View of this month: in mid and early March, the property management sector was significantly adjusted due to concerns about private enterprise credit and real estate development; In the middle and late part of the year, with the substantial improvement of the real estate policy and the release of the downward pressure on the performance of mainstream enterprises after the setting of the tone by the financial commission of the State Council, it gradually rebounded. At the current time point, the introduction of real estate policies is accelerated, and the mainstream material enterprises correspond to about 20 times of PE in 2022. After the medium-term target is revised down, it still maintains an increase of 25-50%, and the valuation is still cost-effective. Subsequently, with the deregulation of real estate policies promoting the stabilization and improvement of the property market, the valuation of mainstream property enterprises is expected to continue to repair. It is suggested to attach importance 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, China Merchants Property Operation & Service Co.Ltd(001914) , Jinke service, xinchengyue 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: improve flexibility and accuracy, and support development in multiple dimensions. The contents related to property management in the government work report of the two sessions in March include continuously deepening integration into grass-roots social governance, improving community pension mechanism and grass-roots data construction, revitalizing community consumption momentum, etc. Local policies involve the classification of property services, market-oriented adjustment of property fees, decentralization of the acceptance authority of special maintenance funds, etc. On the whole, property management has a clear positioning of grass-roots social governance, and the flexibility of supervision has been improved. At the same time, community consumption and community digitization are still the direction of support.
M & A: the amount decreased year-on-year, and the attitude tends to be cautious. In March, country garden service completed the equity transfer of Zhongliang Baiyue Zhijia, and paid the consideration by business and stage, so as to ensure the safety of M & a funds and the smooth acquisition of the project. From January to March, the M & A amount of property management collection was 6.77 billion yuan, a year-on-year decrease of 32.9% and a slight increase of 2.1% month on month compared with 2021q4. Under the demands of subsequent scale development, M & A is still an important means of expansion. However, considering the strengthening of market expansion ability and the reduction of refinancing expectation, the attitude of M & A parties is expected to remain relatively cautious.
Material enterprises: the performance of mainstream participants has increased significantly, and the target for senior high school is still set. In March, the property management enterprises released their annual results. The overall revenue of 23 mainstream property enterprises increased by 49.7% year-on-year, and the net profit attributable to the parent increased by 53% year-on-year. Under the background that the incremental space of subsequent industries still exists and the pattern is scattered, the mainstream material enterprises are still expected to achieve rapid development, and the performance growth target of 25-50% is still set in the medium-term dimension of 2-4 years. After the performance period, Xincheng Yue service, Xingsheng commerce and other executives and shareholders increased their shares, demonstrating medium – and long-term confidence.
Market: it rebounded gradually in mid and late March, and the valuation is still at an all-time low. The Hang Seng property service and management index has risen by 28.5% since mid and late March (2022 / 3 / 15 to 2022 / 4 / 14), outperforming the Hang Seng Index by 18.3 percentage points. As of April 14, 2022, the average PE (TTM) of Hang Seng property service and management index was about 15.5 times, at the 0.9% quantile since 2016. In March, the rise and fall of central state-owned enterprises was slightly better than that of private enterprises; Among the listed real estate enterprises, Shenzhen Sdg Service Co.Ltd(300917) (+ 70.6%), China Merchants Property Operation & Service Co.Ltd(001914) (+ 12.5%), financial services (+ 11.6%), and Shenzhen Sdg Service Co.Ltd(300917) (38.3 times), China Resources Vientiane life (32 times), China Merchants Property Operation & Service Co.Ltd(001914) (27 times) pe (2022e) are among the top valuations.
Risk tips: 1) the adjustment range and time of real estate exceed the expected risk; 2) Downside risk of profit margin; 3) The risk of exceeding the expected impairment of receivables.
