Core Viewpoint - The property management industry is experiencing a slowdown in growth, leading companies to focus on service quality and stable cash flow rather than aggressive expansion [1][11]. Financial Performance - In 2024, the company reported a revenue of 14.024 billion yuan, a year-on-year increase of 7.5%, with a gross profit of 2.326 billion yuan, up 12.4% [2][4]. - The net profit attributable to ordinary shareholders was 1.511 billion yuan, reflecting a 12.5% increase [2][4]. - The gross margin improved to 16.6%, up from 15.9% the previous year [4][11]. Revenue Structure - Property management services remain the primary revenue source, contributing 10.67 billion yuan, a 13.3% increase year-on-year, accounting for 76.1% of total revenue [2][4]. - Revenue from parking space sales decreased by 27.9% to 14 million yuan, while resident value-added services grew by 7.2% to 1.38 billion yuan [2][4]. Operational Metrics - The managed area increased by 7.4% to 431 million square meters, with contributions from China State Construction and China Overseas Group at 60.6% and independent third parties at 39.4% [4][6]. - The company faced challenges in achieving its strategic goal of a 1:1 ratio of internal growth to external expansion, as it did not meet this target in 2024 [4][11]. Workforce and Cost Management - The workforce decreased by 10.19%, with a reduction of 4,385 employees, leading to a drop in employee costs from 5.424 billion yuan in 2022 to 4.512 billion yuan in 2024 [11][8]. - The company is undergoing a subcontracting reform, which raises concerns about service quality and supply chain management [11]. Market Expansion and Strategy - The company is focusing on urban services, with 1.02 million square meters of managed area coming from public and other property projects, representing a 23.7% increase [12][14]. - A new urban operations department has been established to enhance market competitiveness in urban services [12][14]. Challenges in Public Construction Market - The public construction property market is under pressure, with government procurement amounts declining and payment terms extending, which may affect cash flow and project expansion [14].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company shows steady revenue growth and is actively expanding its non-residential business segments [5] - In 2024, the company achieved a revenue of 14.02 billion HKD, representing a year-on-year growth of 7.5% [5] - The gross profit for the same period was 2.33 billion HKD, with a growth of 12.4%, attributed to the increase in managed property area and enhanced value-added services [5] - The net profit attributable to the parent company increased by 12.5% to 1.51 billion HKD [5] - The company is expanding its management scale, with a total of 2,232 managed properties across 167 cities, and a managed area increase of 7.4% to 430 million square meters [5] Revenue and Profit Forecast - The forecast for 2025-2027 indicates a compound annual growth rate (CAGR) of 10.6% for net profit attributable to the parent company [5] - Revenue projections for 2025, 2026, and 2027 are 15.28 billion HKD, 16.50 billion HKD, and 17.90 billion HKD respectively, with growth rates of 9%, 8%, and 8% [2][7] - The earnings per share (EPS) are expected to rise from 0.46 HKD in 2024 to 0.62 HKD in 2027 [2][7] Business Segments Performance - Property management services revenue grew by 13.3% to 10.67 billion HKD, accounting for 72.1% of total revenue [5] - The gross margin for property management services improved to 16.0% [5] - Value-added services revenue decreased by 6.5% to 3.21 billion HKD, with non-residential value-added services declining by 14.7% [5] - The sales of parking spaces dropped by 27.9% to 140 million HKD, with a total of 2,224 spaces sold [5] Financial Metrics - The company’s return on equity (ROE) is projected to decline from 29.57% in 2024 to 23.27% in 2027 [2][10] - The price-to-earnings (P/E) ratio is expected to decrease from 10.39 in 2024 to 8.20 in 2027 [2][10] - The gross margin is anticipated to improve from 16.6% in 2024 to 17.1% in 2027 [2][7]

