View of this month: this month, many property enterprises expect high profit growth in 2021. Compared with the historical low valuation, the cost performance continues to highlight. At present, the property management policy still focuses on supporting and standardizing development. The real estate policy continues to release positive signals, and the marginal improvement of real estate financing environment and administrative regulation is expected to drive the follow-up real estate market back on track and promote the valuation and repair of animal management. Considering that the operational risks of some real estate companies have not been completely eliminated, the robustness of related real estate enterprises is also a factor to be concerned about. It is suggested to pay attention to the investment opportunities of high-quality property enterprises and pay attention to the property management leaders with outstanding comprehensive strength, such as country garden service, poly property, xinchengyue service, Jinke service, etc. At the same time, it is suggested to pay attention to commercial operators who occupy high-quality business management tracks and have strong asset light output strength, such as Xingsheng commerce.
Policy: support and standardize development. In February, the relevant policies of property management mainly involved the updating and implementation of local property management regulations, the optimization of property management system, the pilot support of “property service + elderly care service”, the publication of typical cases of “strengthening property management and building a better home”, the implementation of the requirements for the prevention and control of property management epidemic, and the acceleration of the construction of urban environmental infrastructure and the transformation of old residential areas. The policy tone remains to support and standardize development.
Acquisition and Merger: the attitude tends to be cautious. In February, there were mergers and acquisitions of country garden service, everythings Liangxing and Jinke service. From the perspective of M & a trend, the amount of M & a received in January was 3.62 billion yuan, an increase of 16.7% month on month; The number of mergers and acquisitions is lower than that of December 18, 2021; M & a valuation is lower than that in the early stage. Under the subsequent capital constraints, the attitude of the acquirer is expected to remain cautious and the valuation will maintain a reasonable level.
Material enterprises: high expected performance. In February, a number of property companies issued positive profit forecasts and expected a profit increase of no less than 40% in 2021. Among them, China Resources Vientiane life is expected to grow by 105115%, with a top growth rate. The performance growth was mainly due to the improvement of the management scale, the decline of the expense rate, and the good development of the projects in operation and value-added services. In addition, in February, some material enterprises experienced personnel changes such as the replacement of CEO, executive director and CEO; In February, Greentown Management Holdings was incorporated into the constituent stocks of Hang Seng Composite Index, which came into effect on March 7, 2022.
Market: underperforming the market with low valuation. In February, the Hang Seng property service and management index fell by 7.6%, underperforming the Hang Seng Index by 3.1 percentage points; The average PE (TTM) of its constituent stocks is 18.7 times, which is at the 0.9% quantile since 2016. The top three growth rates of listed property enterprises in February were China Austria home (6.9%), blessing life service (6.3%) and Yuexiu service (4.4%); The top three PE (2022e) at the end of the period are CR Vientiane life (34.3 times), New Dazheng Property Group Co.Ltd(002968) (23.5 times) and CNOOC property (23.3 times). In February, the top three net purchases of Hong Kong stock connect were Evergrande property (30.33 million shares), Jinke service (11.27 million shares) and Xuhui Yongsheng service (1.24 million shares); At the end of the period, the top three positions of Hong Kong stock connect were Evergrande property, Zhonghai property and country garden services, and the top three in the proportion of circulating shares were poly property, Zhonghai property and Jinke services.
Risk tips: 1) adjust the risk according to the performance guidance; 2) Risk of declining profitability; 3) The promotion process of diversified business is less than the expected risk.
