\u3000\u3 Ping An Bank Co.Ltd(000001) 914 China Merchants Property Operation & Service Co.Ltd(001914) )
Core view
One hundred years of inheritance, carry forward the past and forge ahead into the future. In 2019, the company was reorganized, renamed and listed, clearly taking “12347” as the development strategy, and established the company’s leading position in the property management industry. The largest shareholder of the company is China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) , which is backed by state-owned assets. The actual ultimate controller is the investment promotion department, AVIC department and poly department under the SASAC, holding more than 60% of the shares, and the ownership structure is stable. After the reorganization and listing, the Department integration of the company has progressed smoothly, and the business structure has been continuously improved. The property management revenue accounted for 94% in 2021. With the continuous maturity of business structure, the improvement of business efficiency, the continuous delivery of new residential buildings and the continuous expansion of high gross profit non residential business, the profitability of the company still has great room for improvement. Backed by central enterprises, the advantages of endogenous and extension are prominent. The parent company China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has outstanding strength and maintains excellent finance and stable sales growth in the current weak market environment. The company has 625 residential projects under management, with an area of 120 million square meters, of which the area under management from the parent company is 70 million square meters, accounting for 64.7% of the total area under management. In recent years, China Merchants Shekou Industrial Zone Holdings Co.Ltd(001979) has maintained stable sales growth and land acquisition. In the future, it will more effectively support the development of the property sector, and the growth certainty of the company’s area under management in the future is guaranteed.
Non residential sector leader, significantly benefited from the restructuring of the market structure. The company actively promotes the “big property” strategy, with balanced business layout. The area under management of non residential business is basically the same as that of residential business. At the same time, the contribution income of non residential business is high. By the end of 2021, the company has implemented M & A projects for the first time since the integration. In the future, it can not only benefit from the resource advantages of the parent company of large and medium-sized state-owned enterprise developers, but also benefit from the reconstruction of the industry pattern, and benefit from fresh project resources as a “credit intermediary”. At the beginning of this year, the company launched the heavy asset stripping procedure, which is conducive to optimizing the asset and debt structure of the company and improving the overall asset operation efficiency. If the heavy assets of the company are revalued after being realized according to the book value, the current valuation level of the company is at the low level of the industry.
Profit forecast and Valuation: the company is backed by central enterprises, with outstanding endogenous and extension advantages. As a leader in the non residential field, the company has a balanced business layout, which will significantly benefit from the reconstruction of the market pattern. Based on the absolute and relative valuation results, we believe that the stock value of the company is between 20.55 and 22.13 yuan, which is 36.5% to 46.9% higher than the current stock price. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 650 million yuan, 830 million yuan and 1.01 billion yuan, with a year-on-year increase of 26.7%, 28.1% and 21.5% respectively. According to the latest share capital, the earnings per share will be 0.61 yuan, 0.79 yuan and 0.95 yuan respectively, and the corresponding PE will be 24.6 19.2, 15.8x, maintain the “buy” rating.
Risk tip: the real estate development went down more than expected; The growth of the company’s area under management is less than expected; The gross profit margin fell more than expected; Less than expected progress of divestiture of assets