Investment Rating - The report maintains a "Buy" rating for the company [7] Core Views - The company achieved a revenue of 14.02 billion RMB in 2024, a year-on-year increase of 7%, and a net profit attributable to shareholders of 1.51 billion RMB, up 13% year-on-year, slightly below expectations [1][2] - The company is focusing on high-quality development by exiting low-efficiency projects, which has improved profitability despite a slowdown in revenue growth [2] - The company’s community value-added services revenue grew by 7% to 1.38 billion RMB, with a gross margin of 25.5%, indicating resilience in this segment [4] Summary by Sections Revenue and Profitability - The basic property management revenue increased by 13% to 10.67 billion RMB, driven by a 7% increase in managed area to 430 million square meters [2] - The company exited 44.5 million square meters of managed area to optimize its business structure, which positively impacted profitability [2] - The gross margins for basic property management and overall improved by 1.3 and 0.7 percentage points to 14.0% and 16.6%, respectively [2] Market Expansion - The company’s market expansion focused on quality, with new contracts decreasing by 40% to 6.571 million square meters, but high-value projects in core urban areas increased significantly [3] - The active land acquisition by the China State Construction Engineering Corporation is expected to enhance the company’s future managed area growth resilience [3] Community Value-Added Services - The community value-added services segment saw a revenue increase of 31% in brokerage services to 260 million RMB, contributing to overall growth despite a slight decline in gross margin [4] - The company responded to market expectations for increased dividends, raising the payout ratio by 4 percentage points to 36%, resulting in a dividend yield of 3.3% based on the closing price [4] Earnings Forecast and Valuation - The earnings per share (EPS) for 2025 and 2026 are projected at 0.51 and 0.58 RMB, respectively, with a target price of 7.74 HKD based on a 25 PE ratio [5][8] - The report anticipates continued steady improvement in profitability for 2025 [2][5]

Investment Rating - The report maintains a "Recommended" investment rating for the company, with a current stock price of HKD 5.47 [1][4]. Core Insights - The company achieved a revenue of HKD 14.02 billion in 2024, representing a year-on-year growth of 7.5%. The profit attributable to ordinary shareholders was HKD 1.51 billion, up 12.5% year-on-year. The total proposed dividend for the year is HKD 0.18 per share [4][6]. - The company continues to expand its operational scale, with a managed area of 430 million square meters, a 7.4% increase year-on-year. The new signed contracts amounted to HKD 4.44 billion, with 63.3% of the new managed area coming from independent third parties [6][8]. - The report highlights an improvement in gross margin, which increased to 16.6%, up 0.7 percentage points year-on-year, primarily due to enhanced profitability in property management services [6][10]. Financial Summary - **Revenue and Profit Forecasts**: - 2024 Revenue: HKD 14.02 billion, 2025: HKD 15.16 billion, 2026: HKD 16.32 billion, 2027: HKD 17.48 billion [5][8]. - 2024 Net Profit: HKD 1.51 billion, 2025: HKD 1.68 billion, 2026: HKD 1.84 billion, 2027: HKD 2.01 billion [5][8]. - **Profitability Ratios**: - Gross Margin: 16.6% in 2024, expected to reach 17.0% by 2027 [10]. - Net Margin: 10.8% in 2024, projected to increase to 11.6% by 2027 [10]. - **Valuation Metrics**: - Price-to-Earnings (P/E) ratio: 11.0 in 2024, decreasing to 8.3 by 2027 [10]. - Price-to-Book (P/B) ratio: 3.2 in 2024, expected to decline to 1.7 by 2027 [10].

