94%, with high customer stickiness, so as to ensure the sustainability of performance. In addition, the company’s extension and value-added services achieved an operating revenue of about 150 million yuan, continuously improving the service value.
The expansion period brings higher current expenditure, but helps to consolidate long-term competitiveness. The company’s performance growth is less than its revenue, mainly due to the pre expenditure brought by the initial investment in foreign market expansion and the increase of new projects; The preferential social security policies in Chongqing have gradually expired, increasing labor costs; Amortization expenses of equity incentive, etc. According to the deduction criteria, the profit growth center of the company is 32.8%. If the impact of share price incentive expenses is excluded, the growth center of net profit attributable to the parent company will achieve 37.6%. We believe that as an independent third-party property company, it is inevitable to bear the pain of profit pressure during the expansion period. With the improvement of scale effect and management efficiency, the company’s long-term competitiveness will be further improved.
Profit forecast and investment suggestions
Maintain the buy rating and adjust the target price to 48.81 yuan (the original target price is 48.26 yuan). Taking into account the company’s expenditure in the expansion stage and the phased high expense rate caused by the amortization of equity incentive expenses, we adjusted the company’s EPS forecast from 2021 to 2023 to 1.02/1.63/2.43 yuan (the original forecast was 1.10/1.66/2.46 yuan), and the comparable company’s valuation in 2022 was 24x. Considering the company’s performance growth and competitive advantage in the institutional property track, we maintain a 25% valuation premium, corresponding to 30x PE in 2022 and a target price of 48.81 yuan.
Risk tips
The epidemic situation affects the rhythm of completion and delivery. The uncertainty of expanding the market. The uncertainty of welfare security policy.
