\u3000\u3 Ping An Bank Co.Ltd(000001) 914 China Merchants Property Operation & Service Co.Ltd(001914) )
The company disclosed its performance in 2021, achieving an operating revenue of 10.59 billion yuan, a year-on-year increase of 22.4%, and a net profit attributable to the parent company of 510 million yuan, a year-on-year increase of 17.3%.
The revenue growth rate is in line with expectations, and the performance is slightly lower than market expectations. In 2021, the company achieved steady growth in revenue. In terms of business, the property management business achieved revenue of 9.91 billion, a year-on-year increase of 23.3%, and the asset management business achieved revenue of 560 million, a year-on-year increase of 23.7%, which is in line with market expectations. Mainly due to the decline of epidemic subsidies, the growth rate of net profit attributable to the parent company was slightly lower than that of revenue. During the reporting period, the company made provision for inventory impairment losses and bad debts of accounts receivable of 160 million yuan due to left over housing development projects, resulting in the deduction of 370 million yuan of net profit not attributable to the parent company, a year-on-year decrease of 5.3%.
The gross profit margin rebounded slightly and there is still room for further improvement. The company’s overall gross profit margin in 2021 was 13.8%, up 0.2pct year-on-year. In terms of business, the gross profit margin of the industry-leading non residential infrastructure property management business was 13.6%, with a year-on-year increase of 1.7pct. The gross profit margin of the residential property management business was slightly reduced by 0.1pct to 6.6% year-on-year due to the withdrawal of the social security exemption policy. The company disclosed the details of value-added services for the first time. Among them, the gross profit margin of professional value-added services decreased by 0.4pct to 13.8% year-on-year, the revenue of platform value-added services (i.e. community value-added services) increased by nearly five times to 270 million yuan, and the gross profit margin decreased by 4.7pct to 4.9% year-on-year. In addition, considering that the government subsidy decreased by 30 million compared with the same period last year, we believe that the gross profit margin of the company still has some room for improvement, and it is expected to further integrate resources, improve quality and efficiency in the future.
The combination of external expansion, heavy and heavy separation and multiple measures is expected to boost the growth of revenue and profit. By the end of 2021, the company had 1717 property management projects, with a management area of 280 million square meters, a year-on-year increase of 47%, ranking firmly in the forefront of listed property management companies. The company made efforts in the “total to total” mode, joint venture cooperation, acquisition and acquisition and other resource acquisition channels. The newly signed annual contract amount was 3.05 billion yuan during the year, with a year-on-year increase of 24%. According to this calculation, the revenue growth rate in 2022 is considerable. The company’s expense ratio in 2021 was 6.1%, down 1.0 PCT year-on-year. Considering the stripping of some heavy asset projects at the beginning of the year, it is expected that the precipitated financial expenses are expected to be further reduced, and the company’s profit growth in 2022 is expected to be improved.
Profit forecast and investment suggestions
Maintain the overweight rating and adjust the target price to 18.41 yuan (the original target price was 21.71 yuan). According to the annual report, we reduced the growth rate of property and asset management revenue, slightly increased the gross profit margin, and adjusted the predicted value of EPS of the company from 2022 to 2024 to 0.68/0.91/1.11 yuan (the original predicted value of 20222023 was 0.78/0.95 yuan). The valuation of the comparable company in 2022 is 24x. Considering that the performance growth rate of the company in 2023 is 33%, which is higher than that of the comparable company by 29%, a 10% valuation premium is given, corresponding to 27 times PE and a target price of 18.41 yuan.
Risk tips
The stripping of real estate business is uncertain. Profit margin improvement was lower than expected. The uncertainty of expanding the market.