Financial Performance - Overall revenue rose by 7.5% to RMB 14,023.8 million, compared to RMB 13,051.3 million last year[4] - Gross profit increased by 12.4% to RMB 2,325.5 million, with an improved gross profit margin of 16.6%[4] - Profit attributable to ordinary shareholders rose by 12.5% to RMB 1,510.9 million, with basic and diluted earnings per share of RMB 0.4600[4] - The average return on equity for the year was 32.7%, down from 36.8% the previous year[4] - Operating profit increased by 11.6% to RMB 2,012.4 million, compared to RMB 1,803.4 million in 2023, despite a rise in selling and administrative expenses by 11.5%[33] - Net income attributable to ordinary shareholders rose by 12.5% to RMB 1,510.9 million, up from RMB 1,342.5 million in 2023[35] - Revenue for the year ended December 31, 2024, was RMB 14,023,767 thousand, representing a 7.4% increase from RMB 13,051,250 thousand in 2023[69] - The company's total equity rose to RMB 5,174,008 thousand in 2024, up from RMB 4,177,017 thousand in 2023, representing a 23.9% increase[72] Contract and Project Management - The total managed construction area increased by 7.4% to 431.1 million square meters, with new orders of 74.1 million square meters and a reduction of 44.5 million square meters for optimization[3] - The new contract value for the year was approximately RMB 4,441.2 million, with RMB 2,848.7 million from independent third parties[4] - The breakdown of new managed area by project source shows 36.7% from China State Construction and China Overseas Group and 63.3% from independent third parties, totaling 74.1 million square meters[28] - The new managed area for residential projects accounted for 49.7% and for non-residential projects accounted for 50.3%, with respective contract values of RMB 2,342.7 million and RMB 2,098.5 million[28] Strategic Focus and Development - The company aims to focus on high-quality development and service modernization as part of its strategic planning for the "14th Five-Year Plan" period[6] - The company is committed to becoming a comprehensive service operator for urban spaces, focusing on community governance and collaboration with stakeholders[9] - The company has developed a service system that spans the entire life cycle of real estate development, enhancing its supply chain integration capabilities[15] - The company is focusing on modernizing property management services through technology innovation and cross-industry collaboration, aiming for a comprehensive upgrade of service systems and brand establishment[26] Sustainability and Innovation - The company aims to achieve a "dual carbon" goal and has published a white paper on carbon neutrality, emphasizing its commitment to sustainable development[17] - The group is committed to sustainable development, offering comprehensive engineering value-added services, including maintenance, smart fire safety, and new energy charging operations, while innovating proprietary products like smart charging sockets and energy-saving lights[21] - The group aims to reduce carbon emissions per unit area by 15% by 2030 as part of its carbon neutrality commitment[64] - The company has implemented innovative technologies, such as smart cleaning robots, to enhance service quality and efficiency in property management[14] Employee and Operational Efficiency - The group employed approximately 38,627 employees as of December 31, 2024, down from 43,012 employees a year earlier[68] - Total employee costs for the year were approximately RMB 4,511.7 million, a decrease from RMB 4,923.9 million in the previous year[68] - The group has implemented automation measures such as on-site quality monitoring systems and remote video monitoring systems to enhance operational efficiency[59] - The company is implementing a "partner system" management model to enhance team capabilities and operational efficiency, promoting a culture of innovation and professional development[24] Market Expansion and Client Resources - The company continues to enrich its property management offerings by expanding into various sectors, including logistics parks and healthcare facilities[13][15] - The company has actively expanded its client resources across various sectors, including commercial complexes, offices, and public facilities[38] - The company plans to continue expanding its property management services and explore new market opportunities in the coming year[73] - The company is expanding its market presence in high-value regions, focusing on smart city construction, digitalization, and green initiatives to strengthen its core competitiveness[20] Recognition and