Ping An View:
The high growth continues, and the results of improving quality and efficiency are gradually showing: in 2021, the overall revenue of 23 mainstream material enterprises increased by 49.7% year-on-year, and the net profit attributable to the parent increased by 53% year-on-year, 7.5% higher and 8.6% lower than that in 2020. Under the background of cost reduction and efficiency increase, technology empowerment and improvement of business structure, the overall gross profit margin of mainstream material enterprises increased by 0.3 percentage points to 26.7% year-on-year, and the management expense rate decreased by 0.5 percentage points to 8.6% year-on-year. Looking forward to the future, driven by factors such as the existence of industry increment space and decentralized pattern, mainstream material enterprises are still expected to achieve rapid growth, and the medium-term dimension still sets a performance target of 25-50%. The rising rigidity of labor costs and the increase of market-oriented projects may bring downward pressure on profitability. Effective hedging may be formed through deep cultivation and digital empowerment in advantageous areas.
The degree of marketization has deepened and the trend of the whole business format has emerged: at the end of 2021, 20 mainstream property enterprises had a total area under management of 4.38 billion square meters, a year-on-year increase of 53%; The overall contract area ratio of 17 property enterprises is 1.61 times, and the short-term performance growth is guaranteed. In 2021, the third-party expansion of mainstream property enterprises continued to accelerate. At the end of the year, the average proportion of the third-party in the management area rose to 54.9%, and the average proportion of the third-party contract area rose to 62.1%. Non related party projects have accounted for half of the country. By expanding the team and increasing incentives, the market-oriented expansion ability (non revenue M & A) of mainstream material enterprises has gradually formed and become an important source of scale expansion. In terms of business type, the average proportion of non residential area under management of 12 property enterprises that have disclosed data rose to 31.6% in 2021. In the face of challenges in the penetration rate of existing houses and the improvement of residential property management fees, non residential areas such as commercial offices and public buildings have also become the focus of expansion, and some property enterprises have the ability of full-scale service.
The community value-added framework has been improved, and the business management operation has achieved good results: in 2021, the average proportion of community value-added service revenue of 16 mainstream property enterprises rose to 18.3%, and the average proportion of gross profit rose to 27.4%. More than half of enterprises’ community value-added services have become the second largest source of income and profit. At present, the subdivided value-added services cover community retail, Meiju, real estate brokerage, group meal, sojourn, etc. the establishment of the subdivided business framework has been basically completed, and the multi business model has been successfully opened. The follow-up focus is on deep cultivation and careful work to consolidate the advantages. In 2021, COSCO services, country garden services and other enterprises added business management business, and business management players continued to expand. Among them, China Resources Vientiane life and Baolong business scale are absolutely leading. From the perspective of the rental rate and retail sales of shopping centers reflecting the operating results, the rental rate of shopping centers managed by enterprises is mostly around 90%. The retail sales increased by more than 20% in 2021. Excluding the impact of the epidemic, it also increased by 5% compared with 2019.
Investment suggestion: in 2021, the performance of mainstream enterprises continued to increase, the growth continued to be verified, the business development was significantly optimized, and has entered a new stage of independent and comprehensive development. The property management sector continued to adjust in the early stage, which was mainly affected by the growth and independence concerns caused by the real estate dilemma. At present, the real estate policy has been substantially improved, and the downward pressure on the performance of mainstream enterprises has been gradually released. At present, the mainstream property management enterprises correspond to about 20 times of PE in 2022, and still set a growth target of 25-50% in the next few years. The investment value continues to highlight. It is suggested to pay attention to country garden services, poly property, China Merchants Property Operation & Service Co.Ltd(001914) , Jinke services, xinchengyue services, Xingsheng commerce, rongchuang services, etc.
Risk tips: 1) the adjustment range and time of real estate exceed the expected risk; 2) Downside risk of property management profit margin; 3) The risk of exceeding the expected impairment of receivables.
