20220329-招银国际-卓越商企服务-06989.HK-Corporate_services_to_fuel_its_35__CAGR_plan__Maintain_Buy_4页_963kb
报告摘要
Excellence Commercial Property (6989 HK) - Company Update Summary
Core Content and Main Points
Excellence Commercial Property (6989 HK) is a leading player in the commercial property management sector, with a strong focus on value-added services (VAS) that are driving its growth. The company is currently rated as BUY with a target price of HK$14.90, indicating a potential upside of +297.1% from the current price of HK$3.75.
Key Growth Drivers
- VAS Segment Growth: The VAS segment contributed 22% to revenue in 2021, up from 14% in 2020, and saw a significant YoY growth of 118%. This segment is expected to continue driving growth due to its high service fee ratios (up to 1.25x basic management fees) and the company's dominant position in large-corporate property management (30% market share).
- NP CAGR Guidance: The company is on track for a guided 35% NP CAGR towards 2024, supported by the expansion of its VAS services and the strengthening of its value chain in commercial asset services.
- Dividend Policy: The dividend per share (DPS) increased by 279% in 2021 to HK$0.36/share, with a payout ratio of 72%, showing a generous return to shareholders.
2021 Financial Performance
- Revenue Growth: Total revenue grew by 37% YoY to RMB3.5bn, with VAS being the main driver.
- Profit Growth: Net income increased by 57% YoY to RMB510mn, and EPS rose by 24% to RMB0.42/share.
- Margin Expansion: Gross profit margin widened to 27.7% (up 1.4ppt YoY), and net profit margin expanded to 14.7% (up 1.8ppt YoY), primarily due to the higher margins in the VAS segment.
- GFA Growth: Managed GFA increased to 41.2mn sq m, with contracted GFA at 56.8mn sq m, maintaining a healthy third-party GFA contribution of 83%.
Valuation and Market Position
- Valuation: The company is trading at an attractive valuation of 5x 2022E P/E.
- Market Cap: As of the latest data, the market cap is HK$4,576 million.
- Shareholding Structure: Li Wa holds 59.4% of shares, Li Xiaoping holds 11.0%, and the free float is 29.6%.
- Share Performance: The share price has underperformed over the past 12 months, with a decline of 58.1% in absolute terms.
Key Financial Highlights
Earnings Summary
| Metric | FY18A | FY19A | FY20A | FY21A | FY22E |
|---|---|---|---|---|---|
| Revenue (RMB mn) | 1,223 | 1,836 | 2,525 | 3,467 | 4,980 |
| Net income (RMB mn) | 126 | 179 | 325 | 510 | 733 |
| EPS (RMB) | N/A | N/A | 0.34 | 0.42 | 0.60 |
| P/E (x) | N/A | N/A | 9.2 | 7.5 | 5.2 |
| P/B (x) | N/A | N/A | 1.2 | 1.1 | 0.9 |
| Yield (%) | N/A | N/A | 2.7 | 4.0 | 5.7 |
| ROE (%) | 55.4 | 59.8 | 11.2 | 15.9 | 20.7 |
Key Ratios
| Ratio | FY18A | FY19A | FY20A | FY21A | FY22E |
|---|---|---|---|---|---|
| Gross margin (%) | 24.1 | 23.6 | 26.3 | 27.7 | 26.8 |
| Net margin (%) | 10.3 | 9.7 | 12.9 | 14.7 | 14.7 |
| ROE (%) | 55.4 | 59.8 | 11.2 | 15.9 | 20.7 |
| Net gearing ratio (%) | -1.1 | -0.1 | -0.9 | -0.9 | -1.1 |
| Current ratio (x) | 1.3 | 1.0 | 3.5 | 3.1 | 2.6 |
CMBIGM Ratings and Peer Comparison
CMBIGM Ratings
- BUY: Stock with potential return of over 15% over next 12 months.
- HOLD: Stock with potential return of +15% to -10% over next 12 months.
- SELL: Stock with potential loss of over 10% over next 12 months.
Peer Comparison (P/E and Net Profit Growth)
| Company | Ticker | CMBI Rating | TP (HK$) | Last Price (HK$) | Mkt Cap (HK$ mn) | 2021 P/E | 2022E P/E | 2023E P/E | 2022E Net Profit Growth (%) | 2023E Net Profit Growth (%) |
|---|---|---|---|---|---|---|---|---|---|---|
| Country Garden Services | 6098 HK | BUY | 91.2 | 32.9 | 110,695 | 19.6 | 13.5 | 9.6 | 49.6 | 38.5 |
| CR MixC Lifestyle | 1209 HK | BUY | 56.0 | 36.0 | 82,056 | 43.2 | 30.9 | 22.9 | 37.7 | 34.4 |
| A-Living | 3319 HK | HOLD | 34.2 | 11.9 | 16,898 | 5.6 | 4.5 | 3.6 | 25.6 | 25.0 |
| Excellence CM | 6989 HK | BUY | 14.9 | 3.8 | 4,576 | 6.8 | 5.0 | 3.7 | 35.5 | 30.0 |
Summary of Key Information
- Growth Strategy: Focus on expanding VAS services, which have shown strong growth and margin expansion.
- Financial Health: The company maintains a healthy financial position with a net cash balance and a stable debt structure.
- Valuation: Trading at 5x 2022E P/E, which is considered attractive.
- Dividend Policy: Significant increase in DPS and payout ratio, indicating a commitment to shareholder returns.
- Market Position: Dominant position in large-corporate property management, contributing to growth opportunities.
- Performance Outlook: Strong earnings growth and margin expansion, with a maintained BUY rating.
Analyst Certification and Disclaimers
- The research analyst certifies that the views expressed accurately reflect their personal opinions.
- The analyst confirms no direct or indirect compensation related to the report's content.
- The report is not an offer or solicitation to buy or sell securities.
- CMBIGM is not liable for any losses or damages arising from reliance on the report.
- The report is intended solely for the use of the intended recipients and may not be reproduced or distributed without prior consent.
Conclusion
Excellence Commercial Property (6989 HK) is positioned for continued growth through its strong VAS segment and solid financial health. The company's attractive valuation and generous dividend policy support the BUY rating. Investors should consider the report's disclaimers and seek independent advice before making investment decisions.
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