Awards - The company has been recognized as the leading property management service provider in Hong Kong, holding the largest market share in the region[14] - The company has been awarded multiple accolades, including being named the "No.1 Property Service Brand Influence Enterprise in China" for seven consecutive years[16] - The group has received recognition as a "China Quality Life Operation Brand Enterprise" in 2024, reflecting its commitment to high-quality community service[22] - The company has been recognized for its strong performance in environmental, social, and governance (ESG) practices, receiving several awards in 2024[17] Financial Position and Assets - Cash and bank balances increased by 13.1% to RMB 5,803.5 million in 2024, compared to RMB 5,130.7 million in 2023[55] - The net value of current assets increased to RMB 4,476.4 million in 2024 from RMB 3,565.6 million in 2023[55] - Total assets as of December 31, 2024, amounted to RMB 11,455,820 thousand, up from RMB 10,610,823 thousand in 2023, indicating a growth of 7.9%[71] - The total trade receivables as of December 31, 2024, amounted to RMB 2,827,771,000, an increase from RMB 2,620,531,000 in 2023, representing a growth of about 7.9%[99] Corporate Governance and Compliance - The audit committee, consisting of independent non-executive directors, reviewed the annual performance and consolidated accounts for the year ended December 31, 2024[113] - The company adhered to the corporate governance code as per the Hong Kong Stock Exchange's listing rules throughout the year ended December 31, 2024[115] - The company confirmed compliance with the standard code for securities trading by all directors for the year ended December 31, 2024[116] - The group adopted revised Hong Kong Financial Reporting Standards this year, which did not have a significant impact on its financial position and performance[79]

2024 年 9 月 27 日 公司研究 业绩增长稳健，毛利率与分红比例提升 ——中海物业（2669.HK）跟踪报告 要点 事件：中海物业近期涨幅明显， 2024H1 归母净利润同比+16%。 1、9 月 19 日，美联储宣布降息 50bp，将联邦基金利率下调至 4.75%-5.00%； 9 月 24 日，国务院新闻办公室举行新闻发布会，宣布近期将下调存款准备金率 0.5 个百分点、降低存量房贷利率和统一房贷最低首付比例等。9 月 26 日，中共 中央政治局召开会议，会议强调要促进房地产市场止跌回稳等。 2、2024H1 中海物业实现营收 68.4 亿元，同比+9.0%（2023 年同期财务数据经 追溯调整）；毛利 11.5 亿元，同比+14.2%；实现归母净利润 7.4 亿元，同比 +16.0%；宣派中期股息每股 0.085 港币，中期派息率 35%，同比提升 10pct。 3、9 月 19 日至 9 月 27 日，中海物业累计上涨约 31%，涨幅明显。 点评：物管项目资源丰富，盈利能力企稳回升，提高中期分红比例回馈股东。 1）基础物管稳健增长，增值服务结构调整。2024H1 公司物业管理/社区增值/ 非业 ...

Financial Performance - The company's revenue for the six months ended June 30, 2024, was RMB 6,838.4 million, an increase of 9.0% compared to RMB 6,274.8 million in the same period last year[8]. - Operating profit for the period was RMB 995.4 million, up 15.4% from RMB 862.8 million in the previous year[8]. - Profit attributable to ordinary shareholders increased by 16.0% to RMB 737.5 million, compared to RMB 636.0 million in the previous year[8]. - Basic and diluted earnings per share were RMB 22.45 cents (approximately HKD 24.51 cents), compared to RMB 19.35 cents (approximately HKD 22.09 cents) in the previous year[8]. - The gross profit margin improved to 16.8% for the period, up from 16.0% in the previous year, with gross profit increasing by 14.2% to RMB 1,148.3 million[34]. - The total profit before tax for the period was RMB 996,522,000, after accounting for net company expenses of RMB 24,500,000[99]. - The company reported a net profit of RMB 737,524,000 for the six months ended June 30, 2024, compared to RMB 635,961,000 for the same period in 2023, representing an increase of approximately 16%[80]. - Total comprehensive income for the period was RMB 742,755,000, up from RMB 643,122,000 in the previous year, indicating a growth of about 15.5%[80]. Dividends and Shareholder Returns - The board declared an interim dividend of HKD 8.5 cents per share, an increase of 54.5% from HKD 5.5 cents in the previous year[8]. - The company paid dividends of RMB 256,680,000 during the period, compared to RMB 240,427,000 in the previous year, indicating a slight increase in shareholder returns[80]. - The interim dividend declared is HKD 0.085 per share, an increase from HKD 0.055 per share for the same period last year[159]. Operational Highlights - The company operates in 168 cities, covering Hong Kong and Macau, with approximately 40,178 employees and managing 2,118 properties, totaling nearly 422.7 million square meters of service area[16]. - The total managed area increased by 21.2 million square meters or 5.3% to 422.7 million square meters as of June 30, 2024, compared to 401.5 million square meters at the end of 2023[26]. - New orders during the six months ended June 30, 2024, totaled 21.2 