J.P. 摩根-中国-房地产行业-中国物业管理行业分析：积极观点-2019.10.23-95页.pdf

Asia Pacific Equity Research23 October 2019China Property ManagementNavigating the blue ocean;initiate with a positive viewChina,Hong KongChina/Hong Kong PropertyKarl Chan AC(852)2800-Bloomberg JPMA KCHAN Ryan Li,CFA AC(852)2800-Bloomberg JPMA RLI Cusson Leung,CFA(852)2800-Jevon Jim(852)2800-Avery Chan(852)2800-J.P.Morgan Securities(Asia Pacific)LimitedSee page 90 for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.We initiate coverage of the China property management sector with a positive view,placing it at an early stage of structural expansion(market size surpassingRmb1 trillion in 2021E and Rmb2 trillion in 2030E,or a 9%CAGR).Consolidation of big players will likely continue(Top 100 market share to jump from 27%in 2018 to 59%in 2030E),driving a 31%18-22E earnings CAGR for covered names.In our target scenario,the 2-year implied return would be 107%,driven by rerating and earnings growth.Our top pick is A-Living(3319 HK).We also like Country Garden Services(6098 HK)and Colour Life(1778 HK).A well-deserved premium:The sector is trading at a 24x 20E P/E(developers:6x P/E).We consider the premium justified because:(1)it is a structurally growing sector,tapping domestic consumption based on an expanding housing stock;(2)it is asset-light with positive operating cash flows from recurring income;(3)we see ample potential upside as the market is not mature yet;top 100 market share to rise from 27%in 2018 to 59%in 2030E;(4)we see huge growth potential from value-added services(VAS),which currently represent only 11%of total addressable market;(5)it is defensive due to low policy risk,stickier customer base and lower macro sensitivity.We project a 9%18-30E CAGR in industry revenue,driving a 14%earnings CAGR among top 100 players.Sector market cap should jump from US$22 bn to US$200 bn by 30E.What drives share prices?Growth expectation is the biggest share price driver,as seen by the high correlation between consensus earnings upgrades and share price(R-square:86%).Thus,an increase in contracted GFA,M&A(if net cash),VAS profitability,etc.,could all drive up market growth expectations(seeTable7).We also observe that when developers financing gets tighter,property management names multiples outperform those of developers as investors seek defensiveness.How to value?We think SOTP is the best approach.(1)For property management(57%of EBIT),we benchmark investment properties given recurring income(14-26x target P/E).(2)For community VAS(26%of EBIT),we reference B2C platform businesses(14-19x 3-year forward P/E).(3)For non-community VAS(17%of EBIT),we use a cyclical business P/E(8-15x).Our target P/Es are derived based on a multi-criteria scorecard(see Table 4).Should we still chase given the outperformance?The sector has surged 100%YTD(HSCEI:+4%),and is trading at 1 s.d.above mean.We believe the strong growth in GFA is priced in,but the market is not yet fully convinced by the sustainable growth of community VAS(EBIT psm to grow from Rmb1.66 in 1H19 to Rmb2.74 in 2021E)and third-party GFA,and thus rerating will still continue.In our target scenario,the 2-year potential return of covered names would be 107%.Even if companies only trade at current P/Es(no rerating),the 2-year return would still be 56%,driven solely by earnings growth(Table 1).Prefer names with visible growth&good track record:We like A-Living(organic growth ability not yet priced in),Country Garden Services(strongestgrowth but capability in community VAS is not yet priced in)and Colour Life(attractive valuation).We are Neutral on Greentown Service(mediocre track record in growth)and COPH(slow growth