中国房地产管理：乐意为你服务.docx

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1、28 February 2019EquitiesREMDChinaAlbert Tam*AnalystThe Hongkong and Shanghai Banking Corporation Limited albert.p.h.tamhsbc .hk +852 2822 4395Michelle Kwok*Head of Real Estate Research, Asia PacificThe Hongkong and Shanghai Banking Corporation Limited michellekwokhsbc .hk+852 2996 6918Raymond Liu*,

2、CFAAnalystThe Hongkong and Shanghai Banking Corporation Limitedraymond.w.m.liuhsbc .hk+852 2996 6743Simon Sin*AssociateThe Hongkong and Shanghai Banking Corporation Limited simon.k.c.sinhsbc .hk +852 2996 6514Max Liang*AssociateThe Hongkong and Shanghai Banking Corporation Limited max.lianghsbc .hk

3、+852 2996 6629Yiqin Lu*AssociateShanghai* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/qualified pursuant to FINRA regulationsHSBC China Conference 201915-17 May, ShenzhenRegister now/卜 HSBCGlobal ResearchTHIS CONTENT MAY NOT BE DISTRIBUTED TO THE PEOPLES REPUBL

4、IC OF CHINA (THE PRC) (EXCLUDING SPECIAL ADMINISTRATIVE REGIONS OF HONG KONG AND MACAO)China Property ManagementStill very much at your serviceMarket consolidation and increasing penetration of property management (PM) value-added services to drive growth History shows that tough physical market con

5、ditions do not automatically translate into weaker growth of PM companiesDowngrade Colour Life from Buy to Hold; prefer A-Living and Greentown Service (both rated Buy)Look beyond stock price volatility. PM stocks were hit by cautious sentiment in the property market in 4Q18 and have rebounded since

6、then. We believe strong growth drivers remain for PM companies and forecast average 35% earnings growth for full-year 2019e. By contrast, we expect developers to grow 24% versus 2018e.Fundamental drivers remain intact. We see the following growth drivers for2019e: (1) market consolidation driving th

7、e market share gains of PM companies; (2) a continued upward penetration rate trend for PM services amid declining completions; (3) a solid pace of growth in value-added services (VAS), supporting expansion and profitability; (4) alleviated concerns about social insurance reform. Our sensitivity ana

8、lysis shows that a decline in new gross floor area (GFA) in a tough market would only have a modest impact on revenue and core earnings of PM companies.What has changed? We cut earnings forecasts for companies under ourcoverage by an average of 5% in both 2019e and 2020e. In particular, we lower our

9、 gross profit margin and core earnings estimates for Colour Life. We roll over our valuation to 2019e; we lower our target multiples for Colour Life, COPL and Greentown Service due to a slowdown in the physical market and for company-specific reasons; and we trim our target prices by an average of 1

10、9%. We downgrade Colour Life to Hold as we believe it will be increasingly challenging for the company to achieve quality expansion.Focus on the best players. We continue to prefer A-Living (TP: HKD15.20) and Greentown (TP: HKD9.40), both rated Buy. We believe the former has solid growth momentum an

11、d dual support from Agile (3383 HK, HKD10.26, Hold, TP HKD9.00) and Greenland Holdings (600606 CH, not rated) whereas the latter delivers high PM quality and has high growth visibility.Summary of ratings, target prices, and key metricsSource: Bloomberg, HSBC estimates (priced at close of 26 February

12、 2019)CompanyStockcode CurrencyCurrent_ priceTarget priceRating_ Old Upside/ New (downside)Market cap 3M ADTVPE(x) 2017aPE(x) 2018ePE(x) 2019eOldNew(USDbn)(USDm)A-Living3319 HKHKD12.5819.9015.20BuyBuy21%2.13.035.819.911.7COPL2669 HKHKD2.913.703.50BuyBuy20%1.22.231.924.020.6Colour Life1778 HKHKD4.839

13、.604.80BuyHold(1)%0.81.115.210.69.8Greentown Service2869 HKHKD7.299.109.40BuyBuy29%2.64.344.634.126.0This report replaces the version of the same date and title published earlier, to correct the target price for A-Living mentioned in the fourth paragraph on the front page (should be HKD 15.20).Discl

14、osures & DisclaimerIssuer of report: The Hongkong and Shanghai Banking Corporation LimitedView HSBC Global Research at:h tips :/ research, hsbc. comIssuer of report: The Hongkong and Shanghai Banking Corporation LimitedView HSBC Global Research at:h tips :/ research, hsbc. comThis report must be rea

15、d with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it.4. Concerns about rise in costs of social insurance are alleviatedIn late July, the China government announced that social insurance payments will be collected by tax aut