million square meters with a contract value of RMB 1,635.4 million, of which 46.7% came from independent third parties[27]. - The company has secured contracts for various projects, including hospitals, schools, and government properties, maintaining its position as the largest property management service provider in Hong Kong with a market share ranking first[18]. Strategic Initiatives - The company aims to enhance its service quality and focus on high-quality development amidst a challenging global environment[11]. - The company plans to integrate various management styles into a unified service capability, positioning itself as an explorer of urban operation services[12]. - The company will actively integrate internal and external resources to promote the development of the entire industry chain[12]. - The company is committed to improving old community buildings and facilities, enhancing public service consumption for residents[12]. - The company aims to modernize property management through "technology innovation and cross-industry collaboration" to enhance service quality and customer satisfaction[26]. Technology and Innovation - The company has introduced smart cleaning robots and patrol robots in its services, integrating technology into property management[18]. - The company has established high-quality benchmark projects across 41 cities, with 53 projects evaluated, promoting sustainable development and innovation[19]. Market Position and Recognition - The company has been recognized as the top enterprise in multiple categories, including "2024 Property Management Listed Company High-Quality Development Leading Enterprise TOP1" and "2024 China Property Service Satisfaction Leading Enterprise NO.1"[21]. - The company has developed a unique business logic of "one branch with multiple branches, multi-industry collaboration," enhancing the value of managed properties[15]. - The company has been included in the MSCI Global Small Cap Index and continues to be recognized in various stock connect programs, affirming its market value[21]. Financial Position - As of June 30, 2024, net current assets were RMB 4,006.7 million, up from RMB 3,565.6 million at the end of 2023[62]. - Cash and bank balances decreased by 2.4% to RMB 5,005.3 million, with RMB accounting for 87.7% of the total[62]. - The company’s total equity increased to RMB 4,596,217,000 as of June 30, 2024, compared to RMB 3,582,619,000 at the end of June 2023, marking an increase of about 28.3%[80]. - The company’s total assets increased to RMB 4,656,451,000 as of June 30, 2024, compared to RMB 3,633,907,000 at the end of June 2023, indicating a growth of about 28.1%[80]. Cost Management - The company is committed to strict cost control, resulting in direct operating costs of RMB 5,690.1 million, an increase from RMB 5,269.5 million in the previous year[34]. - The total employee cost for the six months was approximately RMB 2,245.2 million, down from RMB 2,653.5 million in the same period last year[70]. - The company’s total expenses, including employee benefits and subcontracting costs, amounted to RMB 4,803,163,000, compared to RMB 4,285,519,000 in the previous year, reflecting an increase of about 12.1%[109]. Compliance and Governance - The company has adhered to the corporate governance principles as outlined in the Hong Kong Stock Exchange's listing rules during the reporting period[143]. - The company has confirmed compliance with the standard code of conduct for securities trading by all directors during the six months ended June 30, 2024[146].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjusted to HKD 6.30, indicating a potential upside of 32.1% from the current price of HKD 4.77 [1][2][3]. Core Insights - The report highlights a slowdown in growth for the first half of 2024, with revenue expected to increase by 9.0% year-on-year to approximately RMB 6.838 billion. The overall revenue growth for the year is projected to slow to around 10% due to market adjustments [2]. - The gross profit margin for the first half of 2024 improved by 0.8 percentage points to 16.8%, outperforming the general decline seen in peers [2]. - The company achieved a balance between scale expansion and profit, maintaining a target of 1:1 for internal and external growth in property management [2]. - The report anticipates that the company will continue to achieve double-digit growth in revenue and profit over the next two to three years, supported by strong external expansion capabilities and stable delivery from state-owned enterprises [2]. Financial Summary - Revenue projections for the company are as follows: - 