AVIC Sunda (000043) Important Matters Comment： High-quality track of central enterprises in the growth industry
AVIC Sunda (000043) Important Matters Comment: High-quality track of central enterprises in the growth industry
With the support of a policy and policy, the company has not made many breakthroughs and has determined profitability in non-residential property management segments. The company has the advantages of brand and historical experience, but also has strong shareholder background support. It is expected to grow into a leading quality leader.
The issuance of shares for the acquisition of China Merchants Property was passed unconditionally and the leading enterprise property management leader set sail.
The company’s plan to issue shares to purchase assets was approved by the CSRC. After the transaction is completed, China Merchants Property will soon become an important part of the company, and the company’s business scale will leap into the forefront of the industry.
We also believe that China Merchants Group, the actual controller of the company in the future, intends to support the property management business with scale.
High-quality tracks in growth industries, key opportunities for technology breakthroughs and brand consolidation.
The property management industry is the finest molecular industry with the strongest policy support in the real estate industry chain and the lowest concentration of existing markets (the leading market share is generally around 1%).
Close to the residential sector, the profit of the non-residential sector is more determined (generally adopting a cost-plus approach), and segmented (only public companies in the public sector have historical advantages in individual state-owned enterprises, while some brands in the office sector and a few companies such as Vanke have advantages).
With the advent of the 5G era, science and technology have promoted the intelligent connection of all things, and the per capita management area of property management companies has continued to increase, promoting the improvement of the industry’s profitability and the continued economies of scale.
As leading companies in this field have entered the capital market one after another, the vassal attributes of the scale cost centers of major leading companies have moved towards independent operation, and the positive competition between high-quality brands has just begun.
We believe that the company is not the only large-scale leading property management company listed on the stock market, but also one of the few branded property management companies in the country with a good business record and stable management team in the non-residential sector.
The advantages of landmark property management promote the rapid accumulation of public construction orders.
AVIC Property and China Merchants Property both have influential non-residential management brands.
We expect that relying on the management records of landmark properties and the background of shareholders, the company will have significant business advantages in developing government agencies, libraries, art galleries, universities, hospitals, and stadiums.
In the first half of 2019, the expanded area of AVIC properties (excluding investment properties) achieved rapid growth, reaching 76.43 million square meters.
Risk factors: Although the company’s expansion area is fast, the revenue of some public construction areas and the profitability are weak.
The core reason for giving higher target estimates.
We have given the company a higher level of reasonable estimates without adjusting the profit forecast. The main reasons are as follows: 1. The company issued shares to acquire assets has been basically determined, and development uncertainty has been eliminated. 2. We are conservative in the company’s profit forecast.In 2020/2021, it is only assumed that the company’s third-party expansion area is at least 25 million square meters.
With the potential of the company’s endogenous growth, this expectation is fully capable of realizing-and after all, the company’s book has more than 1.2 billion currency funds, which is converted into nearly 7 billion investment real estate. If the brand M & A opportunity company can grasp, the scale will increaseThe speed should not stop there.
3. After we released the in-depth report in August (Aviation Sunda (000043) Investment Value Analysis Report-scale growth has entered the fast track, and profit margin improvement is now underway) (2019-8-25), the property sector is the company’s comparableBusinesses are also estimated to have undergone 合肥夜网 a restructuring, and the capital market has become increasingly aware of the value of the property management industry.
4. As a company with a low gross profit margin, a brand enterprise with strong shareholder support should indeed enjoy higher returns.
As the approval is not equal to the completion of the acquisition of China Merchants Property immediately, we still assume that the company will realize the consolidation of China Merchants Property on January 1, 2020.
We maintain the company’s net profit forecast for the main property management industry for 2019/2020/2021 to be 2.
40,000 yuan (2019 performance does not include investment properties, including property revaluation and appreciation and asset disposal).
Due to the complete format, we still list the total EPS as follows (expected 2019/2020/2021 EPS is 0.
17 yuan / share).
However, whether to realize the asset disposal or revaluation premium can not make any difference in our evaluation of the company’s value.
We give the company property management business27.
5 times PE and 2.
1 times the PS, taking the average (using the current PE and PS estimates of the quality residential property company Greentown Services).
No listed non-residential property leader is comparable, the company’s gross profit margin is closer to Greentown’s service, and its brand influence is also leading), plus the company’s realizable real estate assets instead of interest-bearing value.
500 million, think that the company’s reasonable urban valuation after the additional issue of 253.
7 megabytes, divided by the additional share capital after the issue, gives the current target price of 23.
92 yuan / share (the original target price was 20.28 yuan / share).
The company currently leads by 18.
78 yuan / share, we maintain the company’s “buy” investment rating.