16、horities, effective 1 January 2019. The new rules are expected to strengthen the collection of social insurance payments and impact labour-intensive sectors, which includes PM companies (see Assessina the impact of social insurance, 10 September 2018).However, PM companies under our coverage have st

17、ated they have not noticed any change in social insurance in 2019 and expect no material change in the near term. At the same time, local media Caixin reported that the actual collection method of social insurance has not changed. It is still collected by the Ministry of Human Resources and Social S

18、ecurity.There are also signs that the government is advocating more accommodative measures on social insurance. At the Davos Forum held in Tianjin in September 2018, Premier Li Keqiang said policymakers are speeding up the lowering of VAT and income tax rates, and substantially cutting social insura

19、nce rates.Changes to our earnings estimatesWe make the following changes to the companies under our coverage:Colour LifeWe have revised down our gross margin forecast for Colour Life by 2ppt in 2018e and 4.3ppt in 2019e. We believe it has peaked and expect it to decline in 2019-20e. Accordingly, we

20、have revised down core earnings by 3% and 17% and core EPS by 3% and 18%, for the same years.Currently, Colour Life has the largest GFA under management in our coverage universe and we believe it is increasingly challenging for the company to obtain new projects with higher management fees. In fact,

21、 in 1H18, the companys gross margin was down 10.2ppt y-o-y, to 35.3%, on the impact of its acquisition of Wanxiangmei (formerly Wanda Property Management) that was completed in early 2018, although the company said part of the decline was due to the different business models of Wanxiangmei. At the s

22、ame time, it also saw lower GPM in various VAS, including community leasing, sales and other services and engineering services.Our earnings forecast are below consensus estimates by 10% in 2018e and 12% in 2019e due to our more conservative revenue and gross margin forecasts.Greentown ServiceWe have

23、 lowered our revenue forecasts by 4% in 2018e and 6% 2019e due to our more conservative estimation of GFA under management in both years. Partly offset by a slight increase to our gross margin forecast (by 0.6ppt, to 18.7%, for 2018e and by 0.3ppt, to 19.0%, for 2019e) we lower our core earnings for

24、ecasts by 3% for 2018e and 6% for 2019e. We have cut our EPS forecasts by the same magnitude for the same years.COPLWe have revised up our revenue forecast by 7% for 2018e and 9% for 2019e as we align the new GFA obtained in 2018e and 2019e based on completion guidance of 15.95m sqm from the parent

25、(COLI). We also raise the GPM forecast by 0.8ppt for 2018e and by 0.1 ppt for 2019e to 25.7% and 26.0%, respectively, as we expect a slight improvement in GPM after integrating the projects from the CITIC acquisition in 2017. Together with small adjustments in SG&A, we have lifted both core earnings

26、 and EPS estimates by 9% in 2018e and 5% in 2019e.A-LivingWe have lowered our GPM forecast for PM services by 0.2ppt in 2019e, to 32.8%, to reflect higher labour cost. We also update our contracted sales assumption for Agile, which impacts our forecast for revenue from property sales agency services

27、. Accordingly, we have brought down our core earnings and EPS estimates by 3% each for 2019e.Figure 19: Changes to our revenue forecasts (RMBm), 2018-20e2018e2019e2020eOldNewChangeImplied y-o-y growthOldNewChangeImplied y-o-y growthOldNewChangeImplied y-o-y growthA-Living3,6033,5970%104%6,6946,6810%

28、86%9,1029,1090%36%Colour Life3,2983,4454%112%3,9634,0001%16%4,6604,6981%17%COPL3,5003,7577%12%3,8094,1419%10%4,2494,5377%10%Greentown Service6,9286,666-4%30%9,2848,703-6%31%12,24811,423-7%31%Average2%64%1%36%0%24%Note: Forecasts for COPL are expressed in HKD Source: Company data, HSBC estimatesFigur

29、e 20: Changes to our core profit forecasts (RMBm), 2018-20eNote: Forecasts for COPL are expressed in HKD Source: Company data, HSBC estimates2018eOld2019e. NewChangeImplied y-o-y growthOld2020eOldNewChangeImplied y-o-y growthNewChangeImplied y-o-y growthA-Living7257240%140%1,2641,228-3%70%1,5881,543

30、-3%26%Colour Life468455-3%67%677561-17%23%844694-18%24%COPL3663999%33%4444645%16%5025356%15%Greentown Service525510-3%31%711669-6%31%942881-6%32%Average1%68%-5%35%-5%24%Changes to our core EPS forecasts (RMB), 2018-20e2018e2019e2020eNote: Forecasts for COPL are expressed in HKD Source: Company data,

31、 HSBC estimatesOldNewChangeImplied y-o-y growthOldNewChangeImplied y-o-y growthOldNewChangeImplied y-o-y growthA-Living0.540.540%140%0.950.92-3%70%1.191.16-3%26%Colour Life0.400.39-3%67%0.510.42-18%23%0.640.52-18%24%COPL0.110.129%33%0.140.145%16%0.150.166%15%Greentown Service0.190.18-3%31%0.260.24-6