2024E: RMB 14.337 billion (growth of 9.9%) - 2025E: RMB 16.514 billion (growth of 15.2%) - 2026E: RMB 18.930 billion (growth of 14.6%) [3][7]. - Core profit estimates are projected to be: - 2024E: RMB 1.544 billion - 2025E: RMB 1.785 billion - 2026E: RMB 2.058 billion [3][7]. - The report notes a decrease in net profit forecasts for 2024 and 2025 by approximately 17.5% and 26.1%, respectively, due to the downward adjustment in revenue expectations [2][3]. Market Performance - The company's stock has seen a year-to-date decline of 18.60%, with a 52-week high of HKD 9.58 and a low of HKD 4.05 [5][6]. - The average daily trading volume is reported at 5.61 million shares, with a market capitalization of approximately HKD 15.664 billion [5].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative increase of over 15% in stock price compared to the benchmark index within the next 6 to 12 months [5]. Core Insights - The company reported a 9.0% year-on-year increase in main business revenue for the first half of 2024, reaching 6.838 billion HKD, with a net profit of 738 million HKD, up 16.0% year-on-year [1][2]. - The company's comprehensive gross profit margin improved from 16.0% in 2023 to 16.8% in 2024, attributed to strict cost control measures [1][2]. - The company added 2.12 million square meters of managed area in the first half of 2024, with a total managed area increasing to 42.3 million square meters [1][2]. Financial Performance Summary - **Revenue**: - 2022A: 11,334.7 million HKD - 2023A: 13,220.9 million HKD - 2024E: 15,008.9 million HKD - 2025E: 16,960.1 million HKD - 2026E: 18,825.7 million HKD - Year-on-year growth rates: 2023A: 16.6%, 2024E: 13.5%, 2025E: 13.0%, 2026E: 11.0% [1][4]. - **Net Profit**: - 2022A: 1,137.3 million HKD - 2023A: 1,342.5 million HKD - 2024E: 1,579.0 million HKD - 2025E: 1,835.2 million HKD - 2026E: 2,115.7 million HKD - Year-on-year growth rates: 2023A: 18.0%, 2024E: 17.6%, 2025E: 16.2%, 2026E: 15.3% [1][4]. - **Earnings Per Share (EPS)**: - 2022A: 0.35 HKD - 2023A: 0.41 HKD - 2024E: 0.48 HKD - 2025E: 0.56 HKD - 2026E: 0.64 HKD [1][4]. - **Return on Equity (ROE)**: - 2023A: 36.5% - 2024E: 32.2% - 2025E: 27.7% - 2026E: 24.6% [1][4]. Business Development - The company has seen a shift in its service structure, with an increase in the proportion of third-party and non-residential projects, enhancing its resilience in a challenging market [1][2]. - The non-residential value-added services revenue decreased to 9.11 billion HKD in the first half of 2024, accounting for 13.3% of total revenue, primarily due to adjustments in service offerings [1][2].

Investment Rating - The investment rating for the company is "Outperform the Market" [4][16]. Core Viewpoints - The company has shown continuous improvement in profitability and steady expansion in scale, with a 9.0% year-on-year increase in overall revenue to RMB 6.838 billion in the first half of 2024 [6][11]. - The property management service revenue remains dominant, accounting for 75.5% of total revenue, while value-added service revenue has declined by 4.8% [11][14]. - The company maintains a strong focus on independent third-party projects, with 46.7% of new projects coming from this segment [9][10]. Financial Performance Summary - In the first half of 2024, the overall gross profit increased by 14.2% to RMB 1.148 billion, resulting in a gross margin of 16.8%, up 0.8 percentage points from the same period in 2023 [6][8]. - The net profit attributable to shareholders rose by 16% to RMB 738 million, with basic and diluted earnings per share at RMB 0.2245, also reflecting a 16% increase [6][8]. - The average return on equity for shareholders was 33.8%, down 3.8 percentage points compared to the same period in 2023 [6][8]. Revenue Breakdown - As of the end of the first half of 2024, the company managed 403 market projects and 2,118 property projects, covering a service area of approximately 422.7 million square meters [11][14]. - Revenue from property management services reached RMB 5.17 billion, a 14.2% increase year-on-year, while value-added services generated RMB 1.6 billion, a decline of 4.8% [11][14]. - The revenue from parking space transactions was RMB 70 million, reflecting a slight increase of 1.1% [11][14]. Dividend Policy - The company declared an interim dividend of RMB 0.085 per share for the first half of 2024, considering its dividend policy and mid-term performance [16][4]. Future Earnings Projections - The company is expected to achieve an EPS of RMB 0.47 for 2024, with a projected valuation range of HKD 6.17 to 7.71 per share based on a dynamic PE of 12-15 times [4][16].