appetite).Property management industry revenue Source:CPMA,J.P.Morgan estimates.Top 100 players market share gainsSource:China Index Academy,J.P.Morgan estimates.Consensus change vs.share priceSource:Bloomberg,J.P.Morgan.4835576017048241,0192,03020152016201720182019E2020E2021E2022E2023E2024E2025E2026E2027E2028E2029E2030ERmb bn20%23%26%27%29%32%34%37%40%43%46%49%52%54%57%59%20152016201720182019E2020E2021E2022E2023E2024E2025E2026E2027E2028E2029E2030EColor LifeCGSGTSA-LivingCOPH-100%-50%0%50%100%150%200%0%100%200%Share price change since June 2018Consensus changeR-square:86%2Asia Pacific Equity Research23 October 2019Karl Chan(852)2800-Equity Ratings and Price TargetsMkt CapPriceRatingPrice TargetCompanyTicker($mn)CCYPriceCurPrevCurEnd DatePrev End DateCountry Garden Services6098 HK8,456HKD24.85OW31.00Dec-20A-Living Services3319 HK3,740HKD22.00OW31.00Dec-20Greentown Service2869 HK2,908HKD8.21N8.80Dec-20China Overseas Property Holdings2669 HK1,886HKD4.50N4.60Dec-20Colour Life Services1778 HK726HKD4.00OW8.00Dec-20Source:Company data,Bloomberg,J.P.Morgan estimates.n/c=no change.All prices as of 22 Oct 19.Table 1:Scenario analysis implied valuation in Dec-20&Dec-21 based on different 1-year forward P/E ratiosSource:Company data,Bloomberg,J.P.Morgan estimates.Table 2:China property management sector valuation summarySource:Company data,Bloomberg,J.P.Morgan estimates.Note:NC refers to companies not under JPM coverage;estimates of which are Bloomberg consensus numbers.PriceCompanyTickerHK$21E22EDec-20Dec-2121E22EDec-20Dec-2121E22EDec-20Dec-21Country Garden Services6098 HK24.939x42.9 55.8 73%124%31x34.4 44.7 38%80%17x18.7 24.2 -25%-2%A-Living Service3319 HK22.020 x39.4 46.4 79%111%14x28.0 32.9 27%50%9x18.3 21.5 -17%-2%Greentown Service2869 HK8.229x11.6 14.9 41%82%27x10.8 13.9 32%70%16x6.6 8.5 -20%3%China Overseas Prop Hdgs2669 HK4.524x5.9 6.9 32%53%23x5.8 6.7 29%49%11x2.8 3.3 -37%-27%Colour Life1778 HK4.015x9.3 10.5 133%164%7x4.7 5.3 16%32%7x4.7 5.3 16%32%Average25x72%107%21x29%56%12x-17%1%Historical Trough P/EBullish ScenarioStatus-quo ScenarioBearish ScenarioImplied valuation(HK$)Implied potential returnImplied valuation(HK$)Implied potential returnImplied valuation(HK$)Implied potential returnTarget P/ECurrent P/EJPMLastMarket18-21EAvgYTD SouthboundStockJPMPriceCloseCapFY19E FY20EFY19EFY20E FY19EFY20EFY19E FY20EEPS TurnoverPriceas%ofCompanyCode Rating CCYTarget22-Oct-19US$mn(x)(x)(%)(%)(x)(x)(x)(x)CAGRUS$mnPerf.Free FloatCountry Garden Services6098.HKOWHKD31.0024.858,457 40.0 31.0 0.6%0.8%11.3 8.7 7.9 5.6 42%18.3101%7%A-Living3319.HKOWHKD31.0022.003,740 22.2 14.4 2.0%3.1%4.1 3.4 5.0 2.9 44%12.7113%NAGreentown Service2869.HKNHKD8.808.212,910 37.1 27.1 0.9%1.3%7.6 6.3 2.4 1.9 38%4.739%21%China Overseas Ppty Holdings2669.HKNHKD4.604.501,886 28.7 23.4 1.0%1.3%9.9 7.6 3.3 2.7 23%4.899%15%Colour Life1778.HKOWHKD8.004.00726 8.8 7.3 4.3%5.5%1.3 1.2 1.2 1.1 18%2.1-1%20%Ever Sunshine1995.HKNCHKD-4.40862 30.6 18.7 1.1%1.6%5.6 4.6 3.4 2.3 40%1.2149%NAS-Enjoy Service1755.HKNCHKD-9.12951 23.5 16.5 NANANANANANA-3.4141%NAAoyuan Healthy Life3662.HKNCHKD-5.68526 22.0 13.8 1.7%2.8%4.4 3.6 4.2 2.7 35%2.758%NAKaisa Prosperity2168.HKNCHKD-16.50295 14.1 10.9 1.8%2.3%3.6 2.8 1.7 1.3 47%0.5126%NAZhong Ao Home1538.HKNCHKD-0.7073 4.9 4.5 4.3%4.3%0.7 0.6 0.4 0.4 -0.112%NAProperty Management32.0 23.8 1.1%1.6%7.9 6.2 5.1 3.6 37%11.493%8%P/EDiv YieldP/BP/S3Asia Pacific Equity Research23 October 2019Karl Chan(852)2800-Figure 1:China Property Management Sector P/E vs.China Developers Sector P/EConsistently trading at a premium,China property management sector multiple tends to outperform when developers financing is tight as market seeks