32、%31%0.340.32-6%32%Average1%68%-5%35%-5%24%HSBC forecast versus consensusHSBCConsensusHSBC vs consensusSource: Bloomberg, HSBC estimates2018e2019e2018e2019e2018e2019eA-Living7241,2286981,0254%20%Colour Life455561507641-10%-12%COPL3994643964811%4%Greentown Service5106694996492%3%Average-1%2%Valuation

33、and risksWe use a PE multiple based valuation methodology for COPL, Colour Life and Greentown Service given their light-asset model, recurrent cash-generating nature and stable earnings growth ahead of our forecasts. We take into consideration the average PE multiples of both the global PM companies

34、 and the China companies themselves when assigning target PE multiples to Colour Life, COPL and Greentown Service. However, as the China PM companies generally have shorter trading histories, we use the trading multiples of global peers as the main reference. A-Living is the fastest-growing company

35、in our coverage universe with a light-asset model. We use DCF as a valuation methodology to account for its future growth trajectory and use PE multiples as a cross-check.Figure 21: Forward PE trend50Feb-19Greentown: 26x CG Service: 26x COPL:21xA-Living: 12xColour Life: 10xDeo18Greentown: 27xCG Serv

36、ice: 24xCOPL: 22xA-Living: 17xColour Life: 9xApr45Colour Life: 38x4540353025Dec6Greentown: 15xCOPL: 13xColour Life: 13x18 WON8A9S8L,一n8工受8e ZON二，da-二,=-二拿nW-匚专9 WON，9x9$9v-n 91.拿，97ew 9L,ue巴SON归翕lovmInL 拿巴宣,%ONWO.8SColour Life forward PE (x) CG Service PE (x).-2SDCOPL forward PE (x)-1 SD+2SDA-Living

37、 forward PE (x) MeanGreentown Service forward PE (x) +1 SDNote: The above PE band of -2SD to +2SD represents the band of Global PM peers including CBRE, Colliers, CoStar, FirstService, JLL and Savills. It is estimated and updated based on historical data from 2007 to present and excluded outlinersSo

38、urce: Company data, Refinitiv Datastream, Bloomberg, HSBCFigure 24: Sector forward PE trend40 iSep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18Sector weighted average PE (x)Sector simple average PE (x) 1 SDMean+1 SD-2 SD+2 S

39、DNote: The above PE band of -2SD to +2SD represents the band of Global PM peers including CBRE, Colliers, CoStar, FirstService, JLL and Savills. It is estimated and updated based on historical data from 2007 to present and excluded outlinersSource: Company data, Refinitiv Datastream, Bloomberg, HSBC

40、Currently, the sector is trading at 21x weighted average 2019e PE (19x simple average). The forward PE of 2019e is below the longer-term historical mean PE of international peers of 23x. That hasnt always been the case. In fact, in the first three quarters in 2018 the market was more confident about

41、 the growth outlook of PM companies and pushed their multiples above the historical mean for international peers for a few times.After the macro environment turned more uncertain amid trade tensions and caution among investors in the property market, PM stocks, following the boarder market trend, st

42、arted to retreat in 4Q18. Current weighted average market multiples remain at an undemanding level of21x 2019e PE in 2019 (19x in simple average). Market leader Greentown Service (26x) is currently trading at above the mean level valuation. COPL (21 x) and A-Living (12x) are trading at below histori

43、cal mean level of international peers. In our view, A-Livings forecast high growth in 2019e onwards is not yet fully priced in by the market, which is due partly to its short listing history. Hence, it is trading at a relatively lower multiple than its peers.Adjustments to our target PE multiples; c

44、hange in rating for Colour LifeWe have widened the target multiples of Colour Life, COPL and Greentown Service by 0.5 SD. See below for detailed company-specific reasons for changes in multiples.The relative ranking of target multiples remains unchanged after the adjustment, Greentown Service comman

45、ds the highest target multiple, followed by COPL and Colour Life.Greentown Service. As mentioned in the earnings estimate change section, we have revised down our revenue and earnings forecast due to a more conservative estimate of GFA under management. Accordingly, we have cut our estimated ROE fro

46、m 27.7% and 29.6% in 2019e and 2020e, to 26.4% and 28.4%, respectively. We have lowered our earnings growth pace forecast from 35% in 2019e and 33% in 2020e to 31% and 32%, respectively. With a lower ROE and core earnings growth, we have revised down the target multiple from +1.5 SD above mean to +1 SD above mean (from 35x to 30x).Our existing target multiple remains at a premium to mean due to the companys consistent earnings history, leading PM quality and its rel