\u3000\u3 Ping An Bank Co.Ltd(000001) 914 China Merchants Property Operation & Service Co.Ltd(001914) )
Event: on March 18, 2022, the company released the 2021 annual performance report. During the reporting period, the company realized an operating revenue of 10.59 billion yuan, an increase of 22.42% over the same period of last year; The net profit attributable to the shareholders of the listed company was 513 million yuan, an increase of 17.25% over the same period last year; The average earnings per share was 0.48 yuan, an increase of 17.26% over the same period last year; The weighted return on net assets was 6.07% (5.37% in the same period last year).
Comments: continue to promote the implementation of “fertile soil Yunlin”, highlight the value-added highlights of the platform, and make full efforts to expand non residential areas. 1) continue to promote the implementation of “fertile soil Yunlin” business model: in 2021, the company continued to promote the implementation of the company’s “fertile soil Yunlin” business model by focusing on integration and efficiency, market expansion and quality improvement. In 2021, the annual newly signed contract amount of the company was 3.05 billion yuan, with a year-on-year increase of 24.2% (the annual newly signed contract amount in 2020 was 2.46 billion yuan). By the end of 2021, the company had 1717 property projects under management (1438 and 1198 in 2020 and 2019 respectively), with a management area of 280 million square meters (190 million square meters and 150 million square meters in 2020 and 2019 respectively). The market expansion was steadily promoted.
2) highlight the value-added highlights of the platform and orderly recovery of asset management business: China Merchants “jiajiahui” is committed to becoming the leading asset light platform operator of property private domain traffic, and carry out value-added services of multiple business lines such as “enterprise centralized purchase + high-quality life + community resource operation”, with prominent business highlights. In 2021, the revenue of platform value-added services was about 270 million yuan, a year-on-year increase of 494%; With the gradual decline of the impact of covid-19 epidemic and the orderly recovery of asset management business, the annual revenue in 2021 was about 560 million yuan, a year-on-year increase of 23.7%; Among them, the revenue of property rental and operation was about 500 million yuan, with a year-on-year increase of 21%; The revenue of commercial operation sector was about 58.4 million yuan, with a year-on-year increase of 52.6%; The gross profit margin of the asset management sector remains relatively high. The gross profit margin of the property rental and operation sector is about 58%, and that of the commercial operation sector is about 42%.
3) fierce competition and comprehensive expansion of non residential business: the company’s annual report shows that the current third-party market expansion competition in the property management industry is fierce. In the information released by the third-party market bidding of the industry in 2021, non residential business accounted for more than 80%. The company continued to consolidate its leading edge in the non residential market, and the expansion of advantageous business forms in office / Park increased rapidly. The number of projects above 10 million increased by 43% year-on-year; In 2021, the newly increased area under management of about 90 million square meters, the newly increased non residential area under management of more than 70 million square meters, of which the third-party external expansion achieved more than 68 million square meters.
Profit forecast, valuation and rating: the company’s operation is stable and orderly, the highlights of platform value-added are prominent, the asset management business is restored in an orderly manner, and the third-party expansion of non residential projects is in full swing; In view of the intensified competition in outsourcing in the property management industry, the gross profit margin of outsourcing projects has a downward trend, and there is still uncertainty about the repeated impact of covid-19 epidemic on the company’s asset management business, we lowered the company’s forecast of net profit attributable to the parent company in 202223 to 611 million yuan (down 9.5%), 719 million yuan (down 14.2%), and increased the forecast of net profit attributable to the parent company in 2024 to 844 million yuan; The PE valuation of the current stock price corresponding to the profit forecast for 202224 is 25, 21 and 18 times; As a leading property management company with strong scarcity of a shares, the company’s recent stock price correction is obvious, the valuation has strong attraction, and maintains the “buy” rating.
Risk tip: covid-19 epidemic repeatedly has great uncertainty on the impact on the company’s asset management sector, and there is uncertainty on the downward range of gross profit margin caused by the intensification of outward expansion competition.
