【行业研究报告】碧桂园服务-1H22 preview: results may beat but AR takes time

PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGEPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGEMOREREPORTSFROMBLOOMBERG:RESPCMBRORhttp://www.cmbi.com.hkChinaPropertyServiceSectorJeffreyZeng(852)39163727jeffreyzeng@cmbi.com.hkXiaoXiao(852)37618952xiaoxiao@cmbi.com.hkZhangMiaozhangmiao@cmbi.com.hkStockDataMktCap(HK$mn)111,521Avg3mthst/o(HK$mn)557.7352wHigh/Low(HK$)81.85/22.80TotalIssuedShares(mn)3,369Source:BloombergShareholdingStructureChenChong45.1%JPM5.7%Freefloat48.7%Source:HKExSharePerformanceAbsoluteRelative1-mth12.8%21.8%3-mth-13.1%13.4%6-mth-24.3%6.2%12-mth-58.2%-45.0%Source:Bloomberg12-mthPricePerformanceSource:BloombergAuditor:PwC0102030405060708090Jul-21Oct-21Jan-22Apr-22Jul-226098HKHSI(rebased)(HK$)BUY(Maintain)TargetPriceHK$47.63Up/Downside+43.9%CurrentPriceHK$33.1016Jul2022WeforecastCGSwilldeliverslightlybetter-than-expected1H22EresultswithrevenueandNPtogrow49%/39%YoY(vs.marketexpectationof30-35%).BotharemainlysupportedbytheconsolidationofM&Assince2H21andthenewbusiness(commercialoperation).However,accountreceivablesarestillyettoimproveduetochallengingmacrofordevelopersandthismayneutralizethequalityofitsbottomlinegrowth.Valuation-wise,currentlythecompanyistradingat16x2022EPE,below1-stddeviationof25xandlooksstillattractive.Weexpectafurtherre-ratingifARisimprovingin2H22Eandparentco’ssalescouldfurtherimprovetoself-proveitsliquidityposition.MaintainBUYrating.Segmentsindetails(Figure1):-TraditionalPM(64%ofgroup)islikelytogrow62%YoYtoRMB11bnandbecomesthebiggestrevenuedriverfor1H22.TheincreaseismainlycomingfromtheconsolidationandcompletionofmajoracquisitionssuchasLanguangJusbon,R&FPMandFantasiain2H21.ThishasdrivenmanagedGFAto672mnsqmbyDec21endvs.429mnsqminJun21(+57%HoH)andweexpecttoreach720mnsqmbyJun22.ForGPmargin,weexpect30%in1H22Etobeinlinewiththeguidance.-Commercialoperationisfillingthevoid:CGSjuststarteditscommercialoperationforshoppingmallswithover100projects(5mnsqm)andrecordedRMB654mnin2H21.WeexpectthisnumbertogrowtoRMB800mnin1H22Eduetostilllowbase.ForGPmargin,weexpect50%in1H22E-CommunityVASmaysee11%YoYriseonfurtherpenetrationofitsgrouppurchasing/advertisementbusiness,butmayoffsetbyothersegments.GPMisestimatedtostayat60%.-Non-ownerVAS:Weexpect7%YoYincreasewhichhasreflectedbya40%YoYdeclineinparentco’ssales.However,CGShasaddedservicefeeofcarpark/housingsalesintothiscategoryaggressivelysince2H21anditwillhelpsupport1H22Erevenue.WeforecastGPMat40%.Improvementofaccountreceivablesmaywaituntil2H22E:Torecall,theCompanysawahugeincreaseintradereceivablebyRMB10bnin2021(+200%YoY)toRMB15bn.ThemajorityiscomingfromM&Aacquisitions(R&F,Languang)andcityservices.Duetothestillchallengingmacroenvironmentin1H22,especiallyfordevelopers,wedonotexpectmuchimprovementcomparedtoDec2021andARmayremainatRMB15bn,flattishHoH.EarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)15,60028,84343,30361,95586,155YoYgrowth(%)61.784.950.143.139.1Netincome(RMBmn)2,6864,0335,6627,86310,899EPS(RMB)0.981.281.692.353.26YoYgrowth(%)55.731.132.238.938.6ConsensusEPS(RMB)N.A.N.A.1.942.703.24P/E(x)N.A.22.216.111.88.5P/B(x)N.A.15.612.79.26.4Yield(%)N.A.0.81.11.52.1ROE(%)18.411.114.117.120.1Netgearing(%)NetcashNetcashNetcashNetcashNetcashSource:Companydata,Bloomberg,CMBIGMestimates