defensiveness.Source:Bloomberg,HKEx,J.P.MorganFigure 2:China Property Management Share Price Index vs.covered companies aggregate rolling 1-year forward consensus net profitGrowth expectation is a key share price driver,and thus property management companies share prices have been closely tracking consensus earnings estimates.Source:Bloomberg,J.P.MorganFigure 3:China Property Management Sector P/E vs.major developers 12-month rolling contracted sales Y/Y growthGFA under management is a result of developers contracted sales,and therefore when sales growth trends up,the growth expectation on property management companies also picks up.Source:Bloomberg,Company data,HKEx,J.P.MorganFigure 4:New contribution as%of revenue-bearing GFA,vs.gross margin of property management segment(excluding VAS)We believe gross margin of property management(excluding VAS)will only see a slight decline till 22E as the%of newly acquired GFA,which usually fetches higher margin,will remain largely stable.Source:Company data,J.P.Morgan estimates.Note:for our 5 covered companies only.Figure 5:Net margin vs.EBIT compositeWe expect net margin will remain stable in the coming 3-4 years,as contribution from community VAS,which fetches higher margin,will pick up to offset the slight decline in the margin of prop.mgt.Source:Company data,J.P.Morgan estimates.Note:for our 5 covered companies only.Figure 6:Core net profit Y/Y growth comparisonWe forecast our covered companies will see a 31%earnings CAGR in 18-22E.CGS will see the strongest CAGR of 41%,followed by A-Living(38%).COPH&Colour Lifes will be relatively weak at 20-22%Source:J.P.Morgan estimates.4681012141610152025303540455055Jun 14Aug 14Oct 14Dec 14Feb 15Apr 15Jun 15Aug 15Oct 15Dec 15Feb 16Apr 16Jun 16Aug 16Oct 16Dec 16Feb 17Apr 17Jun 17Aug 17Oct 17Dec 17Feb 18Apr 18Jun 18Aug 18Oct 18Dec 18Feb 19Apr 19Jun 19Aug 19Oct 19China Property Management Sector P/EChina Property Development Sector P/EChina Prop Mgt Sector P/E(x)China Property Dev.Sector P/E(x)250300350400450500550600650700750Jun-18Jul-18Aug-18Sep-18Sep-18Oct-18Nov-18Nov-18Dec-18Jan-19Jan-19Feb-19Mar-19Mar-19Apr-19May-19Jun-19Jun-19Jul-19Aug-19Aug-19Sep-19 3,100 3,600 4,100 4,600 5,100 5,600Consensus net profitShare price(HK$)China Prop Mgt IndexConsensus net profit of covered companies(Rmb mn)-40%-20%0%20%40%60%80%100%1015202530Apr 17Jun 17Aug 17Oct 17Dec 17Feb 18Apr 18Jun 18Aug 18Oct 18Dec 18Feb 19Apr 19Jun 19Aug 19Oct 19China Property Management Sector P/EMajor developers 12-month rolling contracted sales Y/Y growthChina Prop Mgt Sector P/E(x)12-month rolling contracted sales Y/Y18%20%16%17%16%18%17%17%24%25%25%23%23%22%22%21%0%5%10%15%20%25%0%5%10%15%20%25%20152016201720182019E2020E2021E2022ENew contribution as%of revenue-bearing GFAGross margin(Prop mgt only)%of GFA under mgtGross margin11%12%13%14%15%14%15%15%57%63%59%57%55%55%51%47%23%22%27%26%28%29%33%36%5%7%9%11%13%15%17%19%21%23%0%10%20%30%40%50%60%70%20152016201720182019E2020E2021E2022EAdj net marginProp Mgt as%of EBITCommunity VAS as%of EBITNet margin%of EBIT70%30%38%30%54%56%27%18%47%37%32%29%32%25%16%16%29%25%16%13%19E20E21E22ECGSA-LivingGreentown ServiceCOPHColor Life4Asia Pacific Equity Research23 October 2019Karl Chan(852)2800-Peers comparisonFigure 7:Contracted GFA(total basis)-mn sqmSource:Company data,HKEx,J.P.MorganNote:A-Livings includes acquisition of CMIGFigure 8:Reserve GFA as%of Revenue-bearing GFASource:Company data,HKEx,J.P.Morgan.Note:A-Livings includes CMIG acquisition.Figure 9:%of GFA by backing developerSource:Company data,HKEx,J.P.Morgan.Note:A-Livings includes CMIG acquisition.Figure 10:Residential as%of GFASource:Company data,HKEx,J.P.Morgan.Note:A-Livings