New Taisho (002968): Fast-growing institutional property service provider

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New Taisho (002968): Fast-growing institutional property service provider

Focus on institutional properties, with stable performance.

The company was established in Chongqing in 1998. It is the leading property management company in the western region. The company’s revenue in the past five years has a CAGR of 23% and 29%. The gross profit margin and net profit rate of sales are stable at 20% and 10%.About 30%, profitability is expected.

The company’s area under management and unit price have steadily increased, benefiting from rapid off-site expansion, reorganization of property re-pricing projects in reorganized institutions, and removal of low-profit items to retain high-profit items. The company is expected to re-price items close to 50% in the next two years.

The market for institutional property management is vast.

In 2018, the overall space of the property management industry was about 1 trillion yuan, of which institutional property revenue accounted for about 55%.

In the future, the industry will continue to benefit from the recovery in the completion of commercial housing (residential + non-residential), and the penetration rate of brand property management will continue to increase.

In the field of institutional real estate, due to the need for a certain technical threshold, and the current industry concentration has many alternative subdivision fields, the competitive advantage is obvious.

Relative to the pricing strategy, the allowable labor cost to maintain a reasonable level of profit, these characteristics have become the advantages of the company’s rapid expansion.

With the gradual meeting of the functional requirements of the owners, the relatively high pricing strategy is conducive to the company’s rapid expansion of customers.

Compared with the average cost per capita of the industry and other listed property management companies, the company can still maintain a reasonable level of profit compared to the average replacement pricing of the industry.

But among them, the company’s labor costs accounted for 87% of the total costs. The operating model was too heavy to rely on manpower compared 杭州桑拿 to the industry average. Cleaning and security remained in the company. Per capita income per capita was relative to the industry average.

Technology empowerment will increase per capita budget slender boots to increase profit levels.

After the listing and raising of funds, the company will increase the investment provided by technology. It is expected that technology empowerment will increase per capita management area and per capita income, so that the company’s development situation will be improved, that is, the excessive reliance on junior manpower to provide low value-added services willImproved.

Investment suggestion: The institutional property management industry has a broad market space. The company has deeply cultivated the institutional property management industry for many years. It has a rapid growth and high profit quality. It will add new technology applications and process reengineering after listing and raise funds. Technology empowerment will improve operational efficiency.

It is expected that the company’s EPS in 2019, 2020 and 2021 will be 1.

43 yuan, 1.

77 yuan, 2.

18 yuan, according to the closing price on December 10, 2019, the corresponding PE is 43 times, 35 times, 28 times, respectively, given a “prudent increase” rating.

Risk Warning: Expansion in other places is blocked, costs rise too fast, and exit rates rise too quickly