includes CMIG acquisition.Figure 11:Margin comparison(FY18)Source:Company data,HKEx,J.P.MorganFigure 12:Segment breakdown(by gross profit,FY18)Source:Company data,HKEx,J.P.Morgan615 584 564 391 371 133 86 79 71 45 41 27 26 24 23 8 A-LivingCGSColour LifeGreentown ServicePoly Prop DevS-Enjoy ServiceEver SunshineLanguang JustbonZhong Ao HomeTimes NeighborhoodKaisa ProsperityYincheng Life ServiceAoyuan Healthy LifePowerlong CommBinjiang ServiceHevol Services67%63%53%51%47%44%43%35%31%26%23%23%20%18%17%12%33%37%47%49%53%56%57%65%69%74%77%77%80%82%83%88%S-Enjoy ServiceCGSGreentown ServiceAoyuan Healthy LifePoly Prop DevBinjiang ServiceEver SunshineColour LifePowerlong CommYincheng Life ServiceHevol ServicesTimes NeighborhoodLanguang JustbonA-LivingZhong Ao HomeKaisa ProsperityReserve GFARevenue-bearing GFA93%92%92%88%80%73%70%69%66%59%56%44%43%40%21%21%1%0%0%Hevol ServicesAoyuan Healthy LifeCOPHPowerlong CommCGSS-Enjoy ServiceBinjiang ServiceCliffford Modern LivingKaisa ProsperityEver SunshinePoly Prop DevTimes NeighborhoodLanguang JustbonA-LivingYincheng LifeGreentown ServiceColour LifeRiverine ChinaZhong Ao HomeAverage:53%95%95%94%94%90%89%87%87%82%79%78%69%63%61%61%44%37%26%CGSHevol ServicesCOPHLanguang JustbonColour LifeZhong Ao HomeKaisa ProsperityBinjiang ServiceYincheng Life ServiceS-Enjoy ServiceGreentown ServiceCliffford Modern LivingEver SunshinePoly Prop DevPowerlong CommA-LivingTimes NeighborhoodRiverine ChinaAverage:74%24%21%20%20%19%14%13%13%13%12%11%10%9%9%9%8%8%7%6%6%6%38%49%33%38%34%26%35%29%34%29%27%21%28%29%27%20%36%18%17%31%15%A-LivingCliffordLanguang JustbonCGSXinyuanBinjiangColour LifeS-EnjoyAoyuan HealthyAveragePowerlong CommCOPHZhong AoEver SunshineTimes NeighborhoodPoly Prop DevHevol ServicesGreentown ServiceRiverine ChinaKaisa ProsperityYincheng LifeNet MarginGross Margin92%81%73%66%62%62%60%60%54%52%51%48%45%45%42%42%37%34%23%3%15%20%8%16%30%37%12%24%24%17%35%11%15%28%58%14%11%77%5%5%7%26%22%7%3%28%23%25%32%16%45%41%30%0%50%54%0%Zhong Ao HomePowerlong Comm MgtCOPHAoyuan Healthy LifeCGSColour LifeHevol ServicesS-Enjoy ServiceAverageLanguang JustbonTimes NeighborhoodPoly Prop DevKaisa ProsperityEver SunshineGreentown ServiceYincheng Life ServiceBinjiang ServiceA-LivingCliffford Modern LivingProperty managementCommunity VASNon-community VAS5Asia Pacific Equity Research23 October 2019Karl Chan(852)2800-Executive summaryA Rmb2 trillion market in 2030EThe China property management sector saw an industry revenue of Rmb704 bn inFY18(86%from property management and 14%from VAS,by our estimate),and we expect the total market size will surpass Rmb1 trillion in 2021E and Rmb2 trillion in 2030E.This represents a 9%18-30E CAGR,driven by a 5%CAGR in revenue-bearing GFA,which is the proxy of our estimated 5%CAGR in total housing stock(assuming an average 3%annual decline in sales volume till 2030E).Market consolidation to continueWe estimate the top 100 companies market share(by absolute number)was 27%inFY18.Their growth will outpace the industry and we forecast market share to reach59%in FY30E.We expect more consolidation,mainly due to(1)tailwinds from major developers consolidation;(2)more M&A;(3)the rise of value-added services(VAS)crowding out smaller players;and(4)economies of scale.If we compare the top 3 players market share with other sectors,property managements is only 5%,which is way below that of most other sectors,including developers(15%).A sector with US$200 bn market cap is in the makingCurrently the market cap of the HK-listed China property management sector is US$22 bn with 16 companies.We forecast that,by 2030,there could be 100 property management companies(PMCs)listed in